A disturbing story has emerged this week concerning attempts by an unknown party to seize control of Holcim Russia. The situation marks a dangerous new phase for multinational companies operating in Russia. This includes a number of building materials producers and their suppliers.

The public side of events started on 26 July 2022 when Holcim Russia announced on its website that a legal case concerning an unpaid loan against it had been initiated at a court in Chechnya and that someone was also trying to change ownership documents with the Federal Tax Service. This was then followed by an interview by Forbes Russia with the new alleged owner of the construction materials company explaining how he had made the so-called acquisition. Holcim Russia immediately hit back hard with multiple and well researched reasons why this couldn’t be so. These included the supposed private investor’s apparent lack of a business past, a long criminal history, psychiatric records, social media accounts of an individual of seemingly modest means and so on. Kommersant FM has since reported that the court in Chechnya took the side of the asset raider but that both the Federal Security Service (FSB) and the Ministry of Industry and Trade are now investigating the case.

Taking loans from a mystery businessman with no apparent past does not look credible for a multinational like Holcim and its subsidiaries. This particular method was also flagged up by one of the legal sources quoted by Kommersant FM as a recognisable corporate scam in Russia dating back to the 2000s. What is more certain is that Holcim reported that it had a 100% interest in Holcim Russia in its annual report for 2021. It then said it was going to leave the Russian market in late March 2022 following the start of the war in Ukraine a month earlier. By May 2022 it said that it had attracted the interest of 30 possible buyers. Only this week Holcim’s chief executive officer Jan Jenisch confirmed in the company’s second quarter conference call that divestment discussions were 'active' and ongoing with a 'solution' expected in the coming months. The timing of Holcim Russia’s sudden difficulties is therefore noteworthy given that a potential buyer has not yet been publicly announced.

Whoever has tried their luck at taking over Holcim Russia has done so at a time when anti-Western sentiment is high in Russia. For example, the government attempted to pass a new law seizing the assets of Western companies trying to leave the country in July 2022. Any intervention by the authorities is likely to take some of this into account and they may be wary of helping an organisation with perceived European links. Naturally, the nationalist card was played up in the interview with Forbes Russia. For its part, Holcim Russia has commented that the ongoing 'illegal action' might lead to production delays for building materials supporting key housing and infrastructure projects. Whatever is going on it must be a tense time for Holcim Russia and its 1500 employees. We’ll leave the last word to Holcim Russia’s general manager Maxim Goncharov who has described the situation as the “theatre of the absurd.” He is not wrong.