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Russian authorities have filed a case against Andrei Melnichenko in an attempt to seize and nationalize a company in the billionaire oligarch’s metals and mining empire, claiming the five-year-old takeover was a corrupt deal.

The Russian government’s allegations come as the Kremlin has launched a campaign to woo wealthy Russians to bring their wealth and businesses home, intensifying pressure on tycoons such as Melnichenko. Melnichenko now primarily lives in the United Arab Emirates, where he has a $300 million superyacht berthed.

Since Russia’s full-scale invasion of Ukraine 18 months ago, the Kremlin has used carrots and sticks to try to force oligarchs to prove their loyalty to the motherland.

Some businessmen who were mildly critical of the invasion found their assets subject to legal disputes while loyalists were rewarded. For example, some businesses have the opportunity to purchase assets that the state has seized from foreign companies.

According to the lawsuit against Melnichenko, he describe Because the invasion of Ukraine was “tragic,” state prosecutors aimed to seize Sibeco, which operates several coal-fired power plants in western Siberia that generate electricity for the region. The lawsuit was filed this month in the city of Krasnoyarsk.

Melnichenko bought the company in 2018 from then-government minister Mikhail Abyzov. A few months later, in the spring of 2019, Abizov was arrested and charged with embezzlement and defrauding shareholders of Sibeco and another company ahead of the deal. The state took over his assets and Abyzov remains in a Russian prison.

In the current lawsuit, state prosecutors claim to have uncovered “corrupt collusion” between Melnichenko and Abyzov in the 2018 Sibeco sale, while continuing to investigate Abyzov himself.

A representative for Melnichenko acknowledged to the FT that the lawsuit had been received and said a team of lawyers were working on the case. However, he declined to comment on the allegations against his client until the lawsuit began. According to information on the Krasnoyarsk court website, the hearing is scheduled for early September.

Melnichenko, who was named Russia’s richest man by Forbes this year, has seen his net worth soar to more than $25 billion thanks to rising prices for coal and fertilizer, which are sold by two major companies he founded, EuroChem and Suek. Commodity.

The oligarch, who is no longer the owner and direct beneficiary of the two companies following Russian President Vladimir Putin’s sweeping invasion of Ukraine, has been hit with US and EU sanctions along with many other top Russian industrialists blow. The main beneficiary was his wife, who was subsequently sanctioned as well. Forbes’ estimate of Melnichenko’s wealth is based on the corporate structure before the Russian invasion began in February 2022.

Abyzov, a close ally of former President Dmitry Medvedev, faces four criminal charges, including defrauding a Siberian energy company of 4 billion rupees ($42.5 million) and transferring the proceeds overseas. He is being held in Lefortovo Prison in Moscow. The state has confiscated 3,250 crore rupees from the former official and sold some of his assets at auction, including apartments in the capital.

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