Russia’s richest businessman tells Putin: Don’t take us back to 1917

Russia’s richest businessman has warned the Kremlin against confiscating assets of companies that have fled in the wake of the invasion of Ukraine, saying such a step would set the country back more than 100 years.

Vladimir Potanin, president of metals giant Norilsk Nickel (NILSY) and its biggest shareholder, said that Russia risked returning to the tumultuous days of the 1917 revolution if it slammed the door on Western companies and investors. He urged the Russian government to proceed with extreme caution regarding the seizure of assets.

“Firstly, it would take us back a hundred years, to 1917, and the consequences of such a step — global distrust of Russia on the part of investors — we would experience for many decades,” he said in a message posted on Norilsk Nickel’s Telegram account on Thursday.

“Secondly, the decision of many companies to suspend operations in Russia is, I would say, somewhat emotional in nature and may have been taken as a result of unprecedented pressure on them from public opinion abroad. So most likely they will come back. And personally, I would keep such an opportunity for them,” he added.

Potanin is Russia’s wealthiest billionaire and still worth about $22.5 billion, according to Bloomberg, despite losing about a quarter of his fortune this year as shares in Norilsk Nickel crashed. The company’s shares lost more than 90% in London trading before they were suspended this month, despite soaring prices for its commodities.

A Tesla electric vehicle being charged in Hayes, west London. Picture date: Tuesday March 8, 2022. (Photo by John Walton/PA Images via Getty Images)

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Norilsk Nickel is the world’s largest producer of palladium and high-grade nickel, as well as a major producer of platinum and copper. The company and its primary products have escaped punishing sanctions imposed by Western countries that have slammed the Russian economy.

Dozens of American, European and Japanese companies have abandoned joint ventures, factories, stores, offices and other assets in the past two weeks in response to Russia’s invasion of Ukraine and the sanctions. They were joined by Goldman Sachs and JPMorgan on Thursday, the first major Western banks to announce they will quit Russia completely since the crisis erupted in February.

Russian President Vladimir Putin said Thursday that he backed a plan to introduce “external management” of foreign companies leaving Russia.

“We need to act decisively with those [companies] who are going to close their production,” Putin said according to a video posted by the Kremlin and aired on state media. “It is necessary, then … to introduce external management and then transfer these enterprises to those who want to work,” he added.

Russia’s consumer rights organization has drawn up a list of companies that have decided to leave and could be nationalized, according to a report in Russian newspaper Izvestiya later cited by state news agency TASS.

The document that was reportedly sent to the Russian government and the Prosecutor General’s Office, includes 59 companies, including Volkswagen, Apple, IKEA, Microsoft, IBM, Shell, McDonald’s, Porsche, Toyota, H&M, and can be updated with more brands, Izvestiya said.

Potanin said it wasn’t particularly expedient to talk about nationalizing Western assets, but the Kremlin’s proposal could allow “owners to keep property, and companies to avoid collapse, continue to produce products and pay money to employees.”

“I understand that in light of the economic restrictions directed against Russia, there may be an understandable desire to act symmetrically,” he wrote. “But on the example of Western countries, we see that the economies of these countries suffer from the imposition of sanctions against Russia. We must be wiser and avoid a scenario where retaliatory sanctions hit ourselves.”

He also called for Russia to ease restrictions on foreign currency so that interest could be paid on foreign bonds and loans. Otherwise, there was a risk the country could default on its entire external debt, which he estimated at about $480 billion.