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Russian authorities have arrested senior executives at Carlsberg’s captive subsidiary Baltika Breweries on criminal charges of fraud as the battle over the rights to the Danish brewer’s brand licenses escalates.
The interior ministry raided Baltika’s St Petersburg office and arrested two executives for allegedly stealing Baltika’s intellectual property, weeks after the Danish brewer tried to block Baltika from selling its international brands such as Tuborg and Kronenbourg.
The attacks come as Baltika Breweries was placed under “provisional administration” by Russian President Vladimir Putin, leaving Carlsberg with title to the shares but no operational control of its subsidiary.
Carlsberg said it was “heartbroken by the news of the arrest of two Baltika employees yesterday in Russia along with charges against several others”.
“It is appalling that the Russian state’s efforts to justify its illegal takeover of our business in Russia have now evolved into targeting innocent employees,” a spokesman said. Baltika declined to comment.
The two managers who were arrested are former chief executive Denis Sherstennikov, who retired from the Russian subsidiary after its seizure by the Kremlin, and Anton Rogachevsky, the company’s legal vice president, according to state news agency TASS and the press service of the Regional Court. from Vyborg.
A third executive, Baltika’s former deputy legal director Elena Kuzmina, who left Russia and joined Carlsberg as an employee, is also under investigation, according to the reports.
The executives are accused of securing the rights for Carlsberg to export Baltika’s Russian brands to Kazakhstan, Kyrgyzstan, Belarus and other countries in the region, depriving Baltika of access to its neighboring markets.
Fontanka, the first Russian news outlet to report the arrests, said Russian authorities had already made multiple raids against Baltika in connection with the case, and demanded 295.6 million rubles ($3.3 million) in damages for the alleged violations. on intellectual property.
“The allegations reported in Russian media are false,” the Carlsberg spokesman said. “Until the introduction of external management by the Russian state, Baltika acted in accordance with the law and the policies guiding all companies in the Carlsberg Group.”
“As Carlsberg, we will of course do what we can to help the employees in these difficult circumstances,” they added.
The arrests follow moves by Carlsberg to prevent Baltika from selling its international brands in Russia and neighboring countries.
After writing down the entire value of its Russian business last month, Carlsberg terminated the licensing agreements that allow Baltika to sell brands such as Kronenbourg and Tuborg.
The decision was a blow to Baltika’s future profitability – Carlsberg’s international brands make up around 40 percent of the subsidiary’s value.
Baltika tried to stop Carlsberg from making changes to the trademarks and asked an arbitration court in St. Petersburg to bar the Danish brewer from initiating legal proceedings against the company in a Danish court, according to court filings.
“Those are our brands,” Carlsberg chief Jacob Aarup-Andersen said in an interview with the Financial Times before the arrests. “We have exercised our rights to call in our licenses and whatever reaction comes from that from Russia, we will see.” Aarup-Andersen accused Moscow of “stealing” the group’s Russian assets.
News of the arrests was first reported in the Russian press on Wednesday evening, shortly after Putin held a meeting with some of Russia’s top businessmen and economic officials about the country’s investment climate.
On Thursday, Putin’s spokesman Dmitry Peskov said Putin discussed “possible steps to improve the investment attractiveness of our economy.” Peskov did not mention anything about the arrests.
Additional reporting by Max Seddon in London