World Economy

Russia Tax Inspectors Raid Business Offices

Russia Tax Inspectors Raid Business OfficesRussia Tax Inspectors Raid Business Offices

Raids by tax officers on Mikhail Prokhorov’s business interests may be a signal that the cash-strapped government is looking to acquire assets.

Mikhail Prokhorov must be wondering what on earth he did to draw the ire of Russian President Vladimir Putin. He’s a quiet billionaire who doesn’t seem to tread on anyone’s toes. It’s true he did run against the president in the 2012 presidential election, but it was generally considered to be a mutually agreed staged attempt to convince the world there was an opposition, and since then the 50-year-old businessman has barely muttered a political word, DW reported.

But, as Putin spent hours answering questions from across the country in his recent televised Q&A session, officers of the Federal Security Bureau and tax inspectors were conducting raids on several of Prokhorov’s businesses including the Moscow headquarters of his holding company, Onexim Group, his investment firm Renaissance Capital, the power generating company Quadra, and the International Financial Club bank.

The raids were apparently part of an investigation into another bank that IFC had bailed out last year and Onexim had a stake in, but the “Moscow Times” reported the FSB as saying that it had found tax law violations at “a number of commercial structures” although it didn’t say exactly which ones.

This tactic has a familiar ring to it—one which must have sent a shudder down Prokhorov’s spine as he recalled the fate of the oligarch, Mikhail Khodorkovsky, who spent 10 years in prison on tax fraud and embezzlement charges after falling foul of the Kremlin.

Rumors about what he could have done to bring this upon himself have run rife—but the one that seems to be congealing best is that the Kremlin wants his media holdings, RBC—which has TV, print and online interests.

According to its 2013 annual report, RBC had considerable debts, about $208 million, but it has influence, and, in a sea of otherwise bland and controlled media outlets, it is one of the most liberal, and that may have been its Achilles heel.

Its print version was the only daily newspaper to dedicate its whole front page to the Panama papers and the alleged involvement of people close to Putin’s inner circle in money laundering schemes. It was a point not lost on the vitriolic head of Russia Today who, in his own TV program, intimated that RBC was acting as a stooge for US interests.

“The Americans have helpers around the world, and Russia is no exception—people who are prepared to link Putin personally to offshore companies in whatever way they can.”

So there’s a reason, but is there a bigger fish to be had? It seems the government has multiple interests in acquiring a variety of businesses at the moment, including one of Moscow’s largest and privately owned airports, Domodedovo.