Russia nationalizes Yugoralzoloto, the country's third-largest gold company, strengthening its control during wartime.
In a notable development amid a series of acquisitions carried out by the Russian government since the outbreak of the war in Ukraine, a court in the Chelyabinsk region ruled on Friday to nationalize Yuzhuralzoloto, Russia's third-largest gold producer. This move underscores Moscow's intent to strengthen its control over strategic assets during wartime.
Prosecutor's Lawsuit and Allegations of Political Exploitation
On July 2, the Russian Prosecutor General's Office filed a lawsuit seeking to seize the Yuzhuralzoloto Group of Companies (YUGK) and 10 affiliated firms from billionaire and regional Duma member Konstantin Strukov, who previously served as the company's CEO before entering politics. The prosecution accused Strukov of abusing his political influence to unlawfully acquire the company, restructuring it into a public joint-stock company, and transferring ownership to close associates, including his daughter Alexandra Strukova, a Swiss citizen.
Swift Trial Behind Closed Doors
According to Interfax, the Sovetsky District Court ruled in favor of the prosecution and ordered the immediate confiscation of all company assets. The trial was held in complete secrecy and lasted no more than two days. The company stated it would decide whether to appeal once the full court decision is released.
Strukov: Billionaire and Influential Politician
Konstantin Strukov ranks as Russia's 78th richest individual, with an estimated net worth of $1.9 billion. He serves as deputy chairman of the Chelyabinsk regional legislative assembly and is a member of the ruling United Russia party. Despite Yuzhuralzoloto generating revenues of 25 billion rubles (approximately $320 million) in 2023 from producing 10.6 metric tons of gold, the company reported a net loss of 7.2 billion rubles (around $90 million).
Kremlin Expands Control Over Private Sector Assets
This ruling is part of a broad state-led campaign to seize private assets since Russia's invasion of Ukraine in February 2022. Estimates suggest the government has confiscated private assets valued at over $50 billion, roughly one-third of Russia's annual military expenditure.
Observers believe this move may herald a new wave of nationalizations in strategic sectors such as mining and energy, amid escalating geopolitical tensions and the growing role of the Russian state in managing the economy under the banner of a 'sovereign economy.'
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