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A Russian metals tycoon's assets in a company that produces a key component in making steel have reportedly been nationalized days after President Vladimir Putin criticized his management of his company.

Yury Antipov, 69, the owner of Russia’s largest ferroalloy company, was also questioned by investigators in Chelyabinsk, the Urals industrial city where his company is based, and released on February 26, according to local media.

Earlier in the day, the government seized his shares in Kompaniya Etalon, a holding company for three metals plants that reportedly produce as much as 90 percent of Russia’s ferroalloy, a resource critical for steelmaking.

Russia’s Prosecutor-General Office filed a lawsuit on February 5 to seize Etalon, claiming the underlying Soviet-era metals assets were illegally privatized in the 1990s. It also said the strategic company was partially owned by entities in “unfriendly” countries.

While campaigning for a presidential vote next month, Putin criticized Antipov on February 16 without naming him during a visit to Chelyabinsk, whose working-class residents are typical of the president’s electoral base.

Putin told the regional governor that the Chelyabinsk Electrometallurgical Plant, the largest of Etalon’s five metals factories, had failed to reduce dangerous emissions as agreed in 2019 and the asset would be taken over even though the court had yet to hear the case on privatization.

“I think that all the property should be transferred to state ownership and part of the plant -- [where there is ecologically] harmful production -- should be moved outside the city limits,” Putin told Governor Aleksei Teksler.

In a closed hearing, a Chelyabinsk court approved the transfer of Etalon’s assets to the state, a move potentially worth hundreds of millions of dollars.

Antipov ranked 170 on Forbes 2021 list of richest Russians with a net worth of $700 million.

The nationalization of a domestic company owned by a Russian citizen is the latest in a series of about two dozen by the state since Russia invaded Ukraine in 2022.

Prosecutors have based their cases on illegal privatization, foreign ownership, criminal activity, or a combination of the three. A rare-metals producer whose owner had been critical of the war effort was among the other assets seized. l

The seizures contradict Putin’s repeated promises in the nearly quarter century he has been in power that he would not review the controversial 1990s privatizations. In return, businessmen were expected to be loyal to the Kremlin and stay out of politics, experts say.

That unofficial social contract had more or less functioned up until the war. Now businessmen are also expected to contribute to the war effort and support the national economy amid sweeping Western sanctions, experts say.

The current trend of state seizures has spooked Russian entrepreneurs and raised questions about whether that social contract is still valid.

U.S. Ties

Antipov began his business career in the 1990s selling nails, fertilizer, dried meats, and other goods. In 1996 he and his business partner plowed their profits into the purchase of the Chelyabinsk Electrometallurgical Plant and subsequently purchased four more metals plants in the ensuing years.

The plants sold some of their output in the United States, where the firm had a trading company.

Antipov received full control of the metals holding in 2020 when he split with his business partner. That year he put 25 percent of the company each in the names of his wife and two eldest sons, Sergei and Aleksei Antipov, according to Russian business registration records.

In 2022, the metal assets were transferred to the Etalon holding company, whose ownership was hidden. Ferroalloy prices surged in 2022 as the war triggered a spike in commodity prices.

A hit piece published by The Moscow Post in December -- six weeks before prosecutors launched the privatization case -- claimed Antipov paid himself a dividend of more than $300 million from 2021-2023 using a structure that avoids capital gains taxes. RFE/RL could not confirm that claim. The Moscow Post is a Russian-language online tabloid that regularly publishes compromising and scandalous stories.

According to public records, Antipov’s two sons own homes in the United States and may be U.S. citizens. Sergei Antipov founded the trading company around the year 2000 in the U.S. state of Indiana. If he and his brother together still own 50 percent of the company, prosecutors could potentially have grounds for seizure.

Russia has changed some laws regulating the purchase of large stakes in strategic assets since its invasion of Ukraine.

One is a 2008 law that requires foreign entities to receive state permission to buy large stakes in strategic assets. An exception had been made for foreign entities controlled by Russian citizens.

Under the change, a Russian citizen with dual citizenship or a residence permit in another country may be considered a “foreign” owner and must receive permission to own an asset.

Nationalization is among the punishments for failure to do so. Thus, if Antipov’s two sons are U.S. citizens or if they have U.S. residency permits, their combined 50 percent stake in the company could be seized.

This already happened to a Russian businessman from St. Petersburg. His business was determined to be strategic and seized after he received foreign residency.

This content originally appeared on News - Radio Free Europe / Radio Liberty and was authored by News - Radio Free Europe / Radio Liberty.


[1] US ferro-alloy markets peak in wake of Russia's war on Ukraine - Fastmarkets ➤