Russian business & economic reforms
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Vladimir Yevtushenkov enjoys a new life covenant. A few years ago a war against the oil company in Rosneft was in danger of dissolving its Sistema organization, a 72-year-old Russian general now leading the country’s stock market.
Sistema, whose main asset is Russia’s largest MTS group, wants to compile a list of companies from Agriculture Steppe and Medsi Hospital to Binnopharm Group medical company, one of Russia’s Sputnik V Covid-19 vaccine manufacturers, and MTS bank.
The group’s recent success with some of its first public offerings seems to confirm Yevtushenkov’s decision to reaffirm his commitment to professionalism after the government seizes control of its Bashneft oil company in 2014.
Ozon, Sistema’s ecommerce page, has doubled since it came out publicly last year, with the cost of making Segezha’s paperwork in their most recent quarter increased by 45% a year following its IPO.
In the meantime, MTS, Sistema’s gemstone, is entering a competition to create a “natural” technology that gives customers everything from economics to entertainment.
“Initially, we lived in. . . self-reliance goals and with our money. And we were not a money-making company, ”Yevtushenkov told The Financial Times. “Now, people understand that we don’t lose our money and we don’t lose other people.”
Although most of Sistema’s technical finances are just a few years away from making a profit, Yevtushenko said they were well managed with what they already had. “We are not worried. If we can improve something with Ozon, then another business will pass us by. Our strength is that we are different. ”
Today, Sistema is trading in joint ventures with state-owned banks and generating additional operating costs in anticipation of future IPOs – which was made possible by the recent increase in Russian business vendors.
“The market is very volatile, bank prices are close to zero, inflation is very difficult,” Yevtushenkov said. “That’s why people look for security by buying and selling money, because if you think about it, it gives them more money than keeping their money in the bank. It’s like medicine. You get confused and you can’t stop.”
Yevtushenkov, a former Soviet machine maker, began at the beginning of the era of the Russian capitalist selling oil and computers with his colleagues from the Moscow mayor’s office. For many years he was close to the powerful former mayor of Moscow Yuri Luzhkov, although the two men fell in 2004.
Unlike many oligarchs, Yevtushenkov has won a reputation for being a volunteer in the public and private markets, a challenge in a country where corporations are often traditional and the participants are self-sufficient.
Sistema is Russia’s largest publicly traded company. Last year he made baby seller Detsky Mir the first Russian company to own 100% through its free approach to stocks, although the stockbroker has since built a 30% stake.
Some oligarchs see Yevtushenkov as the belwether of a Russian businessman, who has been experiencing difficulties over the years of economic growth and declining purchasing power.
Call for change was not heard as the Kremlin boosted economic recovery and tried to reduce corporate dependence on western wages following US and EU sanctions on the 2014 Crimean invasion.
Yevtushenkov spent several months in prison that year on charges of illegally allowing Bashneft, which was later dropped. After a long battle with the intervention of President Vladimir Putin, Sistema agreed in 2017 to pay Rosneft, who bought Bashneft from the government last year, $ 1.7bn in damages for theft.
Particularly because of the Bashneft deal the corporation owes approximately Rbs210bn ($ 2.9bn) debt, a burden that Yevtushenkov says has prevented the System from resuming its business.
The issue of restructuring of corporations has become particularly alarming in Russia this year after Putin criticized companies for making huge sums of money as ordinary people suffer from the epidemic. Then, as prices rise on expensive foods such as seeds – which Steppe is one of Russia’s leading manufacturers – Prime Minister Mikhail Mishustin says an increase in “greed” for traders
Such comments encouraged Russian businesses. More than three-quarters of businesses fear prosecution for no reason, according to a survey conducted by the presidential security agency in May.
“We always do what the President has said without fail,” Yevtushenkov said. “We didn’t have any profit because the business was always looking for money.”
U.S. stockbroker Michael Calvey, whose money belongs to Baring Vostok and Ozon dealership along with Sistema, was sentenced to six years in prison last month for fraud. The case against Calvey was seen as an indication of how Russia’s economy has lagged behind the security services.
Yevtushenkov said legal problems were part of doing business in Russia. “I tell you the truth – I would have given up money. But I survived. I think Calvey is a tough guy. “She will survive and will continue to invest,” he said.
Yevtushenkov, who sees the business as a “mining site”, made peace and played according to state regulations.
“The government has the right to decide whether or not to do so. . . There can be unpleasant consequences for someone – they were there for us. But it is life, ”he said. “Business must work for the good of the government. When they are completely forgotten, an unpleasant experience begins. ”