Russia's business seizures cast doubt on Western firms' return

When three officials walked into the Moscow headquarters of Glavprodukt last October, the largest maker of canned food in Russia, they wasted no time announcing that the Russian state would now be running the company, according to the company's founder and two people with knowledge of the matter (via Reuters).

Employees, caught off guard, soon realised that their corporate structure had changed overnight. This was just one in a growing list of foreign firms placed under temporary management by Russia's government, a euphemism that has proven anything but temporary.

From Danish brewers to Finnish utilities, Moscow has been systematically seizing assets, redistributing them to loyalists, and showing no signs of reversing course. Profitable businesses have been handed over to politically connected insiders, often with little regard for their long-term viability.

While some speculate that a potential shift in United States foreign policy could restore Western business ties, Russia's ongoing nationalisations suggest otherwise. Even those who have managed to sell their holdings have often been forced to accept prices far below market value, as buyers are carefully selected by the Kremlin.

With new laws in the works to seize additional Western assets and expand state control, the Kremlin seems intent on keeping its spoils and solidifying its grip on the economy. For now, it remains to be seen whether any foreign investor will dare return to such an unpredictable and increasingly hostile market.