Copyright © 2024

The work of Euromaidan Press is supported by the International Renaissance Foundation

When referencing our materials, please include an active hyperlink to the Euromaidan Press material and a maximum 500-character extract of the story. To reprint anything longer, written permission must be acquired from [email protected].

Privacy and Cookie Policies.

2,370 UK-owned Russian companies profit from foreign money

2,370 UK-owned Russian companies profit from foreign money
Article by: YouControl

While many large UK companies have withdrawn from Russia under consumer pressure, a network of 2,370 Russian companies with nominal British owners continues to work unabated. Their UK nominal owners often act as a front for foreign money transfers to their Russian beneficiaries and allow international capital to keep feeding Russia’s war machine. Meanwhile, several large real UK companies keep operating in Russia, namely HSBC Holdings, Unilever, GlaxoSmithKline, AstraZeneca, Linde, Legal & General Group, and LyondellBasell Industries.

British boycott of Russian business

In response to the Russian invasion of Ukraine in February 2022, pressure mounted on Western companies to withdraw from the market in order to stop funding the Russian budget that funds the invading army. Companies withdrew, others not so much. An Exodus Level Index created by YouControl allows measuring various countries’ levels of business withdrawal from Russia. Developed with recommendations from Yale University researchers, who monitor the business status of over 1,200 western companies in Russia, it considers five categories of corporate reaction to the Russo-Ukrainian war.

russia business boycott geography
Geography of the Russian business boycott/ Source: YouControl

Britain is among the top three countries with the highest withdrawal rate, based on Yale’s list. The average withdrawal rate of the 96 British companies in the list, according to YouControl’s ELI index, is 4.3, with 5 being the highest.

By sector, companies that withdrew the most, suspending or stopping business with Russia are:

  • Business Services
  • Finance
  • Retail trade
  • Food manufacturing
  • Heavy industry
  • Light industry
  • Engineering
  • Construction

However, some companies from the following sectors continue to operate:

  • Healthcare
  • Chemical industry
  • Finance.

State of the UK’s largest companies’ business boycott of Russia

Many of the ones that are still operating are among the world’s largest companies. Particularly, seven companies from the American Forbes Global 2000, which compiles a list of the world’s largest companies, have their headquarters in the UK and still cooperate with Russia.

These UK companies continue operations without making new investments:

  • HSBC Holdings (Finance)
  • Unilever (Chemical industry, Food manufacturing)
  • GlaxoSmithKline (Healthcare)
  • AstraZeneca (Healthcare)

These have reduced activity to some degree:

  • Linde (Logistics)
  • Legal & General Group (Finance)
  • LyondellBasell Industries (Chemical industry)

But many other UK companies from the Forbes Global 200 list have shown more responsibility by suspending operations in Russia:

  • Diageo
  • M&G
  • CNH Industrial
  • Rolls-Royce Holdings
  • JD Sports Fashion

And many well-known brands have entirely ceased business or withdrawn from the Russian market:

  • Vodafone
  • Reckitt Benckiser Group
  • BP
  • Imperial Brands
  • Willis Towers Watson
  • London Stock Exchange
  • Compass Group, WPP
  • J Sainsbury
  • Mondi
  • Centrica
  • Wm Morrison Supermarkets.

UK capital in the Russian market

According to the Russian Unified State Register of Legal Entities, 2,370 business companies whose founders are British residents operate in Russia. However, YouControl has analyzed it and found that most of them have only nominal British owners while being ultimately controlled by Russian or non-British nationals.

The nominal British ownership allows the Russian beneficiaries to reap the benefits of British law and profit from access to international financial flows and complex networks of corporate rights.

Most companies with nominal British ownership are concentrated in Russia’s capital, Moscow (41%). More than 100 British-owned companies are registered in the Novosibirsk region, St. Petersburg, and Moscow regions, where most economic growth is concentrated.

british companies registration geography
Geography of registration of companies with British owners in Russia/ Source: YouControl

How do British companies make money in Russia?

As the following graph demonstrates, companies with nominal British ownership are most active in Russia’s construction industry (15.8% of all UK-owned enterprises in Russia), followed by Wholesale trade (11.4%) and Real estate transactions (7%). Transport and logistics (6%), information technology (4%), the food industry (4.1%), and finance (3.5%) are also prominent industries. Retail trade, Business services, and Management consulting complete the Top 10.

sectors russian economy most interest british shareholders
British shareholders numbers by sectors of the Russian economy/ Source: YouControl

Notably, industrial sectors of the economy, such as Metallurgy, Mechanical engineering, the Chemical industry, or Oil and gas, have a smaller proportion of companies with British shareholders. This may be due to historically high barriers to non-residents’ access to strategic and also highly profitable industries controlled by the pro-Kremlin oligarchic elite. The ultimate beneficiaries of industrial enterprises with a British façade are often Russians who use British law to structure their business operations within international financial-industrial groups.

The Top 20 largest Russian companies with nominal UK ownership

Upon further analyzing the companies, YouControl found that most of the UK companies in Russia are British only de jure. The UK residency of their owners is just being used as a cover for the profits of their actual owners.

Their nominal owners, UK residents, allow the Russian companies to access international financial flows and complex networks of corporate rights, reaping profits for their actual beneficiaries — both Russian and various non-British citizens.

Three nominally British companies from the Top 20 are under Russian control: Investment Company DENMAR-FINANCE LLC, LADOGA Group LLC, and BERKSHIRE LLC.

top 20 companies under british ownership
Top 20 Russian companies under the nominal control of British shareholders/ Source: YouControl

Further analyzing the companies, YouControl delved into the shareholders using its RuAssets international platform that allows establishing Russian business connections to any company and found two major categories.

1. Many British shareholding corporations exhibit characteristics of so-called “shell companies”

Some of the beneficiaries are companies. For instance, three British companies (under Russian control, according to YouControl analysis of the board of directors and historical data) are nominal owners of Russian assets in the Top 20. Other are companies from South Africa, the US, Ireland, Austria, Italy, and Switzerland.

Other beneficiaries are individuals with citizenship in Latvia, Sweden, or the United Kingdom.

2. Many nominal British shareholders are startups with founders of Russian origin who have acquired foreign citizenship. The illustrative case is Wheely, a London-based car rental company, which allows users to reserve rides with a chauffeur in luxury vehicles. Its founder is Anton Chirkunov, the son of the former governor of Russia’s Perm Oblast, who holds a Swiss passport and resides in the UK. Capital for Wheely was raised by billionaires of Russian origin, including the founder of Russian social media giants Vkontakte and Telegram, Pavel Durov, and other investors. Such investments by Russian billionaires are typical for these startups.

For this analysis, YouControl analyzed the state of Russian-British interdependence in the equity market based on the number of subsidiaries of companies, the most common registration places, and the scope of their activities using its RuAssets international platform, developed at the beginning of Russia’s full-scale invasion of Ukraine, which is free to use for media professionals.

YouControl is an 8-year-old Ukrainian IT company that has aggregated information on every Ukrainian company, entrepreneur, and most individuals based on over 180 official sources. It monitors changes in public registrations, displays connections between affiliated businesses and individuals, and analyzes European, British, American, and Russian corporations, corporate members, executives, and business relationships.

Read more:

You could close this page. Or you could join our community and help us produce more materials like this.  We keep our reporting open and accessible to everyone because we believe in the power of free information. This is why our small, cost-effective team depends on the support of readers like you to bring deliver timely news, quality analysis, and on-the-ground reports about Russia's war against Ukraine and Ukraine's struggle to build a democratic society. A little bit goes a long way: for as little as the cost of one cup of coffee a month, you can help build bridges between Ukraine and the rest of the world, plus become a co-creator and vote for topics we should cover next. Become a patron or see other ways to support. Become a Patron!

To suggest a correction or clarification, write to us here

You can also highlight the text and press Ctrl + Enter

Please leave your suggestions or corrections here

    Euromaidan Press

    We are an independent media outlet that relies solely on advertising revenue to sustain itself. We do not endorse or promote any products or services for financial gain. Therefore, we kindly ask for your support by disabling your ad blocker. Your assistance helps us continue providing quality content. Thank you!

    Related Posts