It is claimed the Russian state has taken control of leading car manufacturer Avtovaz – producer of Lada.
According to the newspaper Kommersant, state agency Rosoboronexport, which oversees most of Russia’s arms exports, bought two subsidiaries together owning 61.8% of Avtovaz, on 27 October.
An announcement this week of a list of new candidates for the renewed management board of Avtovaz had already pointed to a strengthening of state control, following the resignation of managing director Vladimir Kadanikov in October.
Poviding they are approved by shareholders, the representatives of two state structures, Rosoboronexport and the bank Vneshtorgbank, are expected to fill a majority of the 12 seats on the board.
Avtovaz – along with Boris Alyoshin, a top official at the industry ministry – has denied that Rosoboronexport had taken control of Avtovaz.
But Konstantin Titov, the governor of the region of Samara in the south of the country where the company is based, was quoted by the Interfax news agency as saying yesterday Rosoboronexport already control Avtovaz ‘de facto but not legally’.
Information on the Avtovaz website indicates 2.05% of the group is in the hands of the state, 80.11% belongs to a group of companies and 17.84% to individual shareholders.
Avtovaz shares have fallen 6% so far this week and investors are concerned about the ability of the Russian state to turn around the business, which is in difficulty in the face of foreign competition.