Putin brings Rolf, Russia’s largest car dealership owned by Cyprus-based firm, under state management

Against the backdrop of the Russia-Ukraine war and Western sanctions, President Vladimir Putin has taken control of Rolf, Russia's largest car dealership owned by a Cyprus-based firm, placing it under temporary state management.

The Kremlin insisted that the move is driven by commercial considerations, citing the need to comply with Russian legislation and address the challenging international economic situation.

Rolf, originally founded by Russian businessman Sergei Petrov, has been a prominent player in the automotive industry since the post-Soviet era.Petrov, who resides in Austria, faces accusations from Russian authorities of illegally moving money abroad.However, he has denied these allegations.

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This seizure follows Moscow's trend of temporarily assuming control of Western-owned assets in response to sanctions disrupting Russian assets abroad.

West has been imposing sanctions on Russia primarily in response to Russia's actions in Ukraine. Sanctions were also imposed in connection with issues such as human rights abuses, cyberattacks, and interference in foreign elections.

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Notably, this marks the first instance of a high-profile Russian business leader losing control of their property in this manner.

Kremlin spokesman Dmitry Peskov said that this is "solely linked to economic expediency and compliance with the current legislation of the Russian Federation and taking into account the known international economic situation that is around us now."

Rolf has announced the appointment of Alexei Gulyaev as the new CEO and Svetlana Vinogradova as the first deputy, assuring that the temporary management will not impact its operations.

Russia's federal property management agency, Rosimushchestvo, plans to develop Rolf and enhance its financial performance.

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Petrov, however, viewed this move as a severe blow to Russia's investment landscape, questioning the willingness of investors, especially from Asia, to engage with Russian assets.

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"This has a devastating effect on everyone. The state is, as a rule, inefficient, especially in such things as retail," Petrov said.

(With inputs from agencies)