Carlsberg's executives arrested amid fraud charges post-Kremlin takeover

Written by Henrik Rothen

Nov.17 - 2023 7:49 PM CET

Carlsberg's executives arrested amid fraud charges post-Kremlin takeover.

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Denis Sherstennikov and Anton Rogachevsky, senior executives of Carlsberg's Russian division, Baltika Brewery, have been arrested on fraud charges. This development follows the Kremlin's acquisition of Carlsberg's subsidiary a few months earlier.

Reuters reports that the St. Petersburg District Court ordered the temporary arrest of these top leaders on Thursday, with the charges related to fraud and valid until December 30.

The prosecutors allege that Sherstennikov and Rogachevsky illegally transferred intellectual property rights to Carlsberg, even after the Moscow government's takeover of Baltika. In Russia, such large-scale fraud offenses could lead to a maximum of 10 years in prison.

The St. Petersburg investigators claim that the disputed rights, worth over 295 million rubles (approximately $3.89 million), were crucial for Baltika's distribution of products across several countries, including Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan, Mongolia, and Belarus, as reported by the BBC.

Carlsberg, under pressure since the onset of the invasion of Ukraine, had intended to divest its Russian operations. However, in July, a decree by President Vladimir Putin resulted in the Kremlin assuming control of Baltika Brewery.

In October, Carlsberg announced the termination of all licensing agreements for the production, marketing, and sale of its products in Russia, allowing Baltika until April 1, 2024, to deplete its existing stock and utilize pre-purchased ingredients for Danish brand recipes and names.

Carlsberg condemned the Russian state's actions in a statement, describing them as an attack on innocent employees and a ploy to legitimize the unlawful takeover of their Russian business. The company emphasized its commitment to the safety of its employees and pledged support for the detained executives.

According to the BBC, Baltika has appealed to the arbitration court, seeking to prevent Carlsberg from ending the licensing agreement. This year, Moscow introduced laws enabling the confiscation of assets from companies based in countries deemed "hostile" by the Russian government.