. Last Updated: 07/27/2016

U.S. Trading Firm Acquires Optgalant

The scene in the crowded, stuffy room on Sadovnicheskaya Ulitsa in central Moscow was a painfully familiar one in increasingly capitalist Russia these days: Out with the "Red directors" and in with fresh blood.

Symbolic of the old guard in this case was Vasily Anufriyev, 75, a Soviet-hardened manager who was, until late Thursday night, the director of the Moscow trading company Optgalant, where he had served for more than 20 years. Optgalant owns a huge multi-story warehouse complex in outer Moscow.

Anufriyev didn't bother to go to the meeting to witness what he knew was inevitable; a clear majority of Optgalant's present and former employees agreed to sell their shares to a foreign company.

Nearly 97 percent of voting shares were cast in favor of a new and much younger manager, Sergei Izotov, a deputy director of the warehousing and trading firm Items, which has rented space from Optgalant for four years.

It was an anticlimactic end to a struggle that at times threatened to turn ugly.

The main force behind the changes, American entrepreneur and Items general director Jeffrey Sweetbaum, said he wished things could have worked out differently. "They left us no choice but to try to acquire them," he said.

Their relations were never cozy, Sweetbaum explained, and went from bad to worse about 18 months ago when Optgalant abruptly raised Items' rent by 50 percent, claiming soaring costs.

Both sides seem to agree that the complex was in dire financial straits, with plummeting turnover leaving staff redundant. One saleswoman said the work force had shrunk by a factor of four.

But despite the obvious crisis, Sweetbaum said, Anufriyev refused to consider an investment proposal to inject $2 million into the company -- but would also have cost the old boss his control.

"If some people are resistant to change, these people were extraordinarily so," Sweetbaum said.

The ranking member of the old guard at the shareholders meeting was Sender Segal, a deputy director under the old management and a 28-year veteran of the company.

Segal said Optgalant's financial crisis was brought on by its bank, Kommerchesky Norodny, which owes the firm 3 billion rubles ($568,000). Troubled Kommerchesky currently is under Central Bank administration.

A member of the former five-member board of directors, Segal is suddenly in the minority now that shareholders have added six players from the Items team, including Sweetbaum.

About to hit pension age, Segal is unsure what his future might bring.

"That depends on Jeffrey," he said.

Segal defended Anufriyev to the last. "He's a magnificent director, a good old-style factory director, and I'm 100 percent sure that he has suffered from these events," he said.

But Sweetbaum, 35, said Anufriyev and his comrades were all but impossible to work with. "He is absolutely the archetypical Red director controlling absolutely everything," he said. "They really don't believe that there is a better way to run the enterprise."

Sweetbaum said that when Items staffed a van outside the warehouse complex this spring with representatives offering to buy employees' shares, Anufriyev switched off the elevators at the complex -- thereby all but halting work.

Sweetbaum said the standoff dragged on for nearly three days before a couple of Polish truck drivers stopped Anufriyev in his car and threatened to kill him.

Segal contended there was simply no money to keep the elevators running.

"That's a question of payments. You pay, you get to use them. You don't pay, you can't use them," he said. "Izotov will now be the general director. If he doesn't get paid for the electricity, the hot and cold water, the operation of the lifts, he will say 'Excuse me, you didn't pay? I'm shutting you off.' It will be exactly the same."

But accusations against Anufriyev wouldn't go away. Thursday night another Items representative and new board member, Vladimir Leonov, stood before the 80-strong crowd to address point No. 11 on the agenda: "The scheduled cessation of the authority of Vasily Nikolaevich Anufriyev." That point, like 10 others, passed by a wide margin.

Leonov and others spoke of how the former board handed over to Anufriyev 750 million rubles worth of shares. The ex-general director "grossly violated the rights of Optgalant shareholders," Leonov said.

"This is the first we've heard about it," said one shareholder. "It could well be true. We don't have much to do with the board of directors."

A saleswoman, said she planned to vote for Izotov and said she hoped the new management would whip the place into shape. "We hope things will get better. We want to work."

Sweetbaum, a fast-talking New Yorker, is no stranger to the takeovers. In Kostroma he's acquired a machine-making firm and a plywood company and has sold off a share in a forestry company.