Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Alstom Sues Ex-Director For Armed Plant Raid

French-German industrial giant Alstom has filed criminal charges against the former director of its Yekaterinburg plant for seizing the property with armed guards.

Anatoly Kuznitsin, who was fired in March, took control of Alstom SEMZ with 40 armed men early Monday. The takeover came just hours after a Sverdlovsk arbitration court ruling allowing the renationalization of the factory took effect.

Kuznitsin and his guards left the plant Tuesday afternoon — but only after "150 employees worked to repel the armed attack," said Peter Jaerisch, Kuznitsin's replacement as general director.

Alstom SEMZ is Alstom's largest joint venture in Russia. The company holds 95 percent of the joint venture's voting rights. Alstom, which had global sales of $18 billion last year, has invested more than $100 million in projects in six of Russia's 89 regions over the past 10 years.

Alstom has invested about 10 million euros ($8.5 million) in the Urals plant since the joint venture was established in 1994. The plant produces power-distribution equipment for factories and public transportation. Alstom SEMZ had sales of about 250 million rubles ($8.8 million) last year, of which 96 percent were domestic.

Kuznitsin was fired after approving a court's decision to renationalize the plant in February. Alstom has accused him of initiating the case and of setting up a company within Alstom in order to strip assets.

Kuznitsin has contested his termination, saying the arbitration court forbade Alstom SEMZ from calling the extraordinary shareholders meeting at which he was fired. He has obtained 10 court rulings ordering him reinstated as general director and has made two earlier armed attempts, on March 3 and May 24, to retake his post.

Kuznitsin's lawyer, Natalya Sukhareva, said her client and Alstom have been in confidential discussions and thus would not comment on recent events.

Jaerisch, who was voted in as general director at the contested shareholders meeting, estimated that the plant lost 2 million rubles during Monday's takeover attempt.

Alstom representatives angrily accused the regional administration of supporting Kuznitsin's actions.

"These actions, the armed takeover with the help of OMON and the police, of course can't be carried out without the knowledge and tolerance of the [regional] administration," said Gerd Lenga, Alstom's lawyer.

Vladimir Ushakov, the president of Alstom Russia, said Alstom has no plans to leave the Sverdlovsk region. "We intend to continue the process of protecting our interests," he said.

Ushakov expressed hope that the "periodic" armed raids would stop, but fears that the investment climate in the region would not improve. He noted that Sverdlovsk Governor Eduard Rossel demanded that the criminal case be handed over "to his control."

"Sverdlovsk is a very attractive region from an economic point of view, but from the point of view of foreign investors, it is extremely difficult," said Andrea von Knoop, director of the German Economic Union in Russia. "There are regions that work seriously with investors. … Unfortunately, Sverdlovsk is not one of them."