Actions by the Kremlin Raise Concern

View of the Kremlin and the Kremlin embankment by the Moskva Riv

CBJ — The office of Russian President Vladimir Putin rejected suggestions that the arrest of an influential billionaire was part of a strategy to gain control of his business. However, there are concerns about the true motive behind the arrests and that the Kremlin’s tactics could be intended to take control away from powerful adversaries.

Ziyavudin Magomedov, who is worth $1.4 billion, was arrested Saturday along with his brother after the court refused to release him on the equivalent of $44 million bail, which is how much the police says he embezzled from infrastructure contracts he received from the government.

The 49-year-old businessman from Russia’s Dagestan owns Summa, a huge conglomerate that includes energy, infrastructure, construction and agriculture assets. He is believed to be part of the inner circle of Prime Minister Dmitry Medvedev, the former president who has enjoyed the support of Putin.

Magomedov has received lucrative government contracts to build infrastructure for Russia’s showcase projects such as the World Cup.

The arrest of the brothers on accusations they are part of a “criminal group” has stoked speculation that they have fallen victim to Kremlin infighting aimed at stealing his business. If charged, they face a potential life sentence in prison.

@CanBizJournal

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