Russia's largest car dealership faces searches nationwide as founder stays abroad to avoid financial charges

On the morning of June 27, investigators began searching a number of car dealerships belonging to the company Rolf in Moscow, St. Petersburg, and other regions of Russia, Fontanka reported. Rolf, founded in 1991, is Russia’s largest car dealership franchise: its revenue in 2018 was 229.7 billion rubles ($3.6 billion). In addition to the searches at Rolf dealerships, law enforcement officers also searched the company’s headquarters on Altufyevskoye Highway in Moscow. According to Interfax, the office closed as a result. Kommersant discovered that the searches involved both employees of Russia’s Investigative Committee and operatives for Division “K” of the FSB, which is responsible for financial investigations. The St. Petersburg branch of the FSB confirmed that its agents were involved in searching a large car dealership company but did not name the firm.

A Rolf representative said investigators arrived at the company’s offices at around 9:00 AM local time and presented employees with a warrant that “has nothing to do with the company’s activities.” The representative went on to argue that the investigators had interfered with the company’s work and caused inconvenience to its clients. “This kind of behavior carries risks for the reputation and the image of any car dealer. We are recording all violations,” he said.

Rolf founder Sergey Petrov, who currently leads the company’s board of directors, told RBC that the searches could be related to a criminal case that has been open since 2014 to investigate charges of illegal monetary transfers from Russia to other countries. “We supposedly overestimated the value of some company and paid huge money for it,” Petrov said. He explained that Rolf valued the company at three billion rubles, but investigators argued it was only worth “several hundred million.” The Rolf founder added that “there were withdrawals at [the international auditing firm] PricewaterhouseCoopers” in April in connection with the same case.

Representatives of Russia’s Investigative Committee confirmed that the searches at Rolf were authorized under an illegal international transfer case. Investigators believe that in 2014, Sergey Petrov transferred money earned through Rolf to accounts belonging to Panabel Ltd., a company he owns in Cyprus. According to the Investigative Committee, the transfer was accomplished through a false agreement to buy stocks from the company Rolf Estate for prices inflated by four billion rubles (now $63.4 million). That money then landed in Petrov’s hands. Investigators added that the leaders of the other companies involved took part in the crime as well.

The case against Petrov and a group of other Rolf leaders is classified under Article 193.1, part 3 of Russia’s Criminal Codex, which carries a sentence of five to 10 years in prison with a fine of up to one million rubles ($15,850). The statute covers transfers of money in large quantities to the accounts of non-Russian residents using falsified documents.

In an interview with Forbes, Petrov said “it’s possible this is related to my political position or possibly a seizure attempt by corporate raiders.” Petrov told RBC that “we have started seeing offers” to sell Rolf at very low prices, including “for half its value.” The entrepreneur and his family are currently located outside Russia, and he has expressed an intention to remain there to avoid risking arrest.