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Ksenia Sobchak doesn't have crabs Russian TV celebrity and former presidential candidate could lose millions of dollars on a seafood business venture. When her mother appealed to the Supreme Court, things only got worse.

Source: Meduza

Television host Ksenia Sobchak set out to become the co-owner of two crab companies in the Far East that were previously connected to the fugitive businessman Oleg Khan. A court hampered her plans, however, when it seized both the companies’ assets. In turn, Sobchak’s mother, senator Lyudmila Narusova, personally appealed to the Russian Supreme Court. This drew criticism from the popular political Telegram channel Nezygar, which has been linked to Alexey Gromov, the Putin administration’s first deputy chief of staff.

Ksenia Sobchak and a former Rosneft executive bought two companies. Within a month, its assets were seized.

Ksenia Sobchak and her business partner, former Rosneft Vice President Igor Soglaev, intended to establish a company that would become a leader in the Russian crab industry, according to Forbes. On March 12, Sobchak agreed to buy a 40-percent stake in two crab fishing and processing companies — Kurilsk Universal Complex and Moneron. Soglaev’s wife Yelena also agreed to purchase a 10-percent stake in each company. Senator Lyudmila Narusova — Sobchak’s mother — disclosed this in her appeal to the Supreme Court, addressed to Chief Justice Vyacheslav Lebedev.

By Narusova’s account, Russia’s Federal Tax Service refused to register contracts for the sales of shares of the two companies, and on March 30 the Yuzhno-Sakhalinsk municipal court seized both companies’ property at the request of Russia’s Investigative Committee. As Vedomosti reported, the court also seized the companies’ financial assets.

The court seized the assets because federal investigators consider Sakhalin businessman Oleg Khan — nicknamed “Crab King” by the Russian media — to be the companies' beneficial owner. Khan is currently a wanted man: investigators suspect that he organized the murder of businessman Valery Pkhidenko in 2010 and also unlawfully smuggled and sold crab abroad at underreported prices. He fled Russia in December 2018.

In her petition, Narusova points out that the municipal court hadn’t considered that — according to the Russian Register of Legal Entities — the legal owners of Kurilsk Universal Complex and Moneron are actually Viktor Ledukov and Dmitriy Pashov, respectively. Neither man is suspected or charged in the Khan investigation. Narusova emphasized that there is no proof that Khan owns either company.  

In the appeal, Narusova also shares that Ksenia Sobchak and Yelena Soglaeva suspect that the crab company assets were seized in an effort to prevent their acquisition of the business. Her petition implores the chief justice to look into the facts and take action. 

The Federation Council’s Committee on the Rules of Procedure and Parliamentary Governance intends to review Narusova’s letter to the Supreme Court, according to the news outlet Open Media. Committee chairman Vyacheslav Timchenko offered, “The very fact of the senator’s appeal to the Supreme Court calls for careful examination, because under the law we [senators] cannot influence the work of the courts at any level.” The committee will determine whether Narusova acted ethically, and look into the situation as a conflict of interest and abuse of office. 

Negotiations were held with the “Crab King” himself. The deal was worth millions of dollars.

Ksenia Sobchak told Forbes that she decided to dip her toes into the crab industry at the suggestion of Igor Soglaev, with whom she had worked on several business projects. It was assumed that Soglaev would take on a management role and Sobchak would be an investor. 

Soglaev indicated that he wants to unify the two companies, forming a single business group called “Moneron.” It would aim to acquire several smaller companies and emerge as a leader in the crab and fish processing sector. He noted that between the “Kurilsk Universal Complex” and Moneron (in its current incarnation), they have an annual crab catch quota of up to 10,000 metric tons (according to Vedomosti, the actual figure is 9,000). The companies’ total combined revenue amounts to 23 billion rubles (around $308 million), with a net profit of about 10 billion rubles (roughly $135 million) in 2019. 

Quotas determine how many metric tons of a particular fish or crustacean that a company is allowed to catch in a given year — effectively, its market share. Typically, the quota share for a particular fishing company is based on its yield from the previous year (this is called the "historical policy"). This was the case in Russia until last year, when the federal government instituted controversial government-run quota auctions for the crab industry.

Half of the quota shares are still divvied up based on historical policy, but the other half are auctioned to the highest bidder, much to the chagrin of small- and medium-size crabbers. Smaller companies are easily outbid by, for example, billionaire-backed companies like the Russian Fishery Co. (which now holds quotas for 15 percent of the entire Russian crab market), which is owned by Gleb Frank, Gennady Timchenko's son-in-law.

Sobchak and Soglaev didn’t disclose the sale price, but the television host told RBC that for her it was a “significant” sum, and in a conversation with Forbes elaborated, “we’re talking about millions of dollars.” On her personal Telegram channel, Sobchak said that she was using “her own hard-earned, honest money, on which taxes were paid” to fund her investment. She added that she has already fulfilled payment for her share of the companies. Igor Solaev said the price paid was market value. 

Negotiations, according to Sobchak, were held with Oleg Khan. While Soglaev acknowledged that Khan was the founder of the business and that the company was “in his sphere of influence,” he asserted that Khan was not the owner, and that they finalized their deal with Pashov and Ledukov. Soglaev told RBC that in late 2019 Pashov and Ledukov themselves came up with the proposal to sell half the business, as they were facing “administrative pressure.”

Sobchak claims that “competitors launched an unprecedented, brazen, and lawless campaign” soon after negotiations started, which resulted in the eventual seizure of the companies’ assets. “It’s absolutely clear that this is the doing of someone who wants to rob us of our business,” she said. She called the current situation “utter mayhem,” and added that she is not trying to put pressure on the investigation or the court, nor is she using her mother to advance her business interests. She claimed that she often consults her mother when she “sees injustice” — for example, at her request her mother made inquiries into the cases of Ivan Golunov and Oleg Sentsov.  

The Telegram channel Nezygar posted more than 40 entries about Sobchak in a three day span. The TV host suspects that Gennady Timchenko’s son-in-law is involved. 

The thwarted transaction became public knowledge on April 25 when the anonymous Telegram channel Nezygar reported on Lyudmila Narusova’s petition to the Supreme Court. “The amount in question is 4 billion rubles,” the channel’s author wrote. By April 27, Nezygar had published more than 40 entries and reposts on the subject.

Sobchak called the channel “clickbait” and remarked that “one Nezygar post is worth between 500,000 and 700,00 rubles” (about $8,000). In her interview with RBC, Sobchak said, “Without a doubt, this was a planned and paid campaign directed against me and my mother to humiliate and smear us.”  

The television host added that she wouldn’t be surprised if it turns out that Gleb Frank, who owns the Russian Fishery Company and son-in-law of billionaire Gennady Timchenko, is somehow involved with the posts on Nezygar. Sergey Izvolsky, who represents Frank, told RBC: “Ms. Sobchak’s supposition that Gleb Frank is involved with the posts is wrong. We have nothing to do with this situation.”

Gleb Frank owns a group of companies, including the Russian Fishery Company, called “Russian Crab.” According to Forbes, Russian Crab has an annual crab quota of around 14,500 metric tons. In terms of annual catch quotas in Russia, it shares first place with the North West Fishing Consortium. Forbes points out that Gleb Frank’s company became a leader in the industry thanks to catch quota auctions that took place six months after Oleg Khan fled Russia. Moneron and Kurilsk Universal Complex did not participate in these auctions.

Story by Alexander Baklanov

Translation by Rob Viano