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Researches 20 September 2022

More Than 2,000 British Companies Continue Doing Business with Russia

More Than 2,000 British Companies Continue Doing Business with Russia

YouControl R&D Center has assessed the activity of British companies leaving the Russian market. Analysts investigated the status of Russian-British interpenetration in the equity market: the number, the most popular places of registration of subsidiaries, and the scope of their activities. They also identified the Top 20 largest Russian companies whose owners have a British residence registration. The details are in the new research.



The total number of Russian business companies whose founders are British residents is 2,370 legal entities.

  • British subsidiaries in Russia often serve as a cover for international financial flows leading to Russian owners.

  • HSBC Holdings, Unilever, GlaxoSmithKline, AstraZeneca, Linde, Legal & General Group, and LyondellBasell Industries are companies headquartered in the UK and support cooperation with Russia.

  • The largest share of British capital in Russia is represented in construction, wholesale trade, real estate operations, transport, logistics, and IT.

  • Most companies with nominal British owners are concentrated in Moscow and St. Petersburg.

  • Three British companies, nominal owners of Russian assets from the Top 20, turned out to be controlled by Russians: Investitsionnaya Kompaniya DENMAR-FINANCE LLC; LADOGA Group LLC; BERKSHIRE, LLC.

  • Billionaires Pavel Durov and Yuri Milner, businesspeople of Russian origin, provided funds in the early stages to the car rental startup WHEELY LTD. with an office in London.

  • There are almost 5 times as many Russian companies in Britain as there are British companies in Russia. 


British Business Boycott of Russia


The withdrawal of companies from the Russian market or closing up operations there is called a business boycott, which is voluntary or indirect sanctions. To quantify the level of business withdrawal from Russia, YouControl has developed a unique integral index ELI (Exodus Level Index). It aggregates information on the distribution of the number of companies from a particular country across five categories of corporate reaction to the Russian-Ukrainian war. Recommendations of Yale University researchers on the classification of foreign companies were taken into account when forming the index. In a preliminary study, the YouControl R&D Center has already assessed the withdrawal rate of foreign companies from Russia by country and economic sector.


According to Yale University, the number of researched and identified British companies involved in business cooperation with the Russian Federation reaches 96. Of these:

  • 2  – Digging In – continue operations in Russia without restrictions

  • 6  – Buying Time – continue operations but not invest in the development

  • 4  – Scaling Back – reduce only some operational processes

  • 41 – Suspension – suspend activities, leaving the possibility of return

  • 43 – Withdrawal – cease operations or withdraw from the Russian market.


The average index of business boycotting of Russia by British companies ELI = 4.3. And this is quite a high level on a scale from 1 to 5. As a reminder, the minimum index of 1 (red) is assigned to the country where all companies remain in Russia. While the maximum index of 5 (green) means that all companies in the country have decided to withdraw from the Russian market.


The main areas of business of British companies that have stopped or suspended business with the Russian Federation:

  • Business Services (18 companies);

  • Finance (10);

  • Retail trade (9);

  • Food manufacturing (7);

  • Heavy industry; Light industry; Engineering and construction (5 companies from each sector have suspended their cooperation with Russia).


Business with Russia continues in Healthcare, Chemical industry, and Finance – two British companies in each sector. The exact number is in Business Services. The remarkable fact is that a significant share of this sector withdraws from the Russian market, but some remain.


The business boycott`s geography of the Russian Federation as of August 31, 2022


Having studied the world's largest companies included in the American Forbes Global 2000 list, seven companies were found to be headquartered in the UK and maintain cooperation with the Russian Federation. In particular, HSBC Holdings, Unilever, GlaxoSmithKline, and AstraZeneca continue business without new investments, and Linde, Legal & General Group, and LyondellBasell Industries have partially reduced activity. Instead, large companies from Forbes Global 2000 as Diageo, M&G, CNH Industrial, Rolls-Royce Holdings, and JD Sports Fashion have suspended operations in Russia. The following well-known brands have entirely ceased business or withdrawn from the Russian market: Vodafone, Reckitt Benckiser Group, BP, Imperial Brands, Willis Towers Watson, London Stock Exchange, Compass Group, WPP, J Sainsbury, Mondi, Centrica, Wm Morrison Supermarkets.


British capital in the Russian market


As YouControl analysis shows, nearly one hundred British companies above, whose reaction to Russian aggression is closely monitored by Yale University scholars, are just the tip of the iceberg. Analysts have studied the Russian Unified State Register of Legal Entities and found that the total number of Russian business companies whose founders are residents of Great Britain is 2,370 legal entities. YouControl has a complete list of British companies with current and historical business connections with Russia.


A detailed analysis of the largest Russian companies with British capital has shown that a substantial part of the nominal British owners is under the control of the ultimate beneficiaries of Russian or non-British origin. 


Dropped a British anchor on Russian metropolises


Most companies with nominal British owners are concentrated in the capital of Russia, Moscow (41%). More than a hundred companies with British capital are registered in the Novosibirsk region, St. Petersburg, and the Moscow region.


The 10 top regions of Russia by the number of companies with British owners


The high concentration of British business in the metropolises of the Russian Federation reflects a general trend characteristic of commodity-based economies. That is, the focus is on the "growth poles". On the other hand, companies focus primarily on the service sector.


How do the British make money in Russia?


British capital in the Russian Federation in terms of the number of controlled companies is the most represented in the Construction sector (15.8% of all British enterprises), Wholesale trade (11.4%), and Real estate transactions (7%). The sectors of Transport and logistics (6%), IT (4.2%), Food industry (4.1%), and Finance (3.5%) are also prominent. Retail trade, Business services, and Management consulting round out the top ten. 


Russian economy’s the most popular sectors, which are of most interest to British shareholders


Typically "industrial" sectors of the economy, such as Metallurgy, Mechanical engineering, Chemical industry, or Oil and gas, have relatively fewer companies with British shareholders. That may be due to historically high barriers to non-residents' access to strategic, highly profitable industries controlled by the pro-Kremlin oligarchic elite. Indeed, those industrial enterprises nominally under British control often have ultimate beneficiaries of Russian origin. They use British jurisdiction to structure their business within broad financial-industrial groups.


The British nominal equity capital in Russia is represented in various formats by the level of participation in the authorized capital. Thus, 644 Russian companies are 100% controlled by non-residents from Great Britain. That is 27% of the total number of companies with UK founders.


In total, at least 958 (40%) companies are majority controlled by British owners, with more than 50% of the authorized capital owned by UK shareholders. In 820 companies with nominal British shareholders (35%) their share of participation in the authorized capital is not disclosed in the Russian Unified State Register of Legal Entities (EGRUL). And companies with the indirect participation of British capital, in particular, hidden behind nominal owners from offshore jurisdictions, are not taken into account.


The twenty largest Russian companies whose owners have British residence registration


British equity capital in the Russian market is represented in various forms. A detailed analysis of investors indicates that a significant proportion of British subsidiaries in Russia are British only de jure because their nominal owners are residents of the United Kingdom. At the same time, these de facto shareholder companies often serve as a cover for international financial flows and complex chains of corporate rights, which ultimately lead to both Russian and various non-British beneficial owners.


Among the Top 20 companies by the amount of authorized capital with nominal British shareholder control, none was found to be 100% British. That confirms the "transient nature" of British share ownership over Russian companies. 


For example, a certain share of nominal British owners of Russian companies are either nominal minority shareholders under explicit Russian control (NORD GOLD PLC, GAZPROM LIMITED, ALDERPIKE LTD, MOSCOW NARODNY BANK LIMITED), or are themselves part of larger transnational groups from the USA (JP Morgan, Disney), Japan (Sumitomo Mitsui Financial Group), etc.


Therefore, for a more representative analysis of the presence of British shareholders in the Russian market, let us consider the Top 20 companies exclusively with majority owners having a British "residence registration". 


Top 20 Russian companies under the nominal control of British shareholders


Among the shareholders of the Top 20 Russian companies registered in Great Britain, only three companies were found in which the ultimate beneficiaries are nominally representatives of British business. These include RECKITT BENCKISER LLC controlled by the British holding Reckitt Benckiser Limited and SCHNEIDER ELECTRIC SYSTEMS LLC owned by Invensys Group Limited. As well as FIRST REGIONAL FINANCIAL INVESTMENT COMPANY LLC with an authorized capital of over 10 billion rubles. According to the EGRUL (Russian Unified State Register of Legal Entities), it belongs to the British RACHID GROUP LTD, which in British registers has the status of Active – Proposal to Strike Off. Historical data shows that the company is controlled by Mr. Anthony Richard Charles Jones, a British citizen who also acted as its director.


A significant proportion of British shareholding companies have signs of so-called "shell companies". Three British companies that are nominal owners of Russian assets from the Top 20 turned out to be controlled by Russians. Thus, the ultimate beneficial owner of INVESTITSIONNAYA KOMPANIYA DENMAR-FINANCE LLC through WESTAGE CAPITAL LLP is Mr. Andrey Vertiy. LADOGA GROUP LTD through the British "shell company" LIGHTING ASSOCIATES LIMITED is owned by Victor Grigoriev. And the direct owner of LLC BERKSHIRE through SILLFRESH MANAGEMENT LIMITED is under the control of Russian citizens - Ms. Nina Kruglova and Ms. Olga Avdeeva.


Some of the nominal owners have already been terminated/are in the process of termination. ALFA LLC is owned by ATLANT INVEST LTD, which in turn is listed as dissolved in the British register. The person who exercised significant control is Stif Saigon, a resident of France and a citizen of Ukraine.


The research revealed that some British companies that own Russian assets have beneficiaries from such jurisdictions as South Africa, the USA, Ireland, Austria, Italy, and Switzerland.


There are also cases of registration of British shareholder companies of persons with citizenship from other countries: Latvia, Sweden, and Great Britain. Analysis of the board of directors and historical information points to signs of a Russian trace. You can see Russian business connections abroad in detail using the RuAssets, which was developed by YouControl at the beginning of Russia's full-scale invasion of Ukraine. The tool is free for media professionals.


For example, the Russian companies YAKIMANKA ESTATE LLC and REDCAR RUS LTD are owned by the British company REDCAR TRADING LLP, the beneficiary of which is Mr. Jurijs Livkiss from Latvia. The second officer of REDCAR TRADING LLP, besides the owner himself, is a Latvian citizen with the Russian surname Eduards KOZLOVS. At the same time, he is the director of another shareholder of a Russian company with alleged "British capital" at the Top 20 of LONDRIDGE RUS LLC – LONDRIDGE SERVICES LLP. The beneficiary of this company is another Latvian citizen, Mr. Vitalijs Soloduns. The former owners are both Eduards KOZLOVS himself and the owner of the first company, Mr. Jurijs Livkiss. It is quite strange, as for British business traditions, circulation of directors and owners in nature.


Another type of so-called "British shareholders" are startups with founders of Russian origin who have received foreign citizenship. The illustrative case of Wheely, a car rental company in London, allows users to book rides with a driver in luxury cars. The founder of the company Anton Chirkunov, the son of the ex-governor of the Perm region Oleg Chirkunov, has a Swiss passport and is also a resident of the United Kingdom. It is noteworthy that capital providers in such projects, as a rule, are also Russian businesspeople. In the case of Wheely, Russian-born billionaires Pavel Durov, Yuri Milner, and other investors joined certain rounds of capital raising. Since the company is active in the market of aggregators of luxury cab services in London, the logical question arises of data security and the sustainability of the transport infrastructure in the capital of Great Britain.


Discrepancies in the British and Russian registries 


As YouControl analysis has shown, despite the facts of the dissolution of companies with British owners, these changes are not always reflected in the Russian registries. For example, MEDCOM-MP LLC is owned by a British company PROLOGICS LLP, which, in turn, is controlled by US (Paul Andrew Christodoulou) and Greek (Panagiotis Sofianos) citizens, and also has the status of "Liquidation".


The British shell company of the sanctioned oligarch Alisher Usmanov, FERROUS INVESTMENT LIMITED, which owns the Russian subsidiary JSC HOLDING COMPANY METALLOINVEST, is also currently dissolved and excluded from the British register. At the same time, the British company of Alexey Mordashov NORD GOLD PLC, which is a minority shareholder of the gold mining companies RUDNIK TABORNY LLC and BEREZITOVY RUDNIK LLC is still active, although the ultimate beneficiary himself is under sanctions.


There are almost five times as many Russian companies in the UK as there are British companies in Russia. There will be more details about this in the next YouControl article on the investigation of Russian companies in the UK. 


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