Gleb Frank sells Russian Fishery Company and Russian Crab as sanctions hit
Gleb Frank, the founder of two of the largest seafood companies in Russia – Vladivostok-based Russian Fishery Company and Russian Crab – has sold his stakes in both companies to top managers after the U.S. decided to impose sanctions on him.
Frank is the son-in-law of Russian business tycoon Gennady Timchencko, allegedly a close partner of Russian President Vladimir Putin and the sixth-richest person in the world.
Statements from both RFC and Russian Crab said Frank has officially sold all of his stakes and resigned from positions held in both companies, effective 25 March.
All told, he sold a 70.1 percent stake in Russian Crab and a 70.09 percent stake in RFC to the companies’ top managers: Evgeny Orlov, Anton Chertkov, Alexander Sapozhnikov, Savely Karpukhin, and Stanislav Aksenov. Both companies said the deal was in line with market conditions, without disclosing the sum. With Frank’s resignation, Orlov has taken the role of board chair for both companies. Frank said he now plans to focus on other initiatives in Russia.
“I’ve made a decision to sell controlling stakes in the companies to key managers who have been helping me running these companies over recent years,” Frank said. “I’m sure they will be able to ensure sustainable operations, keep jobs, and deliver on obligations to our customers and creditors without my participation.”
Frank emerged as a powerful new player in Russia’s crab fishery after the country moved to a new quota auction system. Dubbed “the crab king” by media outlets in the country, Frank won more than one-third of the auctions for quota in 2019. He took control of RFC in 2018, after his founding partner sold a 44.7 percent stake to Frank.
The decision by Frank came after the U.S. Department of Treasury’s Office of Foreign Assets and Control (OFAC) added Frank and his wife, Ksenia Frank, to the Specially Designated Nationals (SDN) list. The sanctions threatened to block RFC and Russian Crab from the seafood markets in the European Union and Japan, business paper Kommersant reported. In addition, the sanctions could have cut off the companies’ fishing fleets from Western equipment producers.
Being named to the SDN list constitutes a complete ban on doing business with the U.S. It freezes personal and corporate assets located in the U.S. and prohibits any business transactions with American companies.
If both RFC and Russian Crab were frozen out of the global seafood market, it would effectively undo years of work the company has put into producing more value-added seafood products and growing its international markets. The E.U. was the biggest export market for RFC in 2021 – the company supplied 20,000 metric tons (MT) of pollock fillets and mince, compared to 12,000 MT in 2020. RFC previously said it planned to send 25,000 MT worth of pollock products to the U.S. in 2022. And both the U.S. and Japan are also top destinations for Russian Crab’s products.
As a result of international sanctions, concerns are mounting in Russia's seafood industry that its fleet-renewal efforts may be jeopardized. Russian shipyards have said foreign manufacturers are considering halting their supply of equipment to Russia and refusing to send non-Russian staff to Russia for start-up and commissioning works.
Photo courtesy of the Russian Fishery Company