(Bloomberg) -- A Russian court ruled major grain trading house Rodnie Polya LLC should come under state control, Kommersant newspaper reported late Friday.
The ruling was in favor of the prosecutor’s claim that Rodnie Polya, formerly know as TD Rif, is in breach of the law because it is controlled by a foreign resident, according to the report.
The ruling marks another sign of the Kremlin’s crackdown on top assets owned by Russian tycoons through foreign entities. The trading company controls more than 20% of grain shipments through the Azov seaport, making it a strategic asset for Russia.
The firm’s owner, Petr Khodykin, is a resident of the United Arab Emirates and also has a second citizenship of Saint Kitts and Nevis, prosecutors said earlier. A foreign resident needs special permission from the government to participate in a strategic enterprise, and in this case there was none, Kommersant said.
The action is the latest upheaval in the Russian grain market since Vladimir Putin’s 2022 invasion of Ukraine. Russia is the world’s biggest wheat exporter, and local companies — some with links to the state — have moved to take control since major Western traders stopped originating grain for export there two years ago.
That also means the Kremlin has greater control over world grain and wheat supplies. Previously it had been using that to try and put a floor under Russian wheat prices for export, and seizing assets of “unfriendly” countries. Other businesses also have been brought under state control since the beginning of the war.
The court’s decision, made in a closed hearing, will not come into the effect immediately as Rodnie Polya has 30 days to appeal. The Russian Prosecutor General’s office filed a suit in December to take the company under state control.
Rodnie Polya fell out of favor with authorities last year after becoming entangled in a dispute with Russia’s agriculture regulator. That rift saw it lose its market leader position.
--With assistance from Andrey Lemeshko.
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