Russian Businessman Petrov Facing Financial Investigation Says Probe Is Political

VIENNA -- Sergei Petrov, the former State Duma member and prominent businessman under Russian criminal investigation, denied he illegally moved money offshore, saying in an interview that he believed he and his business were being targeted for political reasons.

In an interview with RFE/RL's Russia Service June 28, Petrov said law-enforcement agents showed up to 12 addresses in Russia, including his company offices, his mother’s summer house, and the home of his driver.

He said some of the questions law enforcement asked “clearly were not connected” to a 2014 sale of shares between several of his companies, raising doubts in his mind about the investigation's real purpose.

“They asked, ‘Who pays you? How much?’ and so forth. It gives you this feeling that they wanted to find something else and this [case] is only a pretext,” he said, speaking at his home in Vienna.

Petrov, who built a network of imported car dealerships in Russia known as Rolf, spoke hours after Russian investigators announced they had detained a business associate of his.

The Investigative Committee said on June 28 that a Rolf board member, Anatoly Kairo, was detained for 48 hours on suspicion of helping Petrov to illegally funnel 4 billion rubles ($63.5 million) out of Russia in 2014.

The committee said a day earlier that investigators raided the company's offices in Moscow and St. Petersburg and questioned Rolf employees.

Petrov is a former member of Russia's lower house of parliament who clashed with the Kremlin about its policies in Ukraine and at home. He was one of the few independent-minded deputies in what is widely considered a rubber-stamp body.

Among other things, Petrov voted against a law that banned the adoption of Russian children by U.S. citizens and introduced restrictions for U.S. citizens' trips to Russia.

He also voted against another controversial law that expanded the powers of law-enforcement agencies and introduced new requirements for data collection and mandatory deciphering in the telecommunications industry.

Nor did Petrov take part in a parliamentary vote on the annexation of Ukraine's Crimea region in 2014. More recently, Petrov has been rumored to be a donor to opposition figures, including Aleksei Navalny, something the businessman denied.

"I did not help [him]. But in any case, he is what? Equivalent to the terrorist group ISIS?," said Petrov, referring to the Islamic State extremist organization.

The 64-year-old businessman reiterated his opposition tone, calling Russian President Vladimir Putin a "weak leader" who is unable to curb the abuses of bureaucrats and law-enforcement officers.

Investigators have said the probe stemmed from a decision in 2014 by Petrov's Cyprus-based holding company Panabel Limited to sell shares in Rolf Estate to Rolf in 2014 for 4 billion rubles. Rolf Estate owns the property under the company's Moscow dealerships.

Investigators claim the Rolf Estate valuation was excessive, charging him with breaking a relatively new Russian law on offshore transactions known as Article 193.1.

Petrov told RFE/RL he restructured the company to make it more transparent. He has said in the past he considered selling shares of Rolf on the stock exchange, but did not clarify if the corporate restructuring was tied to those plans.

Petrov said the 4 billion rubles valuation was determined by independent auditors.

“No one [investigators] asked us for the independent evaluation. I have this feeling that it is being consciously ignored,” he said.

Investigators took all financial documents as well as computers from the company’s largest offices.

Dmitri Kostalgin, a Moscow-based tax lawyer, said Article 193.1 has been abused by authorities and is more of an "instrument to scare the business community," he said in an opinion piece for RBC newspaper. The number of cases opened under the article is doubling every year, he said.

He described it as the business community's equivalent of law enforcement planting drugs on a suspect.

The law permits police to "check any company with offshore transactions. If they don't like the price in the contract -- go to jail. If you buy shares from your own company -- go to jail," he said.

News of the investigation has frightened some of Rolf’s partners, including banks, Petrov said. However, the company continues to operate as usual, he said. The company also sought to allay its clients' concerns.

"Our dealer centers are working regular hours. Rolf has always fulfilled its obligations to its clients and will continue to fulfill them going forward," the company said on its website . The current situation will be resolved in the very near future in our favor."

Petrov formed Rolf in the early 1990s just as Russia shifted to a market economy. Today, the company consists of 62 showrooms offering 22 automobile brands, including Porsche, BMW, and Land Rover.

Rolf posted a net profit last year of 6.25 billion rubles ($99 million).

Forbes estimates Petrov’s net worth at nearly $1 billion.
With reporting by Interfax