Roshen, Ukraine’s leading confectionery company, which is owned by Ukrainian President Petro Poroshenko, will close its Lipetsk-based factory in Russia. The company will lay off 700 employees and completely halt its operations by April, according to a statement by the company on Jan. 20.
“The decision was made due to political and economic reasons,” Roshen’s statement read. “The arrest of property, imposed by the Investigative Committee of Russia as part of a criminal case on alleged tax fraud, made the sales of the factory impossible.”
Poroshenko has long been criticized by Ukrainians for continuing to do business in Russia despite the Kremlin-instigated war against Ukraine that has claimed 10,000 lives and the seizure of Ukraine’s Crimean peninsula. In Russia, Roshen’s operations have come under attack from the Russian authorities.
The company reported that over the last few years the production at the Lipetsk confectionery factory had fallen by three times. In 2013, the Federal Supervisor of Consumer Rights Protection banned the import of Roshen products from Ukraine to Russia.
In the statement. the company complained about the media bashing it had received in Russia and Ukraine and pressure from the Russian authorities on trade organizations for selling Roshen products.
In April 2015, a Moscow court ordered the factory to repay 180 million rubles ($3 million) in tax debts. Simultaneously, the Investigative Committee of Russia froze the assets of the factory.
Poroshenko, one of Ukraine’s richest citizens with a fortune estimated to be close to $1 billion, promised to sell his confectionery business when he was elected in 2014, but did not.
Roshen was in the center of an offshore scandal in April when the Panama Papers, a massive leak of documents from Panama’s Mossack Fonseca law firm, revealed that Poroshenko owns an undeclared company in the British Virgin Islands through which he was managing some of Roshen’s affairs. Many accused Poroshenko of tax evasion, something he denied.
Poroshenko’s lawyers at the time said that the structure was the only way to move the company into a blind trust with the aim of selling it.
