Nornickel’s President Potanin Believes External Management of Russia-quitters’ Assets Better than Confiscation

The confiscation of assets of firms that have announced their withdrawal from the Russian market should be approached very carefully, introduction of external management at such enterprises is a better option leaving the owners an opportunity to return, Nornickel chief Vladimir Potanin believes.

“This [confiscation] will take us back a hundred years, to 1917, and we will feel the consequences of such a move, global distrust of Russia on the part of investors, for many decades,” the businessman said.

Russia’s economic measures in response to the restrictions caused by the situation around Ukraine should be pragmatic and aimed at maintaining positions in the markets, he said.

“I consider it very important that in the current situation, Russia’s economic response measures are well-considered, pragmatic and do not lead to additional difficulties for the domestic economy,” Potanin stressed.

The decision of many companies to suspend operations in Russia is emotional in nature and was made under unprecedented pressure on them from public opinion, Potanin believes.

“Therefore, they will most likely return. And personally, I would reserve such opportunity for them,” he said.

Nationalization, that is, the purchase of enterprises from the owner and their subsequent transfer to state ownership, happened in recent history.

“This is a more civilized approach, which, as a rule, is used to restructure entire industries, often with subsequent privatization. Therefore, I’m not sure how expedient it is today to talk about the nationalization of assets of foreign companies,” Potanin said.

According to Potanin, a more adequate measure is the proposal of the Economic Development Ministry to introduce external management at such enterprises.

“This will allow owners to keep their property, and companies to avoid collapse, continue to produce products and pay money to employees,” he believes.

Against the backdrop of largely irrational and even hysterical events on global markets, Russia must look solid and calm, and its efforts must be aimed not at ‘slamming the door,’ but at maintaining the country’s positions in various markets, Potanin said.

Many states use sanctions as an instrument in competition, and it would be wrong to help them achieve these goals, he said.

“On the contrary, if we are being squeezed out of the markets, then we should try to stay on them, and not voluntarily refuse to participate,” Nornickel chief concluded.

Nornickel is the world’s largest producer of palladium and high-grade nickel, with market shares of 40% and 20% respectively, and also a major producer of copper and platinum.