In Russia, Battle Between Rosneft and Private Firm Stir Investment Worries

The conglomerate, which has assets ranging from farms to a cellphone operator, had hoped that by staying out of the political spotlight it could avoid legal entanglements. Executives seen as disloyal to the Kremlin have long been seen as targets, facing harassment and legal action. The onetime owner of the Yukos oil company, Mikhail B. Khodorkovsky, for example, was arrested after financing opposition politicians. While Mr. Yevtushenkov was placed under house arrest during Bashneft’s nationalization in 2014, because he had never dabbled in opposition politics, it was widely seen as a consequence of this business dispute.

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A worker at a Bashneft oil refinery in 2013. The dispute between the conglomerate Sistema and the Russian government began in 2014, when Bashneft, Sistema’s oil subsidiary, was seized and nationalized by the government.

Credit
Sergei Karpukhin/Reuters

“This conflict is causing a lot of harm to the investment attractiveness of Russia,” Aleksander Y. Abramov, a professor at the Russian Academy of National Economy and Public Administration, said in a telephone interview. “This case can create a precedent when any activity in the past can be contested, and property rights put in question, for any company.”

The dispute traces its origins to Sistema’s loss of its Bashneft oil subsidiary in the 2014 nationalization. Sistema had accumulated shares in Bashneft from regional elites, who had in turn acquired it years before from a regional government.

At the time of the nationalization, officials asserted that Russia’s federal government had erred in the original transfer of Bashneft to the regional government in 1993, and voided all subsequent transactions. The state property agency then sold a controlling stake in Bashneft to Rosneft.

The state energy company is now suing Sistema for mismanaging…

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