ROSHEN Confectionery Corporation Statement about the Situation at its Enterprises in Russia
21 March 2014
As it was previously informed on July 29, 2013 Rosspotrebnadsor banned
import of confectionery products of ROSHEN Corporation to the Russian Federation.
As of March 20, 2014 ROSHEN Corporation has not received any official statement from
Russian part, which would justify the ban. Though they say the reasons are known.
Despite occurred circumstances ROSHEN Company continued developing confectionery
production at ROSHEN Lipetsk Confectionary Factory.
Throughout the period of Russian enterprises business activity, ROSHEN Corporation has
been investing on regular basis in the production development, setup of new production
lines to develop a greater variety of products. The Corporation invested in construction
of new facilities in Lipetsk oblast’, specialized on chocolate products, which would
allow to increase the overall production turnover in 1.5 times.
In February 2014 one more new production line was launched and construction of new
facilities have been in full swing, with a planned launch in 2014. Only for the last 4
years investments in construction reached 9 billion of Russian rubles.
As it occurred to us, a criminal action was opened against Russian enterprises of ROSHEN
Corporation initiated by UNICONF Holding (Moscow, Russia). According to the Tver’
District Court decree under the civil suit as part of the above mentioned criminal action
on March 14, 2014 all bank accounts of ROSHEN Corporation’s Russian
enterprises were seized.
Cash funds on these bank accounts were intended exclusively for business activity on the
territory of the Russian Federation and for investments in new factory construction. The
amount of cash funds, which was seized, equals 2 800 000 000 Russian rubles.
Due to the seize of all monetary resources of the abovementioned enterprises,
ROSHEN Corporation is unable to conduct its business and production on the territory of
Russia. The company is deprived the opportunity to meet the cost of raw materials, to
manufacture confectionery products, which have been always of high quality, to proceed
with the construction of new production facilities, pay taxes, having been the largest
tax payer in the Lipetsk Oblast, Russia. Just for the previous 2013 year and the first
two months of 2014 ROSHEN Russian enterprises paid taxes exceeding 1 billion Russian
Besides the seize of funds, on March 19th, 2014 Russian riot police officers
blocked ROSHEN enterprises in Lipetsk and the Lipetsk Oblast, and representatives of
Moscow Department of the Russian Ministry of Interior made demonstrational
search at the enterprises along with the forcible withdrawal of
At the same time a number of inspections have started at ROSHEN enterprises: inspections
of Federal Tax Service, Federal Customs Service, State Labor Inspection, Federal Service
for Environmental, Technological and Nuclear Supervision, also a suit has been commenced
by Lipetsk Office of the Federal Antimonopoly
Having occurred in such a situation and having received no explanations, currently ROSHEN
Corporation could draw the conclusion that a forcible takeover is being held at the
ROSHEN enterprises, as the amount on the controversy within the civil action, does not
conform with logics of Law and Economy.
ROSHEN Corporation will use its best endeavors to unfreeze the blocked funds in order to
fulfil its obligations in front of raw materials suppliers, production machinery
suppliers, and also salary payment by due date to the employees of its Russian
enterprises. Though, certainty in the successful reach of the objective is doubtful for
By now we realize that construction of new production facilities is frozen for an
indefinite term, as no one could be sure what are the next steps and what is a future
of ROSHEN Corporation Russian business entities.