The Russian government announced measures placing Japan Tobacco's (JT's) local Russian assets under its control. JT's Russian operations were valued at approximately ¥1.5 trillion as of the end of September, and 3 companies have become subject to Russian intervention.
The 3 Russian subsidiaries of Japan Tobacco (JT) have become subject to Russian control. As of the end of September this year, JT's Russian operations held approximately ¥1.5 trillion in assets, and the Russian operations are expected to account for approximately 25% of the group's total operating profit in the latest estimate, according to reports. The Russian measures are viewed as similar to moves involving European companies, and the future sale of the business and whether it should continue may become a focus.
In the stock market, JT shares hit the daily limit down on the 6th, and no trades were executed during market hours on the 9th either, marking 2 consecutive trading days without transactions. Uncertainty over the possible confiscation of assets in Russia has led investors to stop trading.
Russia's Kommersant reported that the Russian company temporarily administering JT's Russian operations is an industrial asset owned by Dremov, a former Federal Security Service (FSB) official, and noted that registration had only begun in September this year and that the address was a room in an apartment building in Moscow. Dremov has been linked to a person said to have close ties to President Putin.
The backdrop to these developments is reportedly a vested-interest structure linked to the Russian military conglomerate Rostec, and there is a view that the moves are part of the Putin administration's efforts to strengthen control over overseas assets. A survey by Yale University in the United States found that 65 Japanese companies continue to operate businesses related to Russia, and JT has a significant presence in the region.