Russia Seizes Candy Factory Owned by Ukraine Leader Poroshenko

Production At Ukrainian Chocolate Maker Roshen
A worker arranges boxes of chocolate on the production line at a Roshen Confectionary Corp. factory in Kiev. Photographer: Joseph Sywenkyj/Bloomberg

A Russian court ordered the seizure of a factory belonging to Ukrainian President Petro Poroshenko’s confectionery business Roshen, hampering his plans to sell assets, the company said.

Roshen lost the right to manage some properties at the Lipetsk facility south of Moscow until September 13, according to a statement on the company’s website on Tuesday. The court alleges that Roshen illegally claimed 180 million rubles ($3.5 million) in value-added-tax refunds, Roshen said, adding that it will challenge the ruling. Anna Fadeeva, a spokeswoman for the Basmanny district court in Moscow, didn’t answer repeated phone calls for comment.

“The Russian side purposely uses all methods to deprive the company of a possibility to sell Russian assets,” Roshen said in the statement.

Poroshenko came to power in elections last May after his predecessor Viktor Yanukovych fled to Russia amid protests demanding closer ties with the European Union. More than 6,000 people have died in the subsequent war between government troops and pro-Russian insurgents in the country’s east.

Before his appointment, Poroshenko said he would sell Roshen, his biggest asset with production in Ukraine, Lithuania, Russia and Hungary. The sales process may take months or years, Poroshenko’s press office said in an e-mail this week.

Roshen, which had about $1 billion in revenues in 2014 according to the website Candy Industry, bought the Lipetsk factory in 2001. The unit makes caramel, jelly and other products which account for about 7 percent of Russian candy market, the company estimates.

Ukraine was the leading supplier of sweets to Russia accounting for more than half of imports, according to data from Russia’s Guild of Bakers and Confectioners, before Russia’s consumer watchdog banned deliveries of Ukrainian sweets.

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