While the restructure in VK (ex-Mail.ru Group)’s ownership announced last week is making the Kremlin’s control over Russian social media even stronger, business motives are also involved, believe insiders.
As reported by The Bell, Sogaz is said to be the real managing partner here, even though technically speaking, the new ownership structure at VK is a diarchy with management powers equally shared with Gazprom-Media.
According to a source, the dual arrangement serves two purposes:
- Avoiding potential US sanctions, evading applications of the US Treasury’s so-called “50-percent rule.”
- Increasing VK shareholders’ capacity to invest in the company;
The Bell also notes that former shareholder Alisher Usmanov’s single-digit economic interest in VK was always significantly smaller than his controlling voting interest. The business itself (a “suitcase without a handle,” quipped one source) earned far less money than Usmanov’s other assets like Metalloinvest ($139 million vs. $1.34 billion in 2020).
Additionally, as Vkontakte (Russia’s leading social network owned by VK) gradually ‘degraded’ and started losing market share to foreign social networks, the Kremlin became anxious and the company became a headache for Usmanov. Before settling on Sogaz and Gazprom, Usmanov reportedly tried to partner up with Sberbank, but those negotiations collapsed, not unlike Sberbank’s failed purchase of a major stake in Yandex in 2018.
“For the first time in the Russian Internet market’s history, a genuinely powerful player controlled completely by the state has emerged,” The Bell concludes.
