Phoenix 24
Corporate ownership becomes another front in geopolitical confrontation.
Paris, France.
France has formally called on Russia to reverse its decision to place several European-owned businesses under temporary administration, escalating a commercial dispute involving major international corporations. The French Ministry for Europe and Foreign Affairs condemned Moscow’s intervention on September 19 and confirmed that it remains in contact with the affected companies. The measure targets businesses including Swiss food manufacturer Nestlé, French retailer Auchan and operations associated with the former Leroy Merlin network. The confrontation introduces additional uncertainty for European investors whose assets remain exposed to Russian government intervention.
The dispute follows a presidential decree signed by Vladimir Putin transferring management authority over 16 Russian companies to L.E.V. Management, a little-known domestic firm. The affected businesses include Nestlé’s Russian subsidiaries, Auchan, two local entities belonging to FM Logistic and Le Monlid, which operates the former Leroy Merlin stores under the Lemana Pro brand. French authorities have demanded that Moscow reconsider the decision, emphasizing the consequences for companies that continue operating in the country. The Russian government maintains that the intervention is justified by geopolitical circumstances.
Kremlin spokesperson Dmitry Peskov defended the measure by referring to countries Russia classifies as unfriendly because of their actions following the invasion of Ukraine. Moscow considers Western sanctions and military support for Kyiv relevant factors in its treatment of foreign corporate assets. This justification reflects the Kremlin’s stated position and does not establish that the affected companies themselves participated in military operations. The distinction matters because private businesses are now facing consequences associated with disputes between governments.
The corporate implications are considerable. Auchan’s Russian operations include more than 33,000 employees across 241 stores, while Nestlé maintains manufacturing facilities and a substantial workforce in the country. Auchan’s local management has requested clarification from Russian authorities, and Nestlé has acknowledged the decision while examining its implications. For employees, suppliers and customers, uncertainty over management authority creates operational risks even when commercial activities continue.
Temporary administration does not automatically constitute formal nationalization. Under the Russian mechanism, ownership can remain legally unchanged while an appointed administrator exercises effective control over business operations. However, previous interventions affecting Western companies have preceded forced sales or transfers to Russian buyers. Analysts at investment bank Jefferies have warned that similar measures can become preliminary stages toward expropriation.
The latest confrontation exposes a structural risk associated with international investment during prolonged geopolitical conflict. Companies that remain in Russia face potential intervention, while those seeking to leave have encountered restrictive exit conditions and financial losses. Governments defending their corporations must navigate the intersection of property rights, economic sanctions and diplomatic relations.
France’s demand establishes a clear diplomatic position, but Moscow has not announced a reversal. The immediate question concerns whether temporary management will remain an administrative intervention or develop into permanent changes in corporate ownership.
The broader consequences extend beyond the affected businesses, raising questions about the security of foreign investment when commercial assets become instruments of international confrontation.
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