Chaebols or Zaibatsu? How industry-specific family holding companies are created and what they look like in Russia's wartime economy
In the Russian economy, the formation of sectoral family-owned holdings continues apace, facilitated by the withdrawal of certain Russian and foreign investors from the market, as well as the Prosecutor General’s active campaign of asset nationalisation.
Beginning with the purchase of VK from Alisher Usmanov in December 2021, structures reportedly linked to Yuri Kovalchuk, a close friend and long-time business associate of Vladimir Putin, are believed to be acquiring blocking stakes in companies covering nearly two-thirds of Russia’s e-commerce market and platforms that account for half of the ten most-visited sites in the Russian-language internet (Runet).
In addition, at least two sectoral family holdings are likely to emerge in agribusiness and the chemical industry. The first is currently associated with the Patrushev family, the second with the family of Arkady Rotenberg. The Prosecutor’s Office is methodically deprivatising key enterprises in these sectors, which are then absorbed by the 'Roshim' holding or come under the control of Rosselkhozbank.
Putin’s model of oligarchic corporations closely tied to state power is often compared to South Korea’s chaebols. However, such a comparison is fundamentally inaccurate. The defining feature of the chaebols was their focus on exports and competition in global markets.
The sectoral family holdings we are likely witnessing today represent a new form of oligarchy that more closely resembles the zaibatsu – family-run conglomerates that played a pivotal role in Japan’s war-oriented industrialisation from the late 19th century until the end of the Second World War. By controlling a significant portion of industry and the domestic market, the zaibatsu bloc also served as a guarantor of political continuity.
Spoils of war: how and who is creating mega-holdings in the Russian internet
Under wartime conditions, Russia’s internet platforms and e-commerce sector are undergoing a quiet yet profound redistribution of ownership. Major assets, according to market insiders and several media outlets, are being consolidated under the control of billionaire Yuri Kovalchuk, a member of the well-known 'Ozero' cooperative and a long-standing associate of Vladimir Putin since the early 1990s. Kovalchuk is also the largest shareholder in Bank Rossiya and the National Media Group.
Kovalchuk's structures, which are believed to already exert de facto control over VK and, according to The Bell and Forbes, also own a stake in Yandex, now appear poised to acquire a blocking stake in the marketplace Ozon. In late April, RBC reported that the 'Vostok Investments' fund (formerly Baring Vostok, founded by American investor Michael Calvey) sold its 27.7% stake in Ozon in 2024 to a previously unknown entity named 'O23'. The Bell's sources claim Kovalchuk is behind the acquisition. Notably, the asset was acquired at a price roughly five times below market value, for 38.2 billion roubles. In early 2025, Russian Forbes valued Ozon at $8 billion (709 billion roubles at the time’s exchange rate), and its current market capitalisation on the Moscow Exchange stands at around 740 billion roubles. This means the 'Vostok Investments' stake should be worth roughly 200 billion roubles. Such a steep discount, however, is not difficult to explain. Calvey was convicted in Russia in a controversial case and, following a sudden reversal of the verdict, left the country. His exit from Russian assets after the war began could not have happened without official approval. According to The Bell, the transaction was overseen by First Deputy Head of the Presidential Administration Sergey Kiriyenko, whose son, Vladimir Kiriyenko, has headed VK since late 2021.
According to the same source, Kovalchuk’s next targets may include Ozon’s main competitor, Wildberries, the leader of Russia’s online retail market, currently embroiled in a corporate conflict, as well as Avito. Kommersant previously reported that VK had pursued the acquisition of the classified ads service as early as late 2022. However, the buyer turned out to be businessman Ivan Tavrin, who subsequently transferred 50% of Avito’s shares to state-owned Rosselkhozbank. The Bell’s sources believe the bank is merely a temporary custodian of the shares.
In 2024, Wildberries held 33% of the e-commerce market, Ozon 24%, and Yandex.Market 7%. Thus, the prospective megaholding or management company allegedly linked to Kovalchuk would control, at a minimum, companies that together account for two-thirds of the online retail market. In addition, insiders believe VK may ultimately acquire the most valuable asset in the Russian video games market – Lesta Games, which broke away from Wargaming (the publisher of World of Tanks) after the war began. At the end of April, the Prosecutor’s Office demanded the transfer of 100% of Lesta to state ownership, citing Wargaming’s public condemnation of the war and its campaign enabling players to buy in-game content, with the proceeds going towards medical evacuation vehicles for Ukraine.
It is worth noting that the first step in creating the megaholding was the somewhat unexpected sale of VK by Alisher Usmanov’s structures to Gazprombank and Sogaz in December 2021, just ahead of the war. By that time, Yuri Kovalchuk’s son Stepan had already been appointed Deputy CEO of VK, and following the ownership change, the CEO position was assumed by Vladimir Kiriyenko, son of Sergey Kiriyenko. This management and ownership reshuffle marked the company’s definitive move 'closer to the Kremlin' in every sense.
However, the subsequent rapid expansion of the presumed megaholding was driven mainly by the war-related exit of both Russian (e.g. Arkady Volozh) and foreign shareholders from internet companies. As a result, the mega-holding will become at least a controlling shareholder of the most expensive companies on the Russian Internet, according to Forbes.
The top four on the list are: Yandex ($16.4 billion), Ozon ($8 billion), Wildberries ($6.6 billion), and Avito ($4.6 billion); Lesta Games ($1.5 billion) ranks tenth. A similarly impressive picture emerges in terms of audience reach. According to Mediascope, the top ten include VKontakte (which had a monthly reach in April of 93.8 million users), Yandex Search (85.1 million), Wildberries (78.4 million), Ozon (78.2 million), and VK-owned service Zen (76.8 million). Outside the megaholding’s influence remain WhatsApp, Google, YouTube, Telegram, and Sber. The resulting mega-monster constitutes a near-perfect structure of absolute market dominance, simultaneously fulfilling functions of ideological and informational control.
A family affair: the military reshuffle continues unabated
The alleged megaholding and the means of its formation reflect a key trend in the evolving political economy of Putin’s Russia during wartime, the rupture with Western markets, and the tightening of authoritarian control.
As previously noted, the campaign of nationalisation and subsequent redistribution of assets, which has intensified over the past three years, pursues several aims, among which is the creation of sectoral megaholdings controlled by the families of Putin’s closest friends and allies (→ Re:Russia: Military redistribution).
There is clear evidence of law enforcement activity favouring the formation of an agricultural megaholding linked to the Patrushev family. Under the control of Rosselkhozbank, which Patrushev initially headed and now oversees as Deputy Prime Minister, have passed 'Makfa', the largest producer of pasta, flour, and grains, and 'Ariant', one of Russia’s leading wine producers. Under Patrushev’s tenure as minister, several of the country’s largest grain exporters have also been nationalised (→ Re:Russia: New Oil for The New Patrushev). According to Novaya Gazeta Europe, the Patrushev family may also be behind the recent high-profile attack on billionaire Vadim Moshkovich, who now appears likely to lose both his freedom and his company, Rusagro, one of Russia’s largest agribusinesses. Sources claim that Moshkovich’s real offence was his intention to establish an independent grain trading firm (as reported by Kommersant) – a market that the Patrushevs reportedly aim to dominate.
The Moshkovich case lacks the motives of ‘foreign ownership’ and ‘illegal privatisation’ of the 1990s, which are common in the current nationalisation campaign. When such allegations cannot be made, or when the 'target' appears too powerful and uncooperative, prosecutors resort to charges of fraud and/or bribery. This significantly worsens the owner's position, as deprivatisation under such pretences almost certainly entails imprisonment. The Moshkovich case also demonstrates that Prosecutor General Igor Krasnov has a very high-level carte blanche, and that previously reliable 'roofs' (protective political patronage) that safeguarded business interests before the war are now powerless in the new reality.
Another family-sectoral holding being assembled with help from the Prosecutor General’s Office is 'Roshim' (formerly 'Russian Hydrogen'), which media reports link to Arkady Rotenberg, another long-time friend of Putin from his St. Petersburg days. According to our estimates, 'Roshim' has received more assets than any other entity during the nationalisation campaign – five enterprises in total (→ Re: Russia: Military Redistribution). The Bashkir Soda Company and the Kuchuksulfat plant, which formally came under 'Roshim'’s control in 2023, had already been nationalised in 2021. Perm’s 'Metafrax' (Russia’s largest methanol producer), 'Dalnegorsky GOK' (the only Russian producer of boric acid), and 'Volzhsky Orgsintez' (a key producer of aniline, methionine, flotation reagents, and carbon disulphide) were nationalised in 2023 and transferred to 'Roshim' in 2024.
As with the Patrushevs’ agribusiness, the injection of assets into 'Roshim' continues intensively. Judging by recent developments, it is expected to expand further along the same pattern. At several Bashkir enterprises, whose shares were seized from former Gazprom energy division executive Alexey Mityushov and transferred to the state, new management has been installed. The company that manages these assets, 'Neftekhimremstroy', is now headed by Eduard Davydov, the CEO of 'Roshim', as noted by Interfax.
Finally, another enterprise that 'Roskhim' may soon absorb is the recently nationalised 'Sayanskkhimplast', one of Russia’s largest producers of PVC. Its assets are valued at 78.8 billion roubles, with annual revenue of 25 billion and gross profit of 7.2 billion. In order to seize the enterprise from Viktor Kruglov, former head of the Irkutsk Regional Legislative Assembly, the Prosecutor’s Office is employing a two-stage scheme we have described before. This challenges the legality of the 1990s privatisation, along with accusations of foreign citizenship or residency. The former accusation serves a largely political and propagandistic role — it is intended to strip the target of their image as a lawful owner; the latter is used in court to obtain a ruling on unconditional and uncompensated nationalisation.
Chaebols or zaibatsu? Three models of private-public oligarchy
The new form of financial-industrial oligarchy underpinning Putin’s regime is often compared to Korean chaebols – South Korean multi-sector conglomerates that maintained special relations with the state and benefited from its support during the early and mid-stages of the country’s economic miracle (see, for example, → Nikolai Petrov: Children, Chaebols and Adjutants).
Recently, Russian authorities and allied economists have begun to lay a certain ideological foundation for this 'chaebolisation' strategy, presenting it as a component of a new economic policy in the context of sanctions. 'When the market was global and credit relatively accessible, industry operated more or less independently, but once truly serious sanctions emerged, there arose a need for financial partners and distribution via trading companies,' mused Deputy Minister of Industry and Trade Vasily Osmakov in an interview with RIA Novosti. ‘So now what’s required is synergy between financial, trading, and industrial capital – chaebolisation in form, though not in origin. And this trend will continue.’ Osmakov suggests that the Russian equivalents of chaebols are state banks with 'large industrial skirts', namely Sberbank, VTB, and Gazprombank. As a positive example of this industrial-financial synergy, Osmakov cites the transfer of 100% of the United Shipbuilding Corporation into a bank’s management. The idea is that in the absence of market financing options, direct financing of the corporation by a bank is more efficient than budgetary support.
This ideology is supported, with caveats, by the head of the Centre for Macroeconomic Analysis and Short-Term Forecasting (CMASF), Dmitry Belousov, brother of the Minister of Defence. The essence of 'chaebolisation,' which he views as 'entirely justified under the specific historical conditions,' lies in the 'formation of an 'institutional framework' for the Russian economy via major companies, with the state ensuring demand for some of their output.' Such a model is indeed visible in the operations of state corporations such as VTB, Rostec, Rosatom, and Sberbank. However, as Belousov himself notes, this kind of symbiosis twice led to the 'parasitism' of business on state resources in Russian economic history, during the 1920s and 1980s. In the late 1980s, this model allowed businesses to profit from arbitrage – receiving resources at planned prices and selling products at market rates.
Still, comparing these forms of state-private cooperation with chaebols is clearly inaccurate. The strategy underpinning South Korean chaebols was built on foreign market expansion, and the state's assistance took the form of providing financial resources on preferential terms to compensate for their weaknesses in international competition. In the Russian version, exporting, i.e. earning foreign currency for the economy, remains the domain of raw materials companies. The state-private hybrid instead emerges at the intersection of the domestic market and state procurement in its various forms.
The family-run sectoral holdings currently taking shape in this new 'wartime' politico-economic cycle bear little resemblance either to Korean chaebols or to the state-private industrial partnerships described by Osmakov and Belousov. Rather, what we are witnessing is the partial monopolisation of established sectors of market demand, which previously functioned quite successfully, in the interests of individuals close to Putin. These megaholdings are likely to hold dominant, though not necessarily monopolistic, positions in their respective markets, retaining the most profitable segments for themselves, including monopolies on exports, and setting the rules for regulating their sectors. In essence, they are intended to become a kind of sector-specific, yet private, 'Gazproms.'
In political terms, this amounts to the creation of a family-oligarchic support base for the regime, whose interests and property rights are directly tied to the question of political succession and intertwined with the regime’s political goals. Rights of family inheritance are here secured only through agreement with political power and its continuity. If one were to seek historical analogues for this kind of family-market oligarchy, it would be more appropriate to compare it to the zaibatsu model, that is the family conglomerates of industrial-era Japan (from the late 19th century to the end of World War II). Unlike the chaebols, which were nurtured by globalisation and the ideology of export expansion, zaibatsu are associated with a self-reliant economic ideology, economic militarisation, and an imperialist, expansionist foreign policy designed to supplement and extend the resource base. To a significant extent, zaibatsu served as guarantors of the continuity of this political course and as pillars of militarised industrialisation. All of this aligns far more closely with the political and economic objectives of 'wartime Putinism.'