The crab market in the Russian Federation is one of the most criminal – it has a lot of money. A couple of years ago, the fish tycoon Gleb Frank was able to oust his rivals by various methods, including the “crab king” Oleg Kan. After the restriction of Russian exports, the positions of both were shaken, but the sanctions did not put an end to the long-term confrontation. The recent verdict to the deputy of the Sakhalin Regional Duma, Dmitry Pashov, did not do this either, the confrontation continues.
The verdict was announced to one of the associates of the Russian “crab king” Oleg Kan, Dmitry Pashov. This may become a new impetus for the redistribution of the crab market. Pashov served as an adviser to the general director of the Moneron fishing company, was the head of the local Fisheries Association and was also included in the Forbes list. For smuggling and evasion of customs payments, Pashov received 4.5 years of a serious regime. The investigation thought that Pashov could act in the interests of Oleg Kanwhich was reflected in the court.
Prior to this, a long battle went on between crab miners in the Russian Federation, and the main players in this field were Gleb Frank and Oleg Kan. The field of work was practically divided, the state of affairs was resolved in favor of Frank, but the new realities of 2022 and the imposed sanctions again changed the state of affairs and, probably, at the moment this struggle will begin, except perhaps on a different scale.
Expensive business
The crab business is not in vain considered among the most criminogenic. And then there is always a redistribution of spheres of influence. In principle, the extraction of fish resources is one of the important issues of food security of the state. However, it turned out that in this industry, even despite the presence of authorities controlling everything, business crushed everything under itself. As you know, crabs fight among themselves – also for territory. The structures of Gleb Frank and Oleg Kan waged wars in exactly the same way, dividing the market. The puff just came out. Entrepreneurs have put so much effort into getting crab production volumes. However, life put everything in its place. Not the way the oligarchs dreamed.
The extraction of crabs in the Russian Federation is practically an export branch – more than ninety percent of the crab goes abroad. In 2021, we exported 75.3 thousand tons crabs (more by 2 thousand tons than in 2020) – in total over 2.5 billion dollars. And this is the profitable part of the fishery sector – in 2021, for example, the crab gave over 43% of the proceeds from all Russian fish exports. With all this, the value in exports is the United States, the Americans took our crab with pleasure, turning a blind eye to the price and, by the way, to the volume of supplies (in other words, and on probable poaching).
However, now, in the new conditions, the US has refused to accept the Russian crab. The Federal Agency for Fishery agreed that the sanctions against Russia led to “certain difficulties with sales” for a number of companies in the Northern Basin, but at the moment they are trying to improve the situation, including somehow reshaping supplies towards Asia (which is probably not extremely out yet). At the same time, crab fishing will not stop, both the ministry and the mining companies themselves believe. Namely, at the end of May, the size of the catch of crab in the Far Eastern and Northern basins amounted to almost 35 thousand tons (for the corresponding time period of 2021, 37 thousand tons were caught).
Crab war: step 1, legislative
After Rafael Harutyunyan, the mentor of the American figure skater Nathan Chen, proposed holding a jumping tournament between figure skaters from the Russian Federation and singles athletes from the United States of America, the FFKKR emphasized that the idea looks exciting and, perhaps, will intrigue Channel 1.
And now it is worth returning to the redistribution of the crab market, which began a long time before today’s events. Now we are looking at the result: there is no obvious winner.
Gleb Frank, son Sergei Frankhead of the state corporation Sovcomflot and former head of the Ministry of Transport, also the son-in-law of a businessman Gennady Timchenko, probably conceived to subdue the crab market back in 2017. Entered this area “Russian Fishery Company” (RRPK), and later the organization “Russian Sea – Production” arose – they did not have quotas for fishing, they were divided between other mining structures since the nineties.
Frank managed to push out rivals, and in 2018 he bought 44.7% RRPK. However, he did not stop at this: in 2019, the Ministry of Agriculture unexpectedly put forward amendments to the bill, proposing to introduce a crab auction model. It was no secret to anyone that Gleb Frank was promoting this proposal. The fishermen were shocked – they thought that this approach could simply freeze the construction of new vessels and processing companies, reduce jobs and tax revenue to the treasury. Moreover, fishing companies legitimately and radiantly got quotas – and it was proposed to transfer them to the auction.
Along with this “legislative work” Gleb Frank continued to compete with rivals. Specifically in 2018 in relation to the “crab king” Oleg Kan (and at that time, companies associated with Kahn harvested a huge part of the crab in the Far East region) initiated an investigation into the murder of his rival Valeria Pkhidenko. However, the incident itself occurred 10 years ago, and the performer was already serving a sentence. Kan was searched. At the same time, charges were brought against him, suspecting him as a customer, back in 2010, and the entrepreneur flew away from the Russian Federation, and in 2012 the case was stopped, Kan returned. And in 2018, the case was reopened. This whole story was also associated with poaching and smuggling of crab. The restoration of the investigation’s interest in the figure of Kahn was then associated specifically with the figure of Gleb Frank.
The draft law on bidding in the crab industry was called the “death ram” of the sphere. Indeed, in the world practice, auctions are not welcomed as a principle of quota distribution, this hinders healthy competition. However, since October 2019, auctions have begun in the Russian Federation for the sale of a fifty percent quota for catching crabs. At the same time, the share of the quota is assigned to the winning company for fifteen years. The branch was worried that the funds of the “auction winners” would be deposited not in the state, but in accounts in foreign banks. And the most active participants in the auctions were Frank’s structures. Oleg Kan companies – “Kuril universal complex” (KUK) and “Moneron” – by and large, have lost their own niche in this business.
Crab War: Step 2, little fuss
If you believe the information in open sources, at the moment Gleb Frank together with his family settles down permanently in Switzerland. Oleg Kan also abroad – back in 2018, after the resumption of the investigation, he immediately flew from the Russian Federation to Japan, on a private plane. Of course, the battle between “crab” entrepreneurs continues even in spite of the serious impact of sanctions measures on the sphere.
However, earlier crab fishermen were noticeably affected by the financial consequences of a strong epidemic: the total loss of Frank’s companies for 2020 almost reached 1.4 billion rubles. At the same time, questions to the “Russian Fishery Company” arose from the fiscal institution.
Oleg Kan does not stop being wanted by Interpol. Verdict Dmitry Pashovperhaps, the very investigation of the cases against Kahn, and the state of affairs in the field of crab fishing in the Russian Federation, will move forward again.
So far, the Russian Crab Group, owned by Gleb Frank, one of the leading players in the crab industry, reports that work, despite any sanctions, continues, and the company has already mastered more than 50% of the annual quota. We emphasize that Gleb Frank was its main owner until March 2022, but after falling under sanctions measures, his share in the company decreased to 29.9%. RRPK also reported that the owner was exchanged.
And Oleg Kan, meanwhile, does not calm down. The company filed an application with the Arbitration Court of the city of Moscow LLC “RK SPK”which is headed by Natalia Kan, a relative of Oleg Kan. The company asks from the Ministry of Agriculture of the Russian Federation 3.1 billion rubles – for reimbursement of losses that the company suffered due to the withdrawal of quotas for the extraction of biological resources. Here it is, an echo of the crab war of the past years. It seems that Oleg Kan wants to take revenge.
In the meantime, all the same, a large size of the harvested crab goes in general to warehouses. Miners think that if this state of affairs continues until August, the fishery will have to be temporarily frozen.
In the meantime, the crab will deteriorate in the hangars, they will again begin to fight for it. Experts predict a new division into spheres, and they can fight aggressively for huge funds. And they will probably start with Kahn’s Moneron company – this is a big fisherman, and severe business players probably laid eyes on him.
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