Businessman Who Prefers Monitoring

Businessman Who Prefers Monitoring
Maxim Protasov, the head of Russian quality control system Roskachestvo, apparently imports his goods hiding behind Russian names and runs his key businesses, TomatoProm and Russalt, from Cyprus. Is it possible for a businessman of this kind to develop the Russian agricultural industry and monitor the quality of products?

Recently, Roskachestvo has reported that Protasov, the head of agency, signed an agreement on cooperation with Rashid Temrezov, the head of The Karachay-Cherkess Republic. Allegedly they are planning to establish companies for the assessment of product quality, quality improvement and safety on the foodstuff and non-food markets.

Of course, it is very commendable that Protasov who founded Roskachestvo in 2015 to control the quality of food in supermarkets, stands for high standards of Russian products. The real question is to what extent Mr. Protasov himself follows these principles.

According to media sources, Protasov, the owner of the company TomatoProm, a supplier of canned vegetables, claims that it is necessary to develop production in Russia. Meanwhile, cucumbers for his company are exported from abroad and are of questionable quality. It turns out that canned food of different brands produced by TomatoProm receives low marks from Roskachestvo.

In fact, Protasov is filling Russia with canned vegetables of poor quality from India and Asia. This company poses a real threat to Russian agriculture, as it puts up competition to local industry instead of developing it.

It would seem Protasov does not pay attention to this. He runs his business in a pushy manner as if it were still the in the raucous 1990’s. This is not a surprise – it is a matter of habit; after all, Protasov started running his business in the 90s. At first, like many of the nouveaux riches of those years, he ran a video parlor.

After that (together with Alexey Sharonov, who would later become a member of the Federal Securities Market Commission) he established the Vega voucher investment fund and traded shares of aluminum companies (notably, Andrey Melnichenko and Oleg Deripaska were among lucky buyers). It was then that the Panorama securities company was created. In 2003, Panorama merged with Roman Abramovich's Fund Registration Company – and this is how the company Registrator R.O.S.T. was founded; but by that time Protasov was already interested in tomatoes.

He purchased the holding company TomatoProm and decided that he would fill the market with canned vegetables. In fact, he promised to do so, and this promise has been accomplished.

In 2014, TomatoProm also collaborated with Luitk in order to outshine its main competitor, Bonduelle.

At the same time, Protasov carried out another business as well. After gaining a controlling stake in the Astrakhan-based company Bassol in 2008, he merged with Orenburg company Iletsksalt creating the company Russalt.

However, Protasov makes money in Russia with the help of overseas opportunities. His canned goods (in particular, under the brand name Ogorodnikov) are produced in other countries. It turns out that Protasov promotes the quality of Russian goods and the development of Russian agriculture, but apparently supports Chinese and Indian farmers rather than their Russian counterparts. The head of Roskachestvo doesn't seem to care much about the fate of the Russian farming sector.

Could it be this way because Maxim Protasov keeps his money in another "basket"? For example, the company TomatoProm turns out to be affiliated with some PP A LLC, and that company is owned by the Cyprus Pomidorprom holdings LTD. Russalt is also managed by Russalt Limited, a Cypriot company. Both Tomadorprom and Russalt belong to R-Holding Group owned by Protasov. In addition, Lutik Group which TomatoProm merged with in 2014, was formerly called Eurovision LLC and was registered in the U.S. in 1994.

At the same time, Russian President Vladimir Putin said earlier that it is necessary to stop draining finances from the Russian economy into offshore accounts: "Shadow schemes and withdrawal of assets into offshore areas and concealing the owners of shares are unacceptable." Many large businessmen have listened to Putin's words. In December 2014, Alisher Usmanov's USM Holdings announced that the reorganization of its core businesses and transfer of its key assets -- MegaFon and Metalloinvest -- to Russian holding companies was over. 

Roman Abramovich, Mikhail Prokhorov and Gennady Timchenko did the same to their business assets, transferring them from offshores to Russian jurisdiction. It would seem Protasov is above the law. Maybe, Cyprus tax havens are helpful in terms of tax evasion?

Today, Protasov pursues the same aggressive policy in Roskachestvo. In 2015 (after becoming the head of watchdog agency,) Protasov reduced his shareholdings and transferred them to the management (according to his representatives). However, Protasov's success at TomatoProm is still of concern. Besides, he has drawn his team -- and his technologies -- to Roskachestvo. 

Experts note that the strength of the MMM financial pyramid, the rise and fall of which occurred in the first half of the 1990’s, still exists in the minds of quirky businessmen. Financial pyramids continue thriving, and in 2019, the Central Bank of Russia identified almost 240 of them – the finding that marked their maximum for the past five years. Fraudulent grey schemes, aggressive and practically raidership policy in business are all popular. There are businessmen who have not even taken off their "crimson jackets," so popular of definite groups of people at the time, and some of the young ones are trying them on again. It seems that Protasov also likes this tomato-like color. 

Ultimately this begs the question: is it possible for a businessman who purchases products under Russian names from abroad without ensuring their quality and who keeps his millions offshore, to be seriously concerned about the quality of Russian goods and the foodstuffs that come to the kitchen of the Russian people? Can Roskachestvo, an organization which is mandated to honestly and impartially monitor the quality of goods, be led by a businessman with such double standards?