Burger King retains Russian franchisee stake via JV with Putin’s ‘piggy bank’
Burger King retained its stake in its Russian franchisee through Burger King Russia Ltd., a joint venture with VTB Bank, known as Russian President Vladimir Putin’s “piggy bank”, according to leaked documents.
Toronto-based Restaurant Brands International Inc., the parent company of Burger King, owns a 15% stake in the Cypriot joint venture, Burger King Russia, through a Swiss-based unit.
The other partners of the joint venture registered in Cyprus Burger King Russia Ltd. are VTB Bank, a Russian state-owned bank, and Investment Capital Ukraine (ICU), once accused of aiding the hugely corrupt former Ukrainian leader.
ICU owns a 35% stake in Burger King Russia through another company registered in Cyprus.
Another shareholder was a Cypriot company owned by Russian restaurant magnate Alexander Kolobov who runs Burger King’s operations in the country.
Documents leaked to the ICIJ show that the four joint venture shareholders sometimes held their stakes through shell companies in tax havens.
Burger King Russia Ltd. partly owns the Russian franchisee, Burger Rus LLC, over which Toronto-based Restaurant Brands International Inc., the parent company of Burger King, has no control.
Restaurant Brands International Inc. acknowledged the stake in response to questions from the International Consortium of Investigative Journalists (ICJ) and said it was trying to sell the shares, but said it could not be done quickly.
According to Burger King, while it would like to sell the shares immediately, it will take some time to do so due to its joint venture agreement.
Burger King’s rival McDonald’s and other multinational fast-food companies ceased operations in Russia in response to its invasion of Ukraine.
Meanwhile, Burger King ceased operations in Russia in response to its invasion of Ukraine and instead suspended ‘corporate support’ to restaurants while redirecting profits from its 800 Russian outlets to relief efforts. for Ukraine.
In an emailed response to the ICIJ, Restaurant Brands said it asked the master franchisee to suspend the Russian business with immediate effect, but the latter refused. The company added that due to the current franchise structure and agreements, it cannot force the master franchisee to close.