Tokyo, Nov. 12 (Jiji Press)–A senior Russian official has tried to justify the government’s decision to place Japan Tobacco Inc.’s assets in Russia under the temporary management of a Russian company. At a press conference on Wednesday, Russian Foreign Ministry spokeswoman Maria Zakharova said that the measure is a response to what she described as Japan’s explicit hostile action, referring to its economic sanctions against Russia over its invasion of Ukraine. Zakharova explained that the measure is designed to minimize economic losses from unfair and unilateral restrictions and to reciprocate Japan’s sanctions. Last week, Russian President Vladimir Putin signed two executive orders to place Japan Tobacco’s all seven Russian units under temporary control, effectively stripping the Japanese company of its management rights. The Japanese government is the top shareholder of Japan Tobacco, owning over a third of the company. A possible decline in dividend payments following the Russian move could impact Japan’s finances. According to an independent Russian media outlet, the local firm that controls Japan Tobacco’s assets was just registered in Moscow in September. A former official of Russia’s Federal Security Service is believed to have been involved in the establishment of the local firm. In 1999, Japan Tobacco entered into the Russian market, where smoking is widespread. It now holds the top market share of some 40 pct in the country. The Russian market is a major revenue source for Japan Tobacco, accounting for about 25 pct of the group’s adjusted operating profits. In response to Russia’s invasion of Ukraine beginning in 2022, Japan Tobacco suspended new investments while continuing its existing operations. END [Copyright The Jiji Press, Ltd.]
