Former Finance Minister Aleksei Kudrin, once a leading liberal in President Vladimir Putin’s inner circle, is leaving public service to go into business. He is set to take charge of Yandex, Russia’s leading IT company. The transformation of a senior official into a businessman appears to be one of those common attempts to convert political capital into money. However, for Kudrin, it is also a chance to distance himself from the Kremlin and the war.
- At a closed-doors meeting last week, Kudrin and Putin resolved the fate of top IT Yandex — also known as “Russia’s Google.” This brought an end to the biggest question mark in the Russian IT sector since the start of the war. Founder Arkady Volozh has been attempting to move some of Yandex’s assets abroad, while the company’s directors have sought to preserve the business in Russia.
- In these circumstances, Kudrin was Yandex’s “white knight.” In essence, he took on the role of advocate for the company in the Kremlin. Previously, Aleksandr Voloshin, former head of the presidential administration, fulfilled this function.
- At a secret meeting Thursday night reported by multiple media outlets (there has been no official confirmation that the gathering took place) Kudrin and Putin agreed to split Yandex’s assets. Kudrin also accepted a new role in the company. As a result, Volozh, who owns a 57.7% stake along with the company management, will lose control. In return, he will be allowed to retain some of its most attractive assets and move them to the West. The agreement effectively means that Yandex will be split in two — a Russian half and a foreign half.
- The Russian part, which includes most of the company’s well-established businesses (its search engine, taxi company and food delivery business) comes under control of a new company that will be registered in Russia and led by Kudrin himself. This company has new shareholders, including billionaire Vladimir Potanin.
- Volozh’s Dutch company, Yandex N.V., retains promising high-tech projects in return for giving up the Russian part of the operation. These projects include self-driving vehicles, cloud services and machine learning.
- Kudrin will get a 5% stake in the company that takes over the Russian side of Yandex. This is a reward for coordinating the whole process with Putin.
Kudrin’s long road to Yandex
Kudrin is an interesting character with a complex back story. He got to know Putin while working in Leningrad City Hall in the early 1990s. In 1996-1997 he was among those who eased Putin’s passage to Moscow and a position in President Boris Yeltsin’s administration. In the first 11 years of the Putin era, Kudrin served as Finance Minister where he laid the foundations of financial stability that enabled Russia to survive the 2008 crisis and even cope with some of the economic shocks Russia has experienced during the Ukraine war.
Kudrin had to resign as Finance Minister in the fall of 2011 following a public conflict with then-President Dmitry Medvedev. For the next seven years, Kudrin’s Committee for Civil Initiatives published a series of proposals for liberal reforms, but his most striking moment was his appearance at an opposition street protest in late 2011. However, nothing came of those protests and Kudrin himself steered clear of the radical opposition in order to maintain his connections with Putin and retain a chance of returning to power.
He got that chance in 2018 when he was put in charge of the Audit Chamber, an oversight body with no serious powers but directly subordinate to Putin. That gave Kudrin an excuse for face-to-face meetings with Putin — although it is unclear how close the two truly remain.
When war broke out, Kremlin sources began briefing journalists about how Kudrin had told Putin about the disastrous consequences of invading Ukraine.
Why the world should care
If Russia’s defeat in the war seems likely and Putin starts to seek a successor who can negotiate with the West (or if he is forced into this against his will), Kudrin’s name is sure to be on the short-list. His departure from state service and time in charge of Russia’s biggest IT company will only increase his chances of being called upon if such a moment arrives.