Building giant investigated over Mariupol reconstruction allegations

A report has claimed Knauf was actively engaged in rebuilding the city which was heavily damaged in 2022

Building materials giant Knauf is under investigation following reports on its alleged involvement in the reconstruction of the city of Mariupol, the prosecutor’s office in the German city of Wurzburg told RIA Novosti.

Earlier this month, German outlet ARD claimed that German enterprises, particularly Knauf, were engaged in the rebuilding of the Russian Black Sea coastal city which was heavily damaged during a siege in 2022.

“It’s important to note that there is currently no initial suspicion of a crime required to initiate a pre-investigation check. Rather, it serves to clarify whether such an initial suspicion exists at all,” Tobias Kostuch, a spokesman for the prosecutor’s office told RIA Novosti on Monday.

On the same day, Knauf announced it was exiting Russia in light of the “current developments” without providing a specific reason for the withdrawal.

Knauf, a global leader in plaster production, was one of the Western companies which refused to leave Russia after the Ukraine conflict started in 2022. Last November, Ukraine labeled the firm a “sponsor of war” calling Knauf the “largest German investor in the construction industry in Russia.” The company employs more than 35,000 people around the world and has annual revenue of over $11 billion, according to Forbes.

Read more

German companies helping Russia rebuild Mariupol – media

Its founder Nicholas Knauf, who served as an honorary Russian consul for over two decades, called the Western sanctions on Russia “terrible.” However, he told ARD that he opposes Moscow’s military operation, and that his company complies with EU restrictions, only using its Russian branch to provide goods “exclusively for the Russian market.”

The firm revealed it intends to “transfer the entire business in Russia, including raw material extraction, manufacturing, and sales to local management to preserve the jobs of more than 4,000 employees in the future.”

The move is pending approval by Russian authorities, who have already been informed of the plans, according to deputy Trade and Industry Minister Viktor Evtukhov. Commenting on the firm’s decision to “transfer” its assets the minister referred to this word as “not appropriate.”

“If for some reason a company leaves the jurisdiction of the Russian Federation, then a sale takes place. Another thing is that you can sell an asset for any price, but not more than 50% of its market value,” Evtukhov said.

Under existing laws, firms leaving Russia are obligated to sell their Russian assets at a 50% discount and pay a mandatory contribution to the Russian budget, amounting to at least 10% of half the market value of the company’s assets in the country.