Why the boss of a Russian defence manufacturing facility set fireplace to himself on Pink Sq.

[ad_1] Russia’s authorities threatens defence producers with jail time in the event that they don’t meet contractual obligations Vladimir Arsenyev says his agency needed to ramp up manufacturing at breakneck pace, ship to tight deadlines set by defence ministry At the least 34 folks have confronted prison costs for disrupting Russian defence orders since begin of Ukraine conflict Rostec denies any assertions of Russian defence trade degradation, calls them propaganda myths NEW YORK, Dec 23 (Reuters) - Russia’s full-scale invasion of Ukraine opened a possible goldmine for Vladimir Arsenyev.

The 75-year-old scientist heads a Moscow agency that makes elements for a communications machine utilized by tank crews.

Join <a data-testid="Link" referrerpolicy="no-referrer-when-downgrade" href="https://www.reuters.com/world/europe/why-boss-russian-defence-factory-set-fire-himself-red-square-2025-12-23/undefined?location=article-paragraph&redirectUrl=%2Fworld%2Feurope%2Fwhy-boss-russian-defence-factory-set-fire-himself-red-square-2025-12-23%2F" class="text-module__text__0GDob text-module__inherit-color__PhuPF text-module__inherit-font__1P1hv text-module__inherit-size__EyiQW link-module__link__INqxZ link-module__underline_default__-okuC">here.

As Russian tanks rumbled by means of Ukraine in 2022, his enterprise was awash with defence orders.

However the orders he landed turned out to be a poisoned chalice, he recounted in a sequence of interviews with Reuters, the primary time he has spoken publicly about his struggles. He needed to ramp up manufacturing at breakneck pace and ship to tight deadlines at costs set by the Russian defence ministry.

Failure was no choice. Invoking the spectre of Soviet dictator Josef Stalin, Russia’s authorities has threatened defence producers with jail time in the event that they don’t meet contractual obligations.

By spring 2023, Arsenyev’s manufacturing facility was delayed on manufacturing, and senior executives had been feuding, interviews with two key gamers and courtroom paperwork present.

Sergei Mosiyenko, a minority shareholder, stated he may see the corporate was going to overlook deadlines, so he blew the whistle. “The defence ministry is the shopper,” he informed Reuters. “They're at all times proper.”

Officers Arsenyev turned to for assist ignored him, the manufacturing facility boss stated.

With the corporate edging towards chapter, Arsenyev walked into Moscow’s Pink Sq. on July 26, 2024. Exterior the Kremlin, close to the mausoleum of Soviet state founder Vladimir Lenin, he poured gasoline over his physique and set himself alight.

He spent weeks in hospital with extreme burns, he stated.

Talking to Reuters from the hospital, Arsenyev disputed that the contracts had been in bother, saying individuals who had been making an attempt to undermine him had despatched unfounded complaints to the authorities.

“How is it that an organization that's getting rising orders and fulfils these orders is dying?” he requested. “That most likely means there’s an issue.”

The Kremlin and Russia’s defence ministry didn't reply to detailed questions on Arsenyev’s case or their dealing with of defence contracts extra broadly.

DEFENCE INDUSTRY UNDER PRESSURE The difficulties at Arsenyev’s agency, Volna Central Scientific Analysis Institute, lay naked the pressures on Russian defence corporations, which have confronted years of calls for to ramp up manufacturing.

Arsenyev’s struggles will not be distinctive, a Reuters evaluation of Moscow courtroom rulings discovered.

At the least 34 folks have confronted prison costs for disrupting state defence orders for the reason that begin of the Ukraine conflict, in response to paperwork posted on the Moscow courts of common jurisdiction web site. They embrace a minimum of 11 firm bosses and two senior executives.

Since Russian President Vladimir Putin ordered troops into Ukraine in February 2022, the nation’s producers have elevated output of artillery shells, missiles, tanks and drones, outstripping what Kyiv can produce or source from Western allies . However the sector can also be affected by inefficiency and corruption, leading to spiralling prices, manufacturing delays and unmet quotas, in response to Mathieu Boulegue, consulting fellow at London’s Chatham Home assume tank, and quite a lot of different Western safety analysts. The Kremlin’s response – centralising selections with the defence ministry and state defence conglomerate Rostec, and imposing inflexible guidelines on contractors – is hurting the power of corporations to innovate and modernise, Boulegue informed Reuters.

This doubtless gained’t have an effect on Russia’s skill to stay a risk to Ukraine and the West within the brief time period, Boulegue wrote in a July paper, however it “will make it tougher for Russia to maintain competitors with its adversaries”.

Responding to questions from Reuters, Rostec dismissed as “propaganda myths” any assertions by the information company associated to a “degradation” of the Russian defence trade.

“Every part is okay with the Russian defence trade,” Rostec stated in a press release on its Telegram account. “Our Western colleagues can solely dream of the speed of progress that Rostec is displaying.”

In the end, the navy didn't obtain the communication units it wanted on time, in response to the agency that assembles them, Luch Manufacturing unit, which is co-owned by means of a series of corporations by Rostec.

That was partially as a result of Arsenyev’s agency didn't provide elements when it was speculated to, Luch stated in its 2023 annual report, an accusation Arsenyev denies. It was not clear from the report how huge the orders had been or how lengthy they had been delayed. Luch’s director, Andrei Pestryaev, declined to supply particulars.

A dispute with the federal government over the value of Volna’s elements left the agency in need of funds, Arsenyev stated.

Its accounts had been then frozen for failing to pay taxes, in response to Arsenyev and SPARK, a database created by Russia’s Interfax information company that aggregates data from company and state information. Wages went unpaid, resulting in lawsuits.

“We instantly discovered ourselves near chapter,” Arsenyev stated.

Bailiffs referred to as in to get better money owed in September 2024 had been unable to seek out property they may seize, their web site reveals.

To fulfill the navy’s wants, Luch needed to design and produce its personal model of Volna’s elements, Pestryaev informed Reuters.

As of January, there was a deficit of Luch’s units, a navy gear dealer who provides them to front-line Russian items stated on situation of anonymity. Reuters couldn't decide if that was nonetheless the case. Pestryaev declined to remark.

Rostec didn't reply questions concerning the case or the dealing with of defence contracts. The navy additionally didn't remark.

INVOKING STALIN The tone of how the Kremlin offers with producers was set by Dmitry Medvedev, a former Russian president who deputises for Putin as chair of the Navy-Industrial Fee, the physique overseeing the defence trade.

At a March 2023 assembly with trade leaders, he learn out a World Struggle Two telegram from Stalin stating a producer that did not ship weapons on time could be “smashed like criminals”.

“Colleagues, I need you to listen to what I’m saying and bear in mind the phrases of the generalissimo,” Medvedev informed the room filled with managers, in response to a video posted on his Telegram account.

Medvedev didn't reply to questions on his remarks despatched by way of the Kremlin.

Underpinning Medvedev’s risk is a 2017 regulation making it a prison offence - punishable by as much as 10 years in jail - to hurt a defence contract in pursuit of non-public achieve. Only one prosecution was recorded on the Moscow courts web site earlier than the conflict began.

In September 2022, the regulation was amended to widen the listing of missteps that may be prosecuted. It now contains refusal to signal a defence contract or incapability to fulfil one, with out, in sure circumstances, having to show defendants had been in search of private achieve.

The next January, Putin urged state prosecutors to “strengthen scrutiny” of the well timed fulfilment of defence orders.

At the least 5 of the 35 defendants recognized by Reuters had been sentenced to jail phrases of as much as six years, and 15 others had been detained pending trial.

They embrace Sergei Kryuchkov, ex-boss of a Russian development firm that was awarded contracts to construct a logistics centre for the Federal Company for State Reserves (Rosrezerv), which manages strategic reserves of meals, gas and gear for deployment throughout wars and nationwide emergencies.

His lawyer informed a Moscow courtroom in January 2024 that restrictions on his liberty had been “creating severe issues” for the agency’s skill to fulfil 12 defence contracts, courtroom paperwork present.

Kryuchkov was positioned underneath home arrest in August 2023 and sentenced in July to 5 and a half years in jail on costs of getting harmed defence contracts through the use of cash superior to his firm to lease autos not talked about within the agreements, the information present. They embrace a minimum of three BMW sports activities utility autos.

Kryuchkov argued the vehicles had been for work functions and stated his agency, GES-Montazh, was assembly its contractual obligations. He appealed in opposition to his conviction, however the final result is classed.

The paperwork don't disclose why he was dismissed final yr. His lawyer and GES-Montazh didn't reply to questions concerning the case. Neither did Rosrezerv or the prosecutor-general’s workplace.

Putin’s former ombudsman for enterprise, Boris Titov, was reported by Russia’s RBC newspaper in April 2023 to have requested that directions be issued to prosecutors to “train explicit vigilance” when making use of the regulation, saying a good portion of instances had been for missed deadlines, which might be unavoidable.

The ombudsman’s workplace informed Reuters such steering was subsequently issued by the prosecutor-general’s workplace, and since then, it has stopped receiving complaints concerning the regulation. The prosecutor-general’s workplace didn't remark.

HELMET RADIOS A number of months into Russia’s invasion, its tank crews confronted a scarcity of radio units, in response to Andrei Morozov, a Russian soldier in jap Ukraine.

“They’ve run out. There’s no re-supply,” Morozov wrote in an August 2022 weblog submit.

On the time, Ukrainian forces had been destroying many Russian tanks , which had to get replaced together with gear just like the radios crews use to speak. Morozov dedicated suicide in February 2024, in response to a Russian lawmaker citing correspondence he stated he acquired from the defence ministry. A suicide word revealed on his weblog stated his unit was struggling gear shortages, which Reuters was unable to independently verify. The navy and defence ministry didn't remark.

The communication techniques Morozov wrote about join headsets and microphones constructed into troopers’ helmets to a tank’s hi fi by way of a switching machine. Volna was then the one agency making electronics modules for the switching units, in response to courtroom information associated to its disputes with Luch and paperwork posted on the Russian state procurement web site.

Earlier than the Ukraine conflict, Volna produced not more than 5,000 modules per yr, the courtroom information present. However after Russia’s invasion, many extra had been wanted. In September 2022, Volna signed contracts to ship greater than 50,000 modules to Luch over the next yr.

Rising manufacturing tenfold was an enormous endeavor, the paperwork present. The corporate needed to rent workers and revamp manufacturing processes.

Volna acquired advances price about 80% of some contracts, the information present. However by April 2023, Volna had fallen behind on its manufacturing plan, in response to paperwork associated to a separate dispute between the corporate and its chief engineer on the time, Andrei Buchinsky.

An unidentified particular person at Volna reprimanded Buchinsky for being late with an amended plan, which he argued in a lawsuit was unjustified. The courtroom sided with Volna, saying Buchinsky supplied a plan on time however didn't submit it within the requested format. Buchinsky declined to touch upon the ruling.

Between March and Might 2023, Mosiyenko, the minority shareholder, wrote letters to Rostec and the Federal Safety Service (FSB), successor to the Soviet KGB, saying the contracts had been in bother.

“As a shareholder, I can not do nothing,” Mosiyenko informed Reuters. “In any other case, I will likely be held criminally accountable.”

Mosiyenko’s complaints triggered investigations. He confirmed Reuters an extract from a letter he stated he acquired from the defence ministry saying navy prosecutors had been wanting into alleged irregularities with fulfiling the contracts. He didn't share the entire letter, citing legal guidelines defending navy secrets and techniques.

Reuters was unable to ascertain the standing of those probes however discovered no proof Arsenyev or any of his workers confronted prison costs. The prosecutor-general’s workplace, Rostec and the FSB didn't reply to questions concerning the case despatched by way of e-mail.

In accordance with Arsenyev, inspections by numerous authorities disrupted work on the orders, however they had been delivered on time.

In September 2023, the defence ministry dropped a bombshell: it informed Arsenyev it was slicing by practically half the quantity Luch would pay for Volna’s modules, the paperwork associated to disputes between the businesses present.

Luch is now in search of to get better over 65 million roubles ($824,900) in advances paid to Volna, the paperwork present. That's 7 million roubles greater than Volna's complete income in 2020, the final yr for which the agency revealed accounts.

The ministry informed Arsenyev it recalculated the value after Volna automated extra of its manufacturing course of, lowering prices, the paperwork present.

A defence ministry official who dealt with the Volna contracts, talking on situation of anonymity, stated Volna failed to speak with the ministry to resolve the dispute, which Arsenyev denies.

Volna suspended manufacturing for six weeks and challenged the choice in courtroom, Arsenyev stated.

A choose who dominated in a lawsuit introduced by Luch concluded the ministry’s choice to scale back what could be paid for the modules damage Russia’s provide pipeline in Ukraine.

It led to the “non-fulfilment (disruption) of the 2024 state defence procurement programme for the availability of merchandise which are specifically demand for the SVO,” the choose wrote, utilizing an acronym for Russia’s navy operation in Ukraine.

The choose dominated in Volna’s favour, however over a dozen associated fits stay unresolved.

After his Pink Sq. protest, Arsenyev stated he saved working from hospital to resolve the manufacturing facility’s monetary and authorized issues, with little success. His firm continues to be afloat, however it has needed to downsize, and its orders are a lot smaller.

Now again at work, he spends a lot of his time attending courtroom hearings.

The one signal that officers or prosecutors seen his determined act of self-immolation: In October 2024, a courtroom fined him an undisclosed quantity for staging an unauthorised demonstration in a delicate location.

($1 = 78.7955 roubles)

Extra reporting by Christian Lowe, Anton Zverev and Polina Nikolskaya in London; Writing by Christian Lowe; Modifying by Alexandra Zavis

Our Requirements: The Thomson Reuters Trust Principles. , opens new tab

Purchase Licensing Rights Maria Tsvetkova is an investigative journalist initially from Moscow who focuses on Russia’s invasion of Ukraine as a part of a global staff of reporters. She has reported from the battle zones in Ukraine and Nagorno-Karabakh, in addition to doing reporting stints in Armenia, Turkey and Iraq.