Putin ally joins tech giant Yandex

A long-time ally of President Vladimir Putin, Alexei Kudrin, said Monday he will be joining Yandex as the Kremlin seeks to tighten its grip on Russia’s top technology giant.

The announcement from the former finance minister comes after months of instability at the internet company, with employees fleeing due to the military offensive in Ukraine and its founder hit by Western sanctions.

Russia’s top internet company and most popular search engine is being divided into Russian and international businesses because of Western penalties.

Analysts say that the move will cement government control over what was once seen as one of Russia’s top success stories.

Last week Kudrin announced he was stepping down as head of Russia’s Audit Chamber to focus on private initiatives with “significant impact on people”.

“I accepted an offer from Yandex to become a corporate development adviser,” Kudrin said on Monday.

He added that in his role he will work to “ensure the long-term and sustainable development of the company on all markets, including international ones”.

Kudrin is expected to oversee the operations of the restructured company, while its founder, Arkady Volozh, who was hit by EU sanctions in June, will develop a number of Yandex businesses outside Russia. In recent years Russian authorities have steadily ramped up control over the internet -- once considered the last bastion of free speech.

All major media organisations are already either state-owned or closely toe the Kremlin line.

Staff exodus

In August, Yandex sold its news feed Yandex News to state-affiliated rival VK, the owner of Russia’s largest social network.

“The state has decided to speed up the creation of purely Russian services and increasingly limit the access of Russians to foreign services,” economist Sergei Khestanov told AFP, referring to the authorities’s growing control over the internet in Russia.

He said that with Kudrin at the helm of Yandex authorities could create an internet “firewall” to shield the government from criticism. In March, Russia banned Facebook and Instagram for “extremist activity” as part of efforts to clamp down on social media during Moscow’s assault on Ukraine.

Moscow’s military intervention in Ukraine triggered an exodus of Russians from the country, including many from Yandex and the IT sector. Brussels describes Yandex as “promoting state media and narratives in its search results.”

The EU said that Volozh, 58, was “supporting, materially or financially” the Russian government in its assault on Ukraine. When the sanctions were announced Volozh immediately stepped down as CEO and resigned from the board of directors to avoid the firm also being hit by sanctions. The Bell, a respected Russian-language media outlet, reported earlier that Volozh turned to Kudrin for help in securing Putin’s support for the restructuring plan.

Too close to Putin

Kudrin served as finance minister between 2000 and 2011 and was famously fired by then-president Dmitry Medvedev for insubordination in 2011 and later appointed chairman of the Audit Chamber. The 62-year-old was seen as one of the government’s most prominent liberals in the earlier years of Putin’s rule and he supported opposition protests against widespread claims of election fraud in 2011-2012.

For Kudrin, Yandex offers an opportunity to distance himself from the government after Putin sent troops to Ukraine, said Tatiana Stanovaya, founder of the R.Politik political analysis firm. “He has nowhere to go,” Stanovaya told AFP before the announcement was made.

“He is too close to Putin. His departure would be seen as an act of betrayal.”

The Bell, citing sources, reported that Kudrin will have to “guarantee” to the Kremlin that Yandex and its technologies remain Russia-based. But at the same time, the sources said, he will have to make sure that the company does not become another state-run behemoth, like technologies conglomerate Rostec.

Last month, Yandex confirmed plans to overhaul “the group’s ownership and governance in light of the current geopolitical environment.”

The company said this could include developing some of its services -- including self-driving technologies, cloud computing and data labelling -- “independently from Russia.”