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Business

Google’s Russian subsidiary will file for bankruptcy after the bank account is seized




May 18 (Reuters) – Google’s Russian subsidiary plans to file for bankruptcy after authorities seized the bank account, making it impossible to pay employees and providers, but free services including search and YouTube will continue to work, a Google spokesman said Wednesday.

The Alphabet Inc (GOOGL.O) device has been under pressure in Russia for several months for failing to delete content that Moscow considers illegal and for restricting access to some Russian media on YouTube, but the Kremlin has so far stopped block access to the company̵[ads1]7;s services.

“The Russian government’s seizure of Google’s bank account has made it untenable for our Russia office to operate, including hiring and paying employees in Russia, paying suppliers and suppliers and fulfilling other financial obligations,” a Google spokesman said.

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“Google Russia has published a statement of intent to file for bankruptcy.”

A TV channel owned by a sanctioned Russian businessman said in April that bailiffs had seized 1 billion rubles ($ 15 million) from Google because they failed to restore access to their YouTube account, but this is the first time the US technology giant has said sin bank. the account in its entirety is seized. read more

Google did not immediately confirm whether it was the seizure of these funds that led to their intention to file for bankruptcy, or whether other seizures had taken place.

The database of Russia’s federal bailiff service listed two seizures since mid-March, without specifying the amounts, as well as other fines and penalties.

The service confirmed that it had seized Google’s assets and property.

Google had moved many of its employees out of Russia since Moscow sent tens of thousands of troops into Ukraine on February 24. But some had remained.

A memo posted in Russia’s official register of Fedresurs on Wednesday said that the Google subsidiary intended to file for bankruptcy and since March 22 had assumed an “inability to meet its financial obligations”, including severance pay, remuneration for current and former employees and timely mandatory payments.

FREE SERVICES TO STAY

Google, which has stopped advertising sales and most other commercial operations in Russia, said the free services, including Gmail, Maps, Android and Play, will remain available to Russian users.

Russia said on Tuesday that it does not plan to block Google’s YouTube, despite repeated threats and fines, and acknowledged that such a move would likely lead to Russian users suffering and should therefore be avoided. read more

Rostelecom (RTKM.MM) CEO Mikhail Oseevskiy said on Wednesday that Google was operating normally in the country, including all the servers, the news agency TASS reported.

In December, Russia fined Google 7.2 billion rubles for what Moscow said was a repeated failure to delete content Russia considers illegal, the first revenue-based penalty in such cases in Russia.

That fine increased by 506 million rubles due to a coercive fee, the bailiff’s data showed.

Google’s Russian subsidiary’s turnover in 2021 was 134.3 billion rubles, showed Interfax news agency Spark database of Russian companies.

Alphabet said last month that Russia accounted for 1% of revenue last year, or about $ 2.6 billion.

($ 1 = 63.9570 rubles)

Sign up now for FREE unlimited access to Reuters.com

Reporting from Reuters; Edited by Elaine Hardcastle, Guy Faulconbridge, David Clarke and Barbara Lewis

Our standards: Thomson Reuters Trust Principles.



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