The raid, reminiscent of the tactics employed in corporate battles over lucrative assets in the turbulent s, is the latest in a series of obstacles the company has faced in its drive to increase its presence in the Russian regions. The register of arbitration cases contains over lawsuits against the Swedish concern, while Ikea in russia total number of court cases involving it has exceeded All the other major retailers in Russia taken together would not have a tenth of this number of court cases between them.
It insists that these lawsuits are retaliation for its honesty and determination to do clean business in a country where corruption is part of the system. And of course the two executives have already paid a price for their actions. This creates many opportunities for corruption.
Even worse, it creates a system where ordinary people and underpaid, low-level bureaucrats are expected to meet an infinitely higher standard than major Russian and foreign companies and the high-level officials they sponsor.
But while the company has successfully penetrated the Russian market, its expansion has not been smooth. If Russia wants to attract foreign investment, the government will have to do much more to tackle the widespread cultural acceptance of bribe-taking.
Medvedev has spoken a lot about the existential threat that corruption poses to Russia. He has passed new laws and there has been an upurn in enforcement. President Vladimir Putin talks a great deal about the need to clamp down on corruption and has launched numerous anti-graft campaigns and investigations targeting state-owned companies.
The company itself is convinced that this is the result of its ambition to conduct honest business in the country and that other firms avoid such complications by paying bribes. In exchange for the bribe, officials agreed to sign a fake acceptance certificate for electricity equipment in an IKEA shopping mall.
Jesse Heath is a practicing attorney specializing in anti-corruption law with a particular focus on Russia and the post-Soviet space.
Also the author of the blog The Russia Monitor www. Furthermore, the project had not even been approved. However, in Russia IKEA has come up against more problems than in other countries — primarily because it is hard to build things. Last Friday, IKEA announced that they were firing two high-level expat executives in Russia for either approving or acquiescing to the payment of bribes by its contractor in St.
Some readers might remember that last summer IKEA announced it was halting all investment projects in Russia and later that year publicized its battles with the power company to the New York Times. Petersburg to officials at utility company Lenenergo.
The executives also allegedly engaged in other questionable activities, according to Swedish tabloid Expressen. IKEA is an absolute champion in terms of the number of court cases it has had in Russia. Since his inauguration, Pres. IKEA has been in litigation regarding these two disputes for over 10 years.
Shortly after, the prosecutor in Sverdlovsk Oblast launched a probe into the Mega store in Yekaterinburg over compliance with sanitary and fire safety standards.
IKEA has been patient so far, but other foreign businesses may prefer to look elsewhere. IKEA even decided to conduct an internal investigation to find out if any more of its employees were engaged in bribery directly or indirectly.
In all countries, IKEA builds its shopping malls itself instead of renting premises. The Lawyers and Business firm has represented the company in many lawsuits for several years already.Now Russia, the retailer’s fastest growing market after China, is the home of fourteen IKEA ‘Mega’ shopping centres, spreading from St.
Petersburg on the Baltic to Novosibirsk in south-western Siberia. The IKEA stores in Russia are in connection with MEGA malls developed by IKEA. new openings planned by Israel: Netanya: 4 IKEA operates in Israel through a franchise company, IKEA Israel, which is owned by Matthew Bronfman.
The second store opened on March 9,in Rishon LeZion, a suburb of Tel Aviv. The store has an. The Swedish furniture retailer IKEA is landed with hundreds of lawsuits in Russia every year.
It insists that these lawsuits are retaliation for its honesty and determination to do clean business.
IKEA Catalogue & handbooks IKEA Catalogue Handbooks Buying Guides (Japanese) Customer service. IKEA, which has publicly railed against corruption in Russia, has itself been caught paying bribes there. Could President Medvedev's anti-corruption campaign really turn Russia into.
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