Russian director resigns from Buhler Industries after statements supporting invasion of Ukraine

Konstantin Babkin has resigned as a director of Winnipeg-based farm machinery manufacturerBuhler Industries after making at least two public statements in support of Russia's invasion of Ukraine

The latest statement came on Sunday whenBabkin blamed the Russian attack on U.S. interference and said "it is necessary to stop the conflict, to build a unified economic space with Russia," in a Russian language interviewon CGTN, a Chinese state-owned broadcaster.

This came a few days after Babkin, who also leads Russia's Action Party, tweeted out his party's support of Russian President Vladimir Putin's "decision to recognize the Donetsk and Luhansk People's Republics" two separatist-controlled areas that are recognized by the international community as Ukrainian territory which was a precursor to the conflict.

Buhler initially disavowed Babkin's statements on Tuesday saying "Buhler Industries is united in strong opposition to the comments made by Konstantin Babkin," according to an email by Buhler spokesperson and vice-presidentAdam Reid, who will now take on Babkin's director role.

On Wednesday, the companyput out a press releaseannouncing Babkin's departure from Buhler's board.

"Babkin has been a vocal supporter of the actions taken by the Russian Federation," wrote Reid.

Reid said Babkin's views are "in stark contrast to those of the North American executive team and do not reflect the position or values of Buhler Industries."

The board's chair, Dmitry Udras, has been replaced by Canadian Grant Adolph, but Udras remains on the board as a director. CEO Yury Ryazanov keeps his position.

Both men, who are Russian nationals, are on the federal council of the Babkin-led Action Party, according to the party's website.

Another Russian, Oleg Gorbunov, also remains on Buhler's seven-person board.

Babkin, Udras and Ryazanov are the co-owners of Novoe Sodrugestvo CJSC, a Russian conglomerate that owns 20 companies including Buhler, Russian tractor maker Rostselmash and Selmashbank, a financial institution based in Rostov-on-Don in southern Russia, according to its website.

The trio have been on the board of Buhler Industries since a subsidiary of their Russia-based conglomerate, Combine Factory Rostselmash Ltd., purchased the majority stake in Buhler in 2007.

Rostselmash upped its ownership in Buhler from 80 per cent to 97 per centin late December with a $12-million share purchase from past chairman and CEO John Buhler's holding company.

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"Buhler Industries is 97 percent owned by Russians but has roots in Canada going back to 1932 so we do not consider ourselves to be a Russian company," Reid wrote in an email.

Marcus Kolga, senior fellow at the Macdonald-Laurier Institute, says decisions like this show the sanctions and the threat of sanctions are working by putting pressure on Putin and those around him with wealth and political influence.

"They're worried. They are deeply, deeply concerned I think they're sweating bullets right now because they know that they could be next. Their assets could be targeted right here in Canada," said Kolga.

Conservative MP James Bezanwants Canada to sanction Russians with business interests in Canada but without impactingCanadian workers.

"I don't think that the Canadian operations, if they've been operating on a very principled manner and have denounced Russia's aggression, should be held directly responsible. It's their shareholders, the oligarchs whocontrol it and own these companies, [who] are the targets here," said Bezan who represents theSelkirk-Interlake-Eastman riding.

Ossama AbouZeid is one of the Canadians appointed as a director on the board. Hereplaces John Buhler who retired. AbouZeid previously served as president and chief financial officer of Buhler Industries.

AbouZeid also served as project manager for the construction of Investors Group Field before he was assigned a contract to serve as project director for the Winnipeg police headquarters.

AbouZeid isnamed in a lawsuit filed by the City of Winnipeg in 2020. He filed a statement of defence and cross-claim in September2020. The case is still ongoing.

• Winnipeg sues ex-CAO, contractors, claiming they defrauded city in police HQ project

In a separate press release Wednesday, Buhler announced it will match donations to the Red Cross made by staff and dealersup to $100,000 to help respond to the humanitarian crisis.

The company which employs 700 workers in Canada says it strongly opposes the decisions of the Russian Federation and stands with the people of Ukraine.

"In light of the current situation, the company has made several changes to the board of directors to align the organization with the values of the Canadian-based leadership team," Reid wrote.

Calls for Canada to sanction prominent Russian businessmen

3 years ago

Duration 2:11

Experts are calling on Canada to sanction prominent Russian businessmen Roman Abramovich and Konstantin Babkin, who own percentages in Canadian companies. The threat of sanctions has already caused both men to cut some of their international ties.