Spanish court probes Russian tycoon’s purchase of supermarket chain Dia

Spain's top criminal court said Thursday it has opened an investigation into whether Russian tycoon Mikhail Fridman artificially depressed the share price of supermarket chain Dia before buying the firm.

Spanish court probes Russian tycoon's purchase of supermarket chain Dia
File photo of a Dia supermarket. Photo: AFP

The Kremlin-friendly oligarch appeared in court in Madrid on Monday as part of a separate similar case in which judges are investigating allegations he acted to bring down the value of another Spanish takeover target, digital entertainment firm Zed Worldwide.   

He denied all charges in that case in a statement released after he was questioned in court.

An investigating judge with the National Court “has begun investigating a complaint” against Fridman and his Luxembourg-based investment company LetterOne “in connection with its acquisition of Dia”, according to a document from the court published Thursday.   

In May, LetterOne secured majority control of the struggling supermarket chain via a hostile takeover following a bitter dispute with its previous management as the firm's share price slumped.

The judge is investigating allegations made in an anonymous complaint that LetterOne “maintained a heightened financial tension to lower the share price, until it managed to buy the company,” the court document said.

Spain's Supreme Court had in September given the National Court a mandate to investigate this case which it said could constitute the crime of “market manipulation” and could have had “serious repercussions on… the national economy” given the size of Dia's supermarket network in the country, the document added.

It cited a police report alleging that Fridman acted in a “coordinated and concerted way” through a network of “criminal associates… to create a situation of conflict… and lack of liquidity in the short term” so as to lower Dia's price and buy the firm.   

In a statement, LetterOne called these allegations “totally false and defamatory”.

“The reality is Dia suffered from mismanagement and accounting irregularities were discovered, which negatively affected all shareholders, including LetterOne,” it added.

LetterOne said it was “committed” to investing 1.6 billion euros to protect jobs, suppliers and keep stores open.

Through LetterOne, Fridman also controls interests in telecoms, banking, oil and healthcare.   

The tycoon, who is reportedly close to the Kremlin and was listed by Forbes this year as London's richest resident, is also one of the founders of Alfa Bank, Russia's largest privately-held lender.

READ MORE: From Russia with love: Tycoon buys out ailing Spanish supermarket

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Spain to ban plastic packaging for food and vegetables from 2023

A ban on the sale of fruit and vegetables in plastic wrapping in supermarkets will come into effect in 2023, as part of a decree drafted by Spain's Ministry for Ecological Transition.

Spain to ban plastic packaging for food and vegetables from 2023
A ban on the sale of fruit and vegetables in plastic wrapping in supermarkets will come into effect in 2023. Photo by CESAR MANSO / AFP

It also includes measures to encourage shoppers to buy loose fruit and vegetables and curb the sale of plastic bottles.

The ban on plastic wrapping for fruit and vegetables will apply to produce weighing under 1.5 kilograms. Meanwhile those “at risk of deteriorating when sold loose” will not be affected, according to Spanish newspaper El País.

The decree aims to incorporate European Union rules into Spain’s legislation, and follows similar legislation in France that will go into effect next year.

READ ALSO: This couple turned a desire for a zero-waste household into a thriving Madrid business

The goal is to “fight the overuse of packaging in the most effective way,” a ministry spokesperson told El País, adding that plastic pollution has “exceeded all limits.”

It will also aim to make 100% of packaging recyclable by 2030, as well as cut the sale of plastic bottles by half.

Rules forcing authorities to “encourage the installation of drinking fountains in public spaces”, “introduce alternatives to the sale of bottled drinks” and reduce “the distribution of single-use drinking cups” at public events, are also being contemplated.

Representatives of green groups welcomed the ban but added that the Spanish government is not moving fast enough to put a stop to plastic pollution.

“We drink plastic, we eat plastic and we breathe plastic,” Julio Barea of Greenpeace, told El País.

According to the Ministry of Ecological Transition, Spain generations 1.6 million tonnes of waste from plastic packaging every year, and recycles less than half. Two thirds of what goes to landfill is not recycled.