Out of harm’s way
Belarusian businessmen Siarhei Khvalko, Siarhei Sayavets and Maksim Bohush have withdrawn as founders of the SMD Baltic microcircuit manufacturing company in Daugavpils. Their longtime partner from Latvia, Dmitrijs Radkevičs, remained the sole owner.
Such changes appear to be an attempt by Belarusian businessmen to distance themselves from European business in the context of cooperation with Russia.
“Nowadays, Belarusians are worse than blacks, especially in the Baltic states. The bank closes accounts and doesn’t even explain anything – it’s politics”, Siarhei Khvalko told Buro, explaining his decision to leave SMD Baltic.
The change of ownership in SMD Baltic took place at the beginning of December. This is literally a month after the publication of our investigation “Double-dealing”, which we prepared in cooperation with the Latvian publication Re:Baltica. In the investigation, we reported on the SMD Baltic microchip production company founded by three Belarusians – Siarhei Khvalko, Siarhei Sayavets, and Maksim Bohush – together with their Latvian partner, Dmitrijs Radkevičs..
Following Russia’s attack on Ukraine, SMD Baltic condemned the military aggression and claimed to have stopped accepting orders from Russia and Belarus. However, our investigation has shown that the Belarusian owners of the plant in Latvia have arranged supplies of microchips to Russia through other companies they control outside the European Union. Clients include Geoscan, a major Russian drone manufacturer in which a fund run by Putin’s daughter has a stake. Geoscan is under US sanctions for supplying equipment to the Russian military in Ukraine.
In response to our publication, SMD Baltic posted a statement on its website strongly denying the violation of the sanctions regime.
“Our company ceased all deliveries to Russia in the fall of 2022, immediately following the imposition of restrictions. SMD Baltic confirms that following the introduction of sanctions, all products manufactured by SMD Baltic, as well as components, are not supplied, exported, or re-exported directly or indirectly to Russia or Belarus”, reads the company statement.
The Latvian State Security Service (VDD) told Buro that it was assessing the information published in the investigation within the scope of its competence.
“At the same time, we cannot comment on our actions taken or planned”, VDD emphasized.
The Latvian Financial Investigation Service (FID) refused to comment on the situation with SMD Baltic, citing the law prohibiting the disclosure of information on inspections of specific companies.
“We have seen similar cases of Russian oligarchs changing the ownership structure of multimillion-dollar companies a day after being placed on sanctions lists. This gives the impression that it is a fictitious or formal activity to avoid sanctions. But I can’t comment on a specific case,” Paulis Iljenkovs, deputy head of FID, told Re:Baltica.
SMD Baltic and its former owners are not subject to EU or US sanctions.