The dizzying fall of a Russian gold magnate who fell out of favour with the Kremlin

Russian gold magnate Konstantin Strukov is in the process of being stripped of his precious metal empire by the Kremlin, as Russian prosecutors have indicted him on a variety of charges and moved to confiscate his assets. 

The billionaire – Russia's 78th richest man – was reportedly prevented by police from leaving the country on July 5 as he was preparing to fly on his private jet to Turkey. At least that's what the business daily Kommersant says, publishing a photo of him on board his plane facing airport security officers. 

Representatives for Strukov, whose passport has been cancelled, disputed this version of the story without commenting on the photo.  

Flashy lifestyle abroad 

It is clear that Strukov will no longer be at the helm of Uzhuralzoloto (South Ural Gold), Russia's third-largest gold producer after the private company Polyus Gold and the state-owned giant Polymetal International. 

The Prosecutor General’s office has asked the Russian judiciary to seize all of Strukov's assets and transfer them to the state, according to the Russian news agency Tass.  

Authorities are also asking the Kremlin to obtain control of companies that Strukov, who is accused of corruption, has registered in several European countries in the name of his daughter, who lives in Switzerland. 

In the indictment, Russian prosecutors accuse the billionaire of having transferred part of his fortune abroad to shield it from Russian authorities, using it to bankroll an ostentatious lifestyle of yachts, luxury cars and homes. 

This is a far cry from what President Vladimir Putin has demanded of wealthy Russian businessmen since the country's full-scale invasion of Ukraine in February 2022.  

"A responsible entrepreneur is a real citizen of Russia, of his country, a citizen who understands and acts in its interests," Putin said in March 2023 at the Russian Union of Industrialists and Entrepreneurs forum in Moscow. 

"He does not hide assets offshore, but registers companies here, in our country, and does not become dependent on foreign authorities." 

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From loyal billionaire to bête noire  

The legal action against Strukov, whose fortune is estimated by Forbes at $1.9 billion, is being waged on several fronts. 

In addition to accusations of corruption, the FSB domestic intelligence service searched Uzhuralzoloto's Moscow headquarters as part of investigations into violations of environmental standards and industrial safety infractions at company sites where several workers have reportedly died in recent years. 

It's a dizzying fall for Strukov, who until recently was seen as a model Russian oligarch with impeccable loyalty to the Kremlin. The majority shareholder of Uzhuralzoloto, Strukov is also deputy speaker of the legislative assembly of the Chelyabinsk region in the Ural Mountains and a member of the ruling United Russia party. He was awarded Moscow’s "Order of Merit to the Fatherland", 2nd class, in 2021.  

Strukov gained control of gold giant Uzhuralzoloto in 1997 after its privatisation without coming into conflict with the Kremlin, unlike many of the oligarchs who amassed large fortunes after the fall of the Soviet Union. 

Before his fall from grace, he had all the appearances of a wealthy but faithful servant to Putin's cause. 

His downfall sends the message to oligarchs that "some forms of loyalty are not enough anymore", says Stephen Hall, a specialist in Russia at the University of Bath in the UK. 

Strukov was a useful “fall guy” for the Kremlin, “to show that fealty is more important than loyalty", Hall adds. 

The Kremlin is sending a signal to Russian billionaires who think they can live in two worlds – for example, by proclaiming their support for Russia’s war in Ukraine while sending their children to study at the best Western universities.  

State seizure of assets also means there is more money to hand out to Kremlin loyalists Putin wants to reward: “This kind of redistribution happens in most autocracies when the economy isn't going well,” Hall notes, allowing the autocrat to “keep his inner circle and those that are really important happy".   

Strategic assets and scapegoats 

A recent series of nationalisations carried out by the Kremlin comes at a crucial moment for the economy. The attorney general's office has stated that nationalisations since 2022 have brought $30 billion into state coffers. 

Initially, nationalisations were used to acquire the Russian branches of foreign companies that were no longer able or willing to do business in Russia because of sanctions and the war. But the example of Uzhuralzoloto shows that Russian groups are not immune from seizure by the state.  

Maximilian Hess, founder of the consultancy firm Enmetena Advisory and author of “Economic War: Ukraine and the Global Conflict between Russia and the West”, says the recent nationalisations are focussed on  “key strategic industries. Putin wants to reassert control of gold” and commodities – including “agricultural commodities". 

In February, Moscow decided to nationalise Rodnye Polya, Russia's largest grain exporter.  

Vadim Moshkovich, the boss of Rosagro, Russia's largest agribusiness group, was accused of fraud and jailed in March. “These are assets that the authorities don't want to see fall into the wrong hands,” notes Hall. 

And especially not now. The wave of nationalisations, which the prosecutor's office notes has been gathering pace since the beginning of 2025, should enable Moscow to get its hands on assets that are especially useful as the Russian economy hits a rough patch.  

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Putin is “preparing for a more difficult time for Russia economically. It looks like Russia could even be headed for a recession in the next year,” Hess says, adding that the economic boost from massive government  spending on the war “has really slowed down". 

Strukov is not the only high-profile figure to incur Moscow's disapproval. Viktor Strigunov, who was deputy director of the National Guard until 2023, was arrested for corruption and abuse of power at the beginning of July. Other members of the National Guard are also under investigation for similar offences, adds the Moscow Times, an independent Russian news website. 

Hess says that Putin is following the same script he has often used in the past, pointing the finger of blame at “corrupt individuals” to explain Russia’s economic problems: “As the economy weakens, you need to keep beating that drum that ‘other people are corrupt and I'm the only one who can fix it’".  

For Hess, Strukov’s fall from grace and the increasing number of nationalisations of strategic companies are designed to further strengthen Putin's nearly exclusive control over the Russian economic and political apparatus. 

This article has been translated from the original in French by David Howley.