‘Mayonnaise King’ arrested in Moscow for fraud involving Chinese drones

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Russian billionaire Valery Kustov, co-founder of the food company Efko, was arrested in Moscow this week on suspicion of large-scale fraud involving the production of drones for the Russian military. According to several Russian media outlets, several top executives from Efko and an official from the Ministry of Industry and Trade were also taken into custody.

According to the independent news portal Agentstvo, the case centers on the S-80 transport drone (also known as the C-80), which the Russian military uses to supply troops on the front lines in Ukraine. There has long been dissatisfaction within military circles regarding the performance and reliability of this aircraft. The arrests follow earlier detentions of high-ranking officials, including Alla Polovchenya, deputy head of the ministry’s department of unmanned systems and robotics. She is suspected of embezzling government funds.

Russian media outlets, including Kommersant and RBK, report that the suspects set up a scheme to misuse subsidies for drone development. Instead of manufacturing drones themselves, they allegedly purchased drones in China, relabeled them, and delivered them as Russian-made products. This allowed them to embezzle state aid intended for import substitution and the defense industry.

Efko, best known in Russia as a producer of mayonnaise and sunflower oil, was a co-founder of the “Transport of the Future” project, which develops drones and air taxi technology. In 2023, the company opened a drone factory in the Samara region, with the intention, among other things, of producing the S-80/Hector S-80. Later, “Transport of the Future” was spun off as an independent company. Kustov, whose net worth is estimated by Forbes at approximately 1.1 billion euros, denies any fraud through his company. Efko expressed support for the detained employees, called for restraint, and asked that speculation be avoided. Formal charges or details regarding Kustov’s own role have not yet been made public.

©Pavel Egorov - illustrative image