Putin Places Four Japan Tobacco Units in Russia Under Temporary Management

Japan Tobacco (JT) shares fell 19.3% in Tokyo on Nov. 6 after Russian President Vladimir Putin placed four Russian units under temporary management, putting at risk a business that accounts for about a quarter of JT’s adjusted operating profit.

Putin signed the decree Nov. 5, placing four of JT’s Russian manufacturing companies under a Russian firm’s management. JT confirmed the move Nov. 6 and said it is gathering information to evaluate its options and the impact on the group.

The stock closed at 6,269 yen, down 1,500 yen. Japan’s Nikkei 225 fell 5.96% that day, while JT shares hit the Tokyo market’s daily down limit.

JT said the arrangement differs from nationalization or confiscation and that it had complied with applicable rules and sanctions in Russia. Japanese Finance Minister Satsuki Katayama said Tokyo had protested through diplomatic channels and called for the measure to be withdrawn.