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ARMED Russian police broke into a British-owned paper factory near St Petersburg yesterday, bringing a violent end to an 18-month dispute between workers and their employer.
At least one person was shot after the "Typhoon" unit of the Russian police burst into the factory, smashing windows on the ground floor to get in.
The incident illustrates the growing problems faced by Western businesses seeking to operate in Russia and the heavy-handed methods occasionally used by local police.
The police intervention comes after deepening hostility between workers and the owner of the factory, a London company called Alcem UK. The workers claim that Alcem, which owns a majority stake in the factory, intends to close the plant down and sell its equipment.
The police were believed to be acting for the Justice Ministry in an attempt to wrest control back from the workers, who had locked out their British owner. Police told Russian news agencies that the raid had been planned with St Petersburg authorities. Grigori Dvas, the region's Deputy Governor, said that police had been ordered "to free the factory from people who didn't have the right to be there under a court order".
The workers have apparently taken hostage Alexander Sabadash, who works for Alcem UK. They claim the company has plans to close the factory, which provides jobs for most of the inhabitants of Sovietsky, an impoverished village near Vyborg 85 miles northwest of St Petersburg. The last time that Alcem officials tried to visit the factory, in July, a scuffle broke out as workers blocked entry to the plant and at least one person was injured.
The company bought the controlling interest in the factory from Nimonor Investments, a Cyprus-based company with a British representative in Moscow, Mark Rhodes. Mr Rhodes was unavailable for comment last night. The factory's 2,160 workers locked out Nimonor in February 1998 in a dispute over restructuring. They claimed that Nimonor had promised to pay the concern's £5 million wage arrears and £50 million federal tax debts, as well as keeping on all the workers. These conditions were proposed in a document signed by Nimonor and obtained by the St Petersburg Times.
In the 1980s, the factory had 60 per cent of the regional market in sweet wrappers, gift paper and toilet paper. The Russian parliament has sympathised with the workers and, when the factory began working again last August, offered tax relief against its huge debts. But Alcem were kept out of the factory by guards.
According to British company records, Alcem UK is registered to an address at Palladium House, Argyle Street, London. Its precise ownership is unclear, although its directors are listed as two Britons, Bryan Webb, 66, and Paul Joseph Williams, 53. Mr Webb said yesterday that he had not heard about the police raid.
He said: "I am not the right person to talk to about this."