Moscow, Russia – Google’s Russian subsidiary is on the brink of bankruptcy as it struggles to cope with its mounting debt to creditors, Russian news agency TASS reported on Monday.
The subsidiary’s financial liabilities have now surpassed a staggering 20.1 billion rubles ($211,579,032), according to documents revealed during the first creditors’ meeting held recently.
Representatives from various entities, including the Federal Tax Service, Izhevsk Radio Plant, Alfa Textiles, 2GIS mapping service, and Proxima Technology, convened at the meeting. They collectively decided to take the matter to the Moscow Arbitration Court, seeking to declare Google’s Russian office bankrupt and to initiate formal bankruptcy proceedings.
The Russian subsidiary’s ordeal dates back to May 2022 when it declared its intention to file for bankruptcy, citing its inability to meet its financial commitments. In November of the same year, the Arbitration Court of Appeal took the first step by initiating supervision-based bankruptcy proceedings against Google LLC.
This move has since triggered an influx of over 1,000 claims from Russian companies, including prominent names like VK, 1C-Bitrix, and Diasoft, all alleging that Google had failed to provide promised advertising services after its bankruptcy declaration.
Financial figures for 2022 lay bare the extent of Google’s troubles in Russia. Revenues for the year plummeted by a staggering 82% compared to the previous year, nosediving from 134.3 billion rubles ($1,413,684,776) to a mere 24.2 billion rubles ($254,736,944). Meanwhile, the net loss for the same period decreased by 61%, amounting to 10.2 billion rubles ($107,368,464).
The Federal Bailiff Service has already taken preemptive action by freezing Russian Google’s bank accounts, a measure aimed at facilitating ongoing legal proceedings.