ISTANBUL: US technology company Extreme Networks Inc said last year it had suspended all business activities in Russia to show solidarity with the people of Ukraine “living under attack.” But Reuters has found that, as the publicly-traded US firm was unwinding its Russia operations, its most senior manager in the region did not stop doing business there.
Sergey Gusakov, while still working as Extreme’s manager for former Soviet republics, created his own company in April 2022 to supply Russian clients with IT equipment made by a competitor of his employer, according to interviews with two people familiar with the matter, as well as Russian corporate and customs records.
The IT equipment sold in Russia by Gusakov’s company Vektor-T is assembled in China and contains US microprocessors, according to the people familiar with the matter and photographs seen by Reuters.
The upshot: microprocessors produced by US chip companies that have banned sales of their products to Russia - as Extreme did - have made their way to the country embedded in Chinese equipment, illustrating the limitation of US trade restrictions.
A Reuters investigation late last year showed how voluntary export bans by tech companies and broader Western sanctions adopted after Moscow launched a full-scale invasion of Ukraine in February 2022 haven’t stopped billions of dollars of computer and other electronic components from flowing into Russia through networks of third-party suppliers. Contacted by Reuters about his private business, Gusakov said: “This is fiction. Goodbye.” Gusakov has been running his parallel venture for more than a year despite a co-worker alerting Extreme’s top management in summer 2022 that his involvement in sales of technology on the side to Russia could violate company rules.
“These violations will lead to a heavy strike to the reputation of the Extreme company against the background of the war in Ukraine,” the complaint said.
Asked about Gusakov’s side activities, Extreme spokespeople told Reuters that the matter was subject to an investigation by the company’s legal department and outside counsel. They declined to comment on Vektor-T’s operations, saying it was outside Extreme’s control, and did not respond to questions about Gusakov’s current status with the company.
The spokespeople said Extreme “takes very seriously its obligations to comply with US export controls” and does no business in Russia.
Last year, Reuters revealed how Extreme, before the invasion of Ukraine, provided IT equipment to a US-sanctioned military company that makes missiles for the S-400 air defense system, one of Russia’s most sophisticated weapons.
In October, Extreme confirmed Reuters’ findings, saying its products had gone to “bad actors,” and told US regulators it would investigate current and former employees for possible involvement and implement “best in class” export controls.
In April last year, Extreme reorganized its regional office by relocating Gusakov and a few members of its Moscow staff to Kazakhstan, according to the two people familiar with the matter. Gusakov, who joined Extreme in 2010, according to a profile published on the company’s website, retained his title as regional manager for the CIS, a group of former Soviet republics.
But on April 13, 2022, Gusakov co-founded OOO Vektor-T in the Russian city of Oryol, Russian corporate records show. He did not inform Extreme, according to the people familiar with the matter.
Comments
Comments are closed.