MOSCOW, July 7 (Reuters) - Russian prosecutors are

seeking to seize billionaire Konstantin Strukov's majority stake

in major gold producer Uzhuralzoloto (UGC) for the

state.

A hearing at the Sovetsky District Court in the Urals city

of Chelyabinsk is scheduled for July 8 in a case that marks the

latest in a string of asset seizures by the Russian state.

WHO IS KONSTANTIN STRUKOV?

Strukov, born in Russia's Orenburg Region in 1958, worked in

mining straight after graduating from Magnitogorsk State

Technical University.

Uzhuralzoloto was founded as a Soviet enterprise in 1976

and was privatised in 1993 following the Soviet Union's

collapse. Production had almost ground to a halt by 1997, when

Strukov became head of the unprofitable enterprise.

A business of the same name was created and assets,

including the Svetlinsky gold deposit - the largest in the Urals

region - were transferred to it.

The company subsequently went bankrupt and Strukov was able

to acquire its underlying assets and shares in a new company for

12.8 million roubles ($162,600).

After that, production restarted thanks to gold deposits it

had acquired in the Khakassia and Krasnoyarsk regions.

From 2004 to 2012, UGC's annual output increased to 10

metric tons from three tons. The company has 17 core assets and

eight processing facilities across two major regional bases.

Production in 2024 fell by 17% to 10.6 tons

year-on-year, due to some mines being closed at the regulator's

behest. UGC expects output to increase this year to as much as

14.4 tons.

Strukov, whose fortune is estimated by Forbes at $1.9

billion, was placed under sanctions by some Western countries

after Moscow sent troops into Ukraine, including Britain, which

has said his work as a director of a company in the Russian

extractives sector supported the Russian government.

Since 2000, Strukov has served on Chelyabinsk Region's

legislative assembly. He is deputy speaker of the region's

parliament and a member of the ruling United Russia party.

WHAT IS THE CASE AGAINST STRUKOV?

The Chelyabinsk court told Reuters that Russia's deputy

prosecutor general had filed a lawsuit against Strukov and

several other people, accusing them of obtaining property

"through corruption".

It did not specify further details, but Russian news

agencies reported, citing a law enforcement source, that

prosecutors were seeking to convert Strukov's entire stake in

UGC to state property.

The Kommersant daily, citing court documents, reported that

prosecutors believe Strukov used the bankruptcy procedure and

his position as a state official to transfer assets to UGC.

According to Kommersant, searches were conducted at UGC offices

last week in relation to alleged violations of environmental

legislation and industrial safety rules.

The newspaper also reported, citing court documents, that

200 billion roubles of Strukov's assets could be confiscated and

that he had used a Cypriot offshore company to conceal his

involvement with UGC.

Reuters has sought comment from Strukov through UGC.

Strukov owns a 67.8% stake in UGC, according to company data

as of the end of 2024. A company connected to Gazprombank bought

a 22% stake late last year and the remaining 10% of shares

floated on the Moscow Exchange in 2023 and 2024 in two public

offerings.

The central bank suspended trading of UGC's Moscow-listed

shares on Friday after they slumped almost 30% in two sessions.

The company said in an investor-focused blog on Friday that

protecting minority shareholders' rights was a top priority.

An anonymous comment on that post said: "The casino is safer

than the stock market."

IMPACT ON RUSSIA'S BUSINESS CLIMATE?

Foreign companies have grappled with the risk of state

seizure since Russia sent troops into Ukraine in February 2022,

but Moscow, citing strategic stability and domestic security,

has increasingly turned its attention to domestic assets too.

It was not clear why Strukov and UGC were targeted.

Moscow has been sending mixed messages on foreign

investment, seeking to present Russia as a viable destination

for foreign capital, while also arresting top business figures.

Foreign investment has declined sharply since the start of the

conflict in Ukraine.

Vadim Moshkovich, the billionaire founder of Russia's top

agriculture company Rusagro, has been held in

pre-trial detention since late March on charges of embezzlement

that he denies.

($1 = 78.7205 roubles)