MOSCOW — The deal, worth $670 million, was a triumph for Russia’s tech sector, which is rich in talent but often impoverished by the country’s stumbling efforts to market its world-class skills.
The sale to an American company this year of Nginx, a Russian company that developed web server software now used by more than a third of the world’s websites, sent a clear message that Russian programmers can create valuable products for the global market.
But that was before Russia’s notoriously capricious and aggressive law-enforcement system got involved.
In a series of raids late last week, police officers armed with automatic weapons searched the homes of the company’s Russian founders, Igor Sysoyev and Maxim Konovalov, who were taken in for questioning, and also their company’s Moscow office. Both men now work for F5 Networks, a Seattle-based tech company that purchased Nginx — pronounced “engine-x” — in May.
Amid widespread dismay and anger over the raids, a criminal case initiated by the authorities against Nginx has turned one of Russia’s biggest IT success stories into a case study of why the country has so much trouble developing its economy beyond just pulling oil, gas and other natural resources out of the ground.
Aleksandr Belov, the head of an internet start-up incubator at the Moscow Physics and Technology Institute, warned that the case “kills technological progress, kills entrepreneurship, kills the already dead venture market and closes the windows to capital for Russian start-ups.”
The police action against Nginx came just weeks after armed security officials raided a prestigious Moscow physics institute as part of a criminal case against a private, high-end optics company that, from rented office space at the Lebedev Physics Institute, had developed a small business processing raw glass imported from China and exporting the finished products abroad.
Aleksandr Gorbunov, an acerbic and hugely popular social media critic of Russia’s often lawless law-enforcement agencies, condemned the latest raids as another sign of how Russia is governed by “the law of the jungle, where the only way to survive is to constantly demonstrate your strength over the weak in the hope that stronger animals will leave you alone.”
The early morning raids on Mr. Sysoyev and Mr. Konovalov were triggered by a criminal case over claims that Nginx does really not own the software acquired by F5 Networks when it bought their Russian company, which was registered in the British Virgin Islands.
In a summary of the case in a search warrant, a Ministry of Interior investigator, E.A. Spirenkova, said Nginx’s popular software belonged to Rambler, a Russian internet and media holding company controlled by a state bank and a well-connected billionaire.
Both Mr. Sysoyev and Mr. Konovalov worked previously at Rambler, which, according to the investigator, has “exclusive rights” to the software they sold. A criminal conspiracy to steal the software, the investigator said, had defrauded Rambler of 51 million rubles, around $810,000.
In the face of the public outcry, Rambler executives disowned the criminal case.
Writing on Facebook, Igor Ashmanov, Rambler’s former chief executive, dismissed the claims of theft as “frivolous” and “not based on anything at all,” a view echoed by many others in Russia’s IT sector. A group of former Rambler employees issued a statement saying they were “ashamed” of their former employer, accusing it of “intimidating business and trying to increase its capitalization by commandeering and misappropriating.”
Assailed on social media and in the Russian press as a bullying behemoth bent on grabbing a share of the money paid by the American company, Rambler issued a statement on Monday insisting that it had played no role in initiating the criminal case against Nginx and wanted it stopped.
Disputes over intellectual property are a regular feature of the fiercely competitive IT sector around the world, but these are usually adjudicated by courts in civil proceedings. In Russia, such cases quickly escalate into criminal investigations featuring security officers waving guns. Powerful figures in business with connections to the Russian state often use the security forces to extort money or favors from weaker rivals.
Mr. Konovalov, one of the Nginx founders whose Moscow home was raided, denounced the police action in an interview with Meduza, a news portal, as a “typical racket. Simple as that.” He said the raids had been “professional and polite, if you exclude the fact that special forces agents were standing around with automatic weapons.” Contacted by The New York Times, he declined to comment about accusations that he and his partner, Mr. Sysoyev, had stolen Rambler’s intellectual property.
Rambler, in a statement issued after an emergency board meeting on Monday, blamed Lynwood Investments, a Cyprus-registered company controlled by billionaire Aleksandr L. Mamut, a major shareholder in Rambler, for the criminal case against Nginx.
Rambler’s board ordered the company’s management to ask the law enforcement authorities to “terminate” the criminal case. Rambler’s chairman, Lev Khasis, said, “It’s natural for tech companies to defend their rights, but these issues should be decided by civil laws.”
The decision by Rambler’s board to step away from the case does not automatically end the criminal investigation, but it does indicate that at least some powerful forces in Russian business — including the state-controlled bank Sberbank, which purchased a 46 percent stake in Rambler in August — want to put an end to the predatory practices that have done so much to stymie Russia’s economic development.
The Kremlin, too, has tried to distance itself from the ruckus. President Vladimir V. Putin has for years insisted that Russia’s future economic health rests on exploiting its large reserves of scientific and technological talent but has done nothing to rein in law enforcement agencies that keep undermining this goal.
Asked about the raids on Nginx’s founders, Mr. Putin’s spokesman, Dmitri Peskov, said on Monday that the Kremlin was not involved and could not interfere. Russia, he added, “remains attractive for investment.”
F5 Networks also distanced itself from the dispute, insisting in a statement that it was “currently not a party” to the criminal investigation unfolding in Moscow.
In a message to customers, it assured them that all of the disputed Nginx software it purchased was “stored on servers outside of Russia” and that “no other products are developed within Russia.”
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