One of Ukraine’s largest record labels has severed ties with €1bn (£880m) French music giant Believe over its refusal to pull out of Russia.
Mozgi Entertainment said it would stop working with the music distribution group amid accusations that the French company is still actively operating in Russia.
Iryana Horova, who founded Mozgi alongside husband and singer Potap, said the label had begun withdrawing its music catalogue from Believe after discovering it was still operating in the “enemy market”. Mozgi’s catalogue includes more than 2,000 songs.
The move throws fresh scrutiny on Believe, which has been criticised by MPs in Britain for its continued operations in Russia.
The company is one of France’s largest tech companies. It helps promote artists and independent labels on social media and places their music on streaming platforms. Believe has worked with artists including La Roux, Razorlight and Björk.
In March the company, which operates in around 50 countries and is valued at almost €1bn on the Paris stock exchange, said it was suspending operations in Russia, including halting new hires and investments.
However, documents seen by The Telegraph show a top executive at Believe Russia has continued marketing the company’s services. In one email, the executive offered a Russian label €3m for its new releases and back catalogue.
Believe has also continued to distribute music in Russia and recruit staff in the country, while it has an active deal with SberZvuk, a streaming service formerly owned by sanctioned Russian lender Sberbank. Britain has sanctioned SberZvuk’s new owners.
The latest financial figures for Believe, which is headquartered in Paris but has an office in London, show its revenues in Russia and Ukraine grew 8.8pc in the third quarter.
In October, a group of MPs signed a motion condemning Believe for “seeking to profit from the exit of major competitors in-market by evading sanctions” and called for the French company to pull out of Russia.
A petition has also been filed urging Ukrainian President Volodymyr Zelensky to investigate Believe’s activities, saying that continuing activities in Russia “is literally sponsoring the war against Ukraine and poses a threat to national security”.
A music industry source said: “Despite saying they’ve suspended all operations and investment in Russia, Believe are still actively recruiting in the country, paying out millions to Russian labels and receiving money from music streaming companies that are under international sanctions.”
Believe’s refusal to pull out of Russia differs from the approach taken by the world’s biggest record labels – Universal, Sony and Warner – which suspended operations in Russia or pulled out of the country completely following the invasion of Ukraine.
Believe said it had stopped new investments in M&A in Russia and restricted hiring, adding that it was in compliance with all applicable laws and regulations. The company also said it had contributed to humanitarian relief for Ukrainian refugees with a donation to the UNHCR and had organised the safety and support of its Ukrainian staff.
A spokesman said: “Faithfully to its values, Believe has pledged for peace and made the choice to continue to operate with its local artists, labels and partners in Russia and Ukraine.”
Sign up to the Front Page newsletter for free: Your essential guide to the day’s agenda from The Telegraph – direct to your inbox seven days a week.