Barloworld, led by Dominic Sewela, extends probe into Russian operations

Key Points

• Barloworld extended its internal probe into Russian export control breaches through Sept. 2025 amid complex geopolitical and regulatory challenges.
• Revenue from its Russian unit VT plunged 37% as sanctions hit; the unit nears break-even but may face job cuts.
• A Zahid Group-led buyout could see Barloworld delist from JSE, with nearly 47% shareholder support including backing from South Africa’s PIC.

Barloworld Group, the South African industrial conglomerate led by Dominic Sewela, is extending its investigation into potential export control violations involving its Russian subsidiary, Vostochnaya Technica (VT).

The internal probe, which began in 2024, will now run through September 2025, reflecting the growing complexity of navigating global trade regulations during a time of geopolitical strain.

The company first raised the issue in September last year when it voluntarily reported a possible breach to the U.S. Bureau of Industry and Security. The case centers on the sale of certain goods to VT, and Barloworld has since been working with U.S. legal advisors and independent forensic experts to examine the matter thoroughly.

A long process, complicated by geopolitics

Sandile Langa, Barloworld’s head of legal, said the extension was granted by U.S. authorities who recognized the company’s commitment to transparency and compliance. “They see we’re taking this seriously and doing all we can to get it right,” Langa told investors during the group’s interim results presentation.

The investigation comes at a time when multinational companies are under mounting pressure to ensure their operations don’t run afoul of expanding sanctions and tighter export controls, particularly when it comes to dealings with Russia. VT, which has faced a steep market decline due to these sanctions, is still operating—though under pressure.

Sewela noted that the Russian unit is nearing break-even and now focuses mainly on selling parts that fall outside the scope of current restrictions. “The business is still cash-positive and managing on its own. But with the market shrinking, we may need to reduce staff if profitability continues to slip,” he said.

Financial strains and strategic moves

Despite its challenges abroad, Barloworld remains one of South Africa’s most established industrial players. Founded in 1902, the company’s operations span equipment distribution, industrial services, and logistics. Sewela, who owns a 0.23 percent stake in the company worth over $2 million, has a clear personal stake in steering it through uncertain times.

For the first half of fiscal 2025, Barloworld reported a 5.8 percent drop in overall revenue to R18.1 billion ($1 billion). Revenue from VT fell nearly 37 percent, while the group’s Southern Africa Equipment division also slipped 6 percent.

Still, there’s strong support behind the leadership team. The Public Investment Corporation (PIC), South Africa’s largest asset manager, has backed both Sewela and the company’s proposed privatization—bringing total shareholder support to nearly 47 percent. A buyout offer led by Saudi Arabia’s Zahid Group is also on the table and could lead to Barloworld’s delisting from the Johannesburg Stock Exchange.