Business

Russian billionaire Roman Abramovich, owner of Chelsea football team, is being punished by the United Kingdom

LONDON (Reuters) – The British government has stepped up pressure on Kremlin-linked businessmen by imposing sanctions on a handful of Russian oligarchs, including Roman Abramovich, the billionaire owner of British football club Chelsea FC.

It was the first time any Western government had taken action against Mr Abramovich. His trophy assets, including Chelsea, high-quality London fortunes and large yachts, helped him become one of the leading oligarchs now facing control by officials following Russia’s invasion of Ukraine.

The United States, the United Kingdom and the European Union have spearheaded global efforts to punish and pressure Russian President Vladimir Putin into a series of sanctions on the country’s banks and central bank, as well as restrictions on oil markets in some cases and targeting the assets of Putin’s associates, Russian government officials and businessmen considered close to Moscow.

The UK government said Thursday it was imposing sanctions on Mr Abramovich over his “preferential treatment and concessions from Putin” and said a UK-owned steel company partly supplying steel to the Russian military. A spokeswoman for Mr Abramovich did not respond to a request for comment.

Mr Abramovich has a net worth of 9 9.4 billion, equivalent to $ 12.4 billion, the British government has said. His assets in the UK will now be frozen and he will be banned from traveling to Britain, the government has said. Mr Abramovich has already stated that he is in the process of trying to sell Chelsea and a person familiar with the matter has said that he has marketed his London property.

The government has said it will provide special permission to allow Chelsea to continue operating despite sanctions. Sales of Mr Abramovich’s club and homes are now blocked. The UK Treasury must authorize to allow any sale to take place. Mr Abramovich will not have the right to receive revenue from the sale, according to the government.

Sanctions effectively deport Abramovic: He can not pay for electricity on his property or buy a cup of coffee in the UK, officials said.

The UK has also announced a series of sanctions against several other Russian oligarchs, including tycoon Oleg Deripaska. Igor Sechin, CEO of Rosneft. Andrey Kostin, President of VTB Bank. and Alexei Miller, CEO of Russian energy giant Gazprom.

The announcement marks the highest profile sanctions in the UK to date. Representatives of these individuals were not immediately available for comment.

Since Russia invaded Ukraine in late February, the United States and its allies have imposed severe sanctions on Russia. The WSJ’s Shelby Holliday examines how these sanctions affect everyone, from President Vladimir Putin to everyday Russian citizens. Photo: Pavel Golovkin / Associated Press

The UK’s agencies, like those of other governments, including the US, have the power to temporarily seize the assets of individuals or entities under their jurisdiction without proving criminality. Landlords are usually barred from selling or profiting from them until the sanctions are lifted or successfully challenged. However, governments usually can not move to acquire ownership of the assets, except for often lengthy legal proceedings that would require proof of breach of the law. The UK government, however, is considering laws that would give it the power to seize assets that are subject to sanctions.

Across the West, Russian oligarchs are facing an unprecedented coordinated attack on operations they set up in the wake of the collapse of the Soviet Union. Anger over the invasion of Ukraine – and the hope that sanctions could push Mr Putin to change course – has sparked a hunt for the assets of these oligarchs by the US, British and European governments. London has become the focus of control.

Since the mid-1990s, he has been a welcome recipient of Russian investment. However, in the wake of the invasion of Ukraine, the British Parliament is passing an emergency law to facilitate the freezing of assets of those with ties to the Kremlin. British Foreign Secretary Liz Tras said this would allow the country to impose sanctions on hundreds by March 15.

“There can be no safe haven for those who supported Putin’s brutal attack on Ukraine,” said British Prime Minister Boris Johnson.

The British government had recently been criticized for failing to impose several sanctions on oligarchs, giving them space, critics said, to sell assets or transfer them to associates. British officials had previously stopped imposing sanctions on Mr Abramovich and Mr Deripaska, in part because of skepticism about protracted legal battles, officials said. New laws coming into force next week will limit the amount of compensation the government is required to pay if people sue for sanctions.

Representatives of Mr Deripaska and United Co. Rusal PLC, the aluminum giant it owns in part, was not immediately available for comment. Mr Deripaska has not been in London for more than two years, said one person familiar with the matter. Mr Abramovich once maintained a relatively high profile in London, watching Chelsea games, for example. We have rarely seen him here in recent years.

Emphasizing the difficulties that the authorities may have in seeking the property of the oligarchs, many belong to a family or through a complex system of offshore companies. The house used by Mr Deripaska in the exclusive Belgravia area of ​​London is owned by a family member, according to a person familiar with the matter.

Oligarch Alexey Mordashov, who has been sanctioned in the European Union but not in the United Kingdom, transferred control of his majority stake in the British-based mining company Nord Gold PLC to his wife, according to company records, days after Mr Putin ordered troops in Ukraine. Nord Gold declined to comment.

Mr Mordasov said in a statement that “there is absolutely nothing to do with the current geopolitical tension and I do not understand why the EU has imposed sanctions on me.” A spokeswoman declined to comment further.

Mr Abramovich has sold out many of his first business interests, which included an energy giant now owned by gas company Gazprom. Mr Abramovich, however, still owns about 2% of MMC Norilsk Nickel PJSC, one of the world ‘s largest producers of critical minerals, and 29% of Evraz PLC, a London – based steel and mining company with operations in Russia. , the US and elsewhere. The United Kingdom said on Thursday that Evraz was supplying steel to the Russian military. Mr Abramovich has also invested in a number of start-ups, according to a source familiar with the matter.

The UK Financial Conduct Authority has said it has temporarily suspended Evraz from trading pending clarification of the effects of the UK sanctions. Later Thursday afternoon, Evraz said he did not believe the sanctions against Mr Abramovich applied to the company. He said that in the last five years, two directors have been appointed by Mr. Abramovich and that, therefore, he does not consider him as a person who exercises effective control over the company. Evraz said it supplies steel only in the infrastructure and construction sectors.

Mr Abramovich’s acquisition of Chelsea in 2003 marked the beginning of a wider upheaval in London. He bought a lot of luxury real estate, including a 15-bedroom mansion on a London street called the “Millionaire Series”. He has also bought many works of art and one of the largest yachts in the world.

SHARE YOUR THOUGHTS

Will sanctions against Russian oligarchs be effective in pressuring Vladimir Putin to end the war? Take part in the discussion below.

This 553-foot yacht, called the Eclipse, is currently located near Philipsburg, in the Netherlands Antilles, in the Caribbean, according to FleetMon and MarineTraffic. Another of his yachts, the 460-foot My Solaris, set sail earlier this week from Barcelona, ​​where it was moored for three months, according to tracking sites. As of Thursday, the ship was sailing south of the port of Ragusa in Sicily.

Mr. Abramovich, a college dropout who was orphaned at a young age, was making money in the oil business. He combined forces with Boris Berezovsky, a mathematician who became a businessman with close ties to former President Boris Yeltsin. The two merged their oil interests to form OAO Sibneft, which was later privatized.

The deal turned Mr Abramovich into a multi-billionaire. After the creation of Sibneft,

went on to help establish Rusal, the second largest aluminum group in the world.

The UK government has said Mr Abramovich and Mr Putin have had a close relationship for decades and that the tycoon has benefited financially from that relationship. This included tax breaks received by companies affiliated with it, buying and selling shares from and to the Russian state at favorable prices, and contracts received by its companies ahead of the 2018 FIFA World Cup, the government said.

Corrections & Aid
Roman Abramovich acquired Chelsea in 2003. An earlier version of this article mistyped the name of the football team as Chelsea. (Corrected on March 10)

I write to you Max Colchester at max.colchester@wsj.com

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Russian billionaire Roman Abramovich, owner of Chelsea football team, is being punished by the United Kingdom

Source link Russian billionaire Roman Abramovich, owner of Chelsea football team, is being punished by the United Kingdom

Back to top button