Russian oligarchs Friedman and Aven sell shares in Alfa-Bank to get rid of sanctions - FT
Kyiv • UNN
Russian billionaires Friedman and Aven sold their stakes in Alfa-Bank to their partner Kosogov for 240 billion rubles. The sale of assets was made in order to challenge EU sanctions imposed over the war in Ukraine.
Billionaires Mikhail Fridman and Peter Aven, who are under EU sanctions, have sold their stakes in Alfa-Bank and Alfa Insurance to their longtime partner Andrey Kosogov. This is reported by the Financial Times, UNN reports.
Sanctioned billionaires Mikhail Fridman and Pyotr Aven have sold their stakes in Russia's largest private bank and its insurance unit in an effort to get the EU restrictions lifted.
According to the Financial Times, Friedman and Aven last year finalized a deal that was made in 2023, transferring Alfa-Bank and Alfa Insurance to their longtime partner Andrei Kosogov. The deal is estimated to be worth about 240 billion rubles (about $2.5 billion). Both oligarchs owned 45% of the bank and 42% of the insurance company.
Kosogov, who was not sanctioned, previously had a smaller stake in Friedman and Aven's business empire. However, after buying out their assets, he became the largest shareholder in Alfa-Bank and the investment conglomerate LetterOne.
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Friedman and Aven hope that the sale of assets, which was accelerated by the Russian government's interference in the ownership of "economically significant" companies, will help them challenge EU sanctions imposed in response to Russia's full-scale invasion of Ukraine. In 2023, the EU General Court partially lifted the sanctions against them, stating that there was insufficient evidence of their influence on the war. This was one of the biggest blows to the EU sanctions regime against Russia.
Nevertheless, the restrictions remain in place on another basis - their status as "key businessmen involved in an economic sector that generates significant revenue for the Kremlin." Friedman and Aven are appealing this decision, and if the court upholds their position, the EU may either lift the sanctions or find another justification for their continuation.
The UK and EU sanctions also forced Friedman, Aven, and their former partners Herman Khan and Alexei Kuzmichev to cede control of LetterOne and leave the company's board of directors.
Kosogov, who previously ran Alfa's investment arm, strengthened his position back in 2022 when he bought out Khan and Kuzmichev's stakes in Alfa-Bank and LetterOne. At the same time, they loaned him $7 billion in funds for this deal and agreed on a 10-year buyback option.
Kosogov subsequently acquired Friedman and Aven's stakes in Alfa-Bank through a Cypriot holding company, using a loan from state-owned Gazprombank. However, the process was delayed due to the need to obtain a permit from the Cypriot regulator, which drew criticism from the bank's parent company in Luxembourg.
In response, Russia passed a law allowing the state to change the jurisdiction of "economically significant" companies. In March 2023, the Russian government added Alfa-Bank, Alfa Insurance and the X5 retail group founded by Friedman to this list. Two months later, a Russian court transferred ownership of the bank and insurance company to Friedman and Aven or their buyers, effectively depriving the Luxembourg-based parent company of control over these assets.
Although Cyprus had approved the deal in July, the Russian authorities' decision made it moot, as Friedman and Aven no longer needed EU approval to transfer their assets.
Experts note that this process ties the owners of the companies even more closely to the Kremlin regime, allowing them to pay dividends and protecting them from asset seizures under sanctions.
Friedman and Aven declined to comment. Kosogov also did not answer journalists' questions.
Recall
In 2023, the United States imposed new sanctions against four Russian billionaires, including Peter Aven and Mikhail Fridman.
Later, the Security Service of Ukraine put Friedman on the wanted list .