The UK government has imposed sanctions on Evraz, the multinational steelmaker owned by billionaire Roman Abramovich, once considered Britain’s largest company.
The foreign ministry said Thursday that Evraz “works in sectors of strategic importance to the Russian government” and the action will “further complement Putin’s financial reserves and the siege economy and support Ukraine’s continued resistance.”
Evraz is headquartered in the Mayfair district of London, but has extensive mining and steel operations in Russia, with more than 70,000 employees.
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The United Kingdom and its allies, including the United States and the European Union, have used sanctions against Russian companies and businessmen as one of the main tools to respond to the Ukrainian invasion.
The Evraz measure is believed to be the first time a former FTSE 100 member has been subject to sanctions. This completes the fall from the grace of a company that was valued at more than £ 5 billion recently in January.
His membership in the index meant that shares in the company were held by a wide variety of investors managing retirement money, including BlackRock, Schroders Investment Management, Vanguard and Legal & General.
Evraz shares were suspended on the London Stock Exchange in March after the UK government emphasized its alleged strategic importance to Russia in imposing sanctions on Abramovich, who owns a 29% stake in the company. His board also resigned following sanctions against Abramovich.
Roman Abramovich, right, with former Evraz board member Alexander Abramov in Skolkovo, near Moscow, in 2009. Photo: Geert Groot Koerkamp / Alamy
The government in Abramovich’s sanctions claims that Evraz “potentially supplies steel to the Russian military that may have been used in the production of tanks.” This accusation, which was categorically denied by Evraz, was not included in the indication of the company’s sanctions on Thursday.
In a statement in March, Evraz said he did not expect the company itself to be sanctioned because Abramovich did not have “effective control”. He also denied that his steel had been used to build Russian tanks, saying he supplied steel only to the “infrastructure and construction sectors”.
However, Evraz signed a five-year deal in 2012 to supply railway wheels and metal to UralVagonZavod, a Russian company that is the world’s largest maker of battle tanks and produces the T-72 and T-90, both armaments in Ukraine today. A person familiar with the contracts said they contained provisions restricting them to civil use only.
A Evraz spokesman said: “Russia supplies long steel to the infrastructure and construction sectors for civilian use only.”
In a statement Thursday, the foreign ministry said: “Evraz AD produces 28% of all Russian railway wheels and 97% of Russia’s railways. This is vital as Russia uses rail to move key military supplies and troops to the Ukrainian front line.
He added that the new sanctions “will further deter companies operating in Russia’s strategic sectors”.
The sanctions include an asset freeze, which means that no UK citizen or company can do business with the company. However, the UK Sanctions Guidelines suggest that sanctioned companies are usually entitled to pay employees and cover other “basic needs” such as rent, utilities or property management costs.
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