International pressure forces Russian oligarchs to sell assets
With the crisis in Ukraine escalating, the United States and its allies are putting increased economic pressure on Russian President Vladimir V. Putin’s main allies: the Russian oligarchs.
But as governments around the world attempt to seize or freeze the vast and expansive assets of these billionaires, they are finding that a comprehensive crackdown is not easy, notes the DealBook newsletter.
The Department of Justice announced a new team, known as Task Force KleptoCapture, which Attorney General Merrick B. Garland said will pursue the assets of “those whose criminal acts enable the Russian government to continue this unjust war. “. Other countries have also taken new measures:
France said it had seized a yacht owned by Igor Sechin, the head of Russian oil giant Rosneft, while Germany reportedly took a yacht belonging to businessman Alisher Usmanov. (Maritime tracking now shows at least five yachts belonging to oligarchs around the Maldives, which do not have an extradition treaty with the United States.)
Japan said on Thursday it would freeze assets linked to oligarchs, which is consistent with Western stocks.
Britain said it was studying how to seize the properties of oligarchs and would publish a list of people and groups linked to Mr Putin, including those who are not subject to formal sanctions, in a bid to discourage anyone to do business with them.
Private groups are also lobbying. Vladimir Potanin has resigned as administrator of the Guggenheim museum, while some in the art world are calling for a boycott of the Phillips auction house, which is owned by the Russian group Mercury. English football club Everton have suspended sponsorship deals with companies linked to Mr Usmanov.
The sudden push to sell Chelsea FC is a telltale sign. English professional soccer club owner Roman Abramovich confirmed on Wednesday that he was trying to sell the club, which he has owned since 2003, with a reported price of at least $2.5 billion, days after British lawmakers debated whether he should face sanctions. . (Mr. Abramovich, who made his fortune in post-communist privatizations of Russia’s oil and industrial sectors, has denied any connection to Mr. Putin. The Israel Holocaust Museum is among those urging the United States not to not impose sanctions on him.)
What price Mr. Abramovich and other oligarchs will get for their assets is unclear. A potential bidder for Chelsea, Swiss billionaire Hansjörg Wyss, said $2.5 billion was “way too much”. Another possible buyer for the club, US investor Todd Boehly, reportedly offered $2.9 billion in 2019 – far more than he is likely to offer now. (Raine Group, the bank responsible for selling Chelsea, has its work cut out.)
Mr Abramovich said the sale of Chelsea ‘will not be expedited but will follow due process’. As investors shun all things Russian, they seem to be thinking twice about even the most discounted assets.