Yevtushenkov ceased to control AFK Sistema

Vladimir Yevtushenkov, who fell under sanctionsGreat Britain, ceased to be the controlling shareholder of AFK Sistema - its share decreased to 49.2%.He transferred 10% of the company to his son Felix Vladimir Yevtushenkov

The founder and largest shareholder of AFK Sistema, Vladimir Yevtushenkov, who fell under British sanctions on April 13, transferred 10% of its shares to his son Felix. As a result, the share of Yevtushenkov Sr. in the corporation decreased to 49.2%, and he ceased to be its controlling shareholder. This is stated in the message "System", received by RBC.

The share of Felix Yevtushenkov, who is a member of the Board of Directors and a senior managing partner of AFK, increased from 5.2% to 15.2%.

Sistema is an investment company with a diversified portfolio of assets in such industries as telecommunications (MTS), high technology (GC Element), banking services (MTS Bank), retail (until the fall of 2020 it owned Detsky Mir), e-commerce (Ozon), timber processing (Segezha Group), agriculture (Step agricultural holding), real estate, tourism and medical services (Medsi). The company was founded in 1993. Its revenue in 2021 amounted to 802.4 billion rubles, and total assets - 1.8 trillion rubles.

Will Sistema be saved by a change in the composition of shareholders

In connection with the imposition of British sanctions against Vladimir Yevtushenkov, Sistema reports that it will continue to "conscientiously fulfill its obligations to creditors, investors, employees and partners in full." “The restrictive measures imposed by the UK government against Vladimir Petrovich Yevtushenkov are personal in nature and do not apply to the corporation and other companies of the group,” Sistema emphasized.

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But due to "a significant degree of uncertainty" and a rapidly changing external environment, Sistema cannot "rule out the possibility of further material adverse effects on its operations and financial results from current or future external factors," the company said. Among such factors are listed: “changes in the macroeconomic situation”, “restrictions regarding business and trade relations”, “the possibility of further expansion of sanctions”.

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Felix Yevtushenkov doubled his stake in Sistema at the end of 2018, to 5%. In an interview with RBC in June 2021, Yevtushenkov Sr. said that he did not plan to further transfer shares of the corporation to him. “Many heads of Sistema's subsidiaries received shares in their companies. I thought that he [Felix] was working in good faith and was also entitled [to the shares]. And let him earn the rest, ”the businessman explained.

«Правило 50%» давно используется для подсанкционных лиц в США и означает, что санкции автоматически распространяются на активы, где доля лица под санкциями 50% и выше. В Великобритании и Евросоюзе правило осложняется понятием «контроль» наряду с владением. Так, согласно критериям Управления по имплементации финансовых санкций Великобритании (OFSI) лицо, даже снизив долю ниже 50%, может контролировать компанию. Это значит, что актив может попадать под ограничения, если будут выполняться критерии подконтрольности (например, наличие решающего влияния на бизнес компании, право назначения большинства в совете директоров).

This spring, the EU and the UK updated their interpretations of the rule, adding up the shares of sanctioned entities to determine if their company falls under the same restrictions. But in the British version, the interpretation is softer for companies where several shareholders are under sanctions. OFSI has stated that, unlike the EU and the US, it will not simply add up the shares of sanctioned persons and see if the combined share exceeds 50%. Even if the individuals under British sanctions collectively own more than half of the shares (but each of them owns less than 50%), such a company will not be subject to an asset freeze by default, the agency pointed out. This will require the fulfillment of a separate condition - "mutual agreements" of the parties, meaning joint control.

Who else is under UK sanctions?

On April 13, the UK expanded the sanctions list by adding 206 more Russian individuals and companies to it. In addition to Vladimir Yevtushenkov, the president and largest co-owner of LUKOIL Vagit Alekperov, the general DIRECTOR of Surgutneftegaz Vladimir Bogdanov, the former HEAD of Russian Railways Vladimir Yakunin, the former owner of the Northgas gas company Farkhad Akhmedov, the owner of the ESN group Grigory Berezkin, the ex-head of Ozon Alexander Shulgin , co-owner of the Polyus gold mining company Said Kerimov (the last three were included in the EU sanctions list on April 8). In addition, the president of the Alliance Group Musa Bazhaev, the wife of Gennady Timchenko Elena, the ex-wife of Mikhail Fridman Olga Aiziman and the sister of Alisher Usmanov Gulbahor Ismailova fell under British sanctions.

How businessmen relinquished control over assets

Vladimir Yevtushenkov is not the first Russian businessman who was forced to lose control of key assets after the start of Russia's military special operation in Ukraine and the imposition of personal sanctions.

For example, Andrey Melnichenko, immediately after being included in the EU sanctions list on March 9, ceased to control the Siberian Coal Energy Company (SUEK) and the fertilizer manufacturer Evrokhim. “After Melnichenko left the board of directors and the number of SUEK beneficiaries, his controlled share was reduced to 0%,” the SUEK press service said in a statement. As of the end of 2021, the businessman and his family indirectly owned 92.2% of the company. Who passed control over the company, SUEK did not report. RBC sent a request to Melnichenko's representative.

Kerimov lost control in the largest gold mining company in RUSSIA Business

Dmitry Mazepin, against whom European sanctions were also introduced, on March 11 handed over the shares of Uralchem ​​to the management. Said Kerimov, shortly before reports of possible imposition of EU sanctions, sold 30% of Russia's largest gold mining company Polyus to his father's partner Akhmet Palankoev, retaining 46.35% of its shares.

Aleksey Mordashov, who fell under EU sanctions, remained the main shareholder of his main asset, Severstal. As a result, its EXPORT to the EU was blocked. But on March 18, it became known that the businessman transferred a 29.9% stake in the German tour operator TUI to Ondero Limited, which is owned by Marina Mordashova, the mother of his four children. After that, the German authorities launched an investigation into the actual circumstances of this transaction - in particular, when it took place (before or after the imposition of sanctions) and whether there was a change in control over the block of shares. Until its completion, the TUI shares that Mordashova had passed were blocked. But on April 8, the EU introduced a clause into its regulations that Russian businessmen who fell under European sanctions can sell ownership rights to companies registered in the EU until October 9, 2022.