LetterOne failed to pay approximately $300 million to Aven and Fridman due to sanctions.

Investment group LetterOne has deferred approximately $300 million in unpaid dividends after Western sanctions prevented it from paying them to Russian bankers Mikhail Fridman and Petr Aven, the Financial Times (FT) reported.

LetterOne, whose assets include retailer Holland & Barrett and mobile operator Turkcell, was unable to pay most of the money because its two co-founders, Fridman and Aven, were sanctioned in 2022, preventing them from receiving payments.

According to the FT, the amount of the payment due to them consists of a $200 million dividend approved at the company's annual meeting in February 2024  and part of an earlier payment of $172 million approved in 2022. This is reflected in the company's reports filed last month, the publication notes.

$68 million of the $172 million approved for distribution in 2022 was “disbursed before the EU and UK sanctions date,” meaning that approximately $104 million of that amount remains undisbursed.

"The declared dividends are linked to L1's performance for the 2021 financial year. L1 is legally obligated to defer and freeze the portion of these dividends due to sanctioned individuals," LetterOne told the FT.

Fridman and Aven founded the company in 2013 together with business partners German Khan and Alexey Kuzmichev. LetterOne changed its board structure after the imposition of sanctions. Aven and Fridman's shares were frozen, and both are no longer involved in the company's operations. However, they retained their stakes in the company.

Following the military operation's launch in 2022, Aven and Fridman were sanctioned by the European Union (EU) and the United Kingdom . The EU's official publication on the restrictive measures claimed that Aven "benefited from his connections in government" and Fridman "managed to establish strong ties with Vladimir Putin's administration." These measures include a freeze on their assets in the EU and a ban on entry into EU countries.

Businessmen called the decision unfounded. In May 2022, they filed lawsuits against the Council of the EU in the COURT of Justice of the European Union.

In April 2024, the Court ordered the lifting of sanctions in force from February 2022 to March 2023, finding that the EU Council, when imposing them, had failed to provide convincing evidence of Aven and Fridman's involvement in supporting the Russian authorities. The documents on which the restrictions were based stated that the businessmen "supported" Russian officials involved in destabilizing the situation in  Ukraine , as well as "supported" measures and policies that undermine Ukraine's sovereignty and territorial integrity. The Court's opinion noted that the EU Council's initial arguments were insufficiently substantiated.

In March 2023, the EU Council revised the grounds for maintaining sanctions against Aven and Fridman, making them more formal: they were now considered "leading entrepreneurs involved in sectors of the economy that provide a significant source of income to the Government of the Russian Federation." Both businessmen remain on the EU and UK sanctions lists.

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