On Tuesday, May 3, 2022 at 12:29:31 AM UTC+8, David P. wrote:
> The Russian Oligarch With the Most to Lose
> By Angel Au-Yeung and Stu Woo, Apr. 20, 2022, WSJ
>
> In late December, brothers Nikita and Kirill Mordashov did
> as their father asked and transferred their shares in a
> mining company to the Russian oligarch. Alexey Mordashov
> had given his children stakes in the family business as part
> of a succession plan but decided they weren’t quite ready,
> according to a person close to him.
>
> Two months later, after Russia invaded Ukraine, Mordashov
> was racing to get those shares off his hands again. This
> time, he transferred a roughly $1 billion stake to Marina
> Mordashova, the mother of four of his other children,
> according to public documents and the person close to the
> oligarch. Later that day, the European Union froze his
> European assets.
>
> Western governments have levied a barrage of sanctions
> targeting Russian tycoons with penalties meant to strip
> away their wealth and financially isolate them. Governments
> hope they might pressure Russian leader Vladimir Putin into
> ending the war.
>
> Mordashov, 56, has more at stake than most of his peers.
> One of Russia’s richest men, his net worth is higher than
> that of any individual on the EU’s sanctions list, according
> to the Bloomberg Billionaires Index. His fortune centers on
> his 77% stake in Severstal PAO, among the world’s biggest
> steelmakers, which sells its products all over the world,
> particularly in Europe, where it has a large staff and
> operations. It has long depended on global financing to keep
> operating, a channel now under threat from sanctions.
>
> Unlike other oligarchs, who have either embraced sanctions
> as a badge of honor or tried to pivot away from pariah status,
> Mordashov has decided to try to manage through the mess.
>
> He has moved to protect his large Western shareholdings
> while taking steps to focus his steelmaking business on new
> markets in Asia and Africa. He is pursuing legal waivers in
> the U.S. and U.K. that would allow Severstal to make debt
> payments to bondholders, according to an announcement the
> company filed with the London Stock Exchange—a move the
> company hasn’t been able to do since sanctions were levied.
>
> In announcing its sanctions, the EU said Mordashov “is
> benefiting from his links with Russian decision makers.”
> The U.K. followed the EU and sanctioned him and several other
> oligarchs on March 15, resulting in a combination of penalties
> that froze their assets and made it difficult for their
> businesses to operate across Europe. The U.S. Office of
> Foreign Assets Control hasn’t sanctioned him; the office
> declined to comment.
>
> Mordashov had fashioned himself an apolitical businessman
> who kept the Kremlin at arm’s length, said the person close
> to him. He had dedicated much of his career pushing Russia
> toward the West. The fluent English and German speaker had
> lobbied for Russia’s entry into the World Trade Organization
> and once led a Brussels-based global steel trade group. He
> had paid tuition for 200 of his employees to go to business
> school in England.
>
> The sanctions lumped him together with oligarchs like Igor
> Sechin, chief of Russian oil producer Rosneft. After the
> U.S. targeted Mr. Sechin in 2014 over Mr. Putin’s annexation
> of Crimea, Mr. Sechin had said Washington’s action was a sign
> he was doing his job. Mr. Sechin is now under the new EU and
> U.K. sanctions. Rosneft didn’t respond to requests for comment.
>
> On the evening the EU sanctioned him, Mordashov issued a
> statement saying he has never been close to politics and
> didn’t see how sanctioning him would help solve the Ukraine
> conflict. Without mentioning Mr. Putin, he called what was
> happening in Ukraine “a tragedy for two fraternal nations”
> and said he hoped the “bloodshed” would end soon.
>
> Since Feb. 18, he has lost about a quarter of his wealth,
> which Bloomberg now estimates at $22 billion.
>
> Through a family spokeswoman, Mordashov, his sons Nikita
> and Kirill, and Ms. Mordashova declined to be interviewed
> for this article.
>
> Leaning West
> --------------
> Mordashov’s career has been characterized by his success
> navigating Russia’s postcommunist chaos while embracing
> Western markets and business management.
>
> He was born north of Moscow, where his parents worked at a
> steel mill. He secured a postcollege job at the mill as an
> economist and, in 1992 at age 27, became its chief financial
> officer. One of his priorities was fending off Moscow-based
> tycoons targeting the mill during Russia’s upheaval toward
> capitalism, he told The Wall Street Journal in 2004.
> Mordashov and his peers set up a company that bought steel
> from the mill and resold it, using the proceeds to buy shares
> of Severstal, which means Northern Steel in Russian.
>
> He became CEO in 1996 and by the early 2000s was among
> industrialists who regularly met with Putin. Yet Mordashov
> has said he was different from other oligarchs because he
> had few political connections. “We never had any high-placed
> patrons in the govt,” he said in the 2004 Journal profile.
>
> He also leaned West, hiring McKinsey & Co. to find bottlenecks
> in Severstal and encouraging employees to go to business school
> at England’s Northumbria University, his alma mater. Anders
> Aslund, an adviser to Russian and Ukrainian governments in the
> 1990s, recalled Mr. Mordashov speaking at a Moscow university
> in the early 2000s about hiring McKinsey and getting mobbed by
> students afterward. “He was treated like a rock star,” Aslund said.
>
> In 2006, Mordashov saw a chance to bridge his Russian and Western
> business worlds after Indian-owned Mittal Steel made a hostile bid
> for Luxembourg-based rival Arcelor. He met Mr. Putin and won his
> blessing for a counterbid, the Journal reported that year. Arcelor’s
> chairman, making a case to shareholders to accept Severstal’s offer,
> called Mr. Mordashov a “true European,” noting his English and
> German proficiency.
>
> Mittal eventually outbid Mordashov, who then pursued smaller deals,
> including buying an ArcelorMittal facility in Maryland for
> $810 million in 2008.
>
> He was “really a Western-style manager,” said Michael Harms,
> head of the German-Russian Chamber of Commerce from 2007 to 2016.
> “That’s why the sanctions on him are not wise and also not fair,
> because he was one of the best representatives of the modern face
> of Russian business.”
>
> Mordashov retreated from the U.S. after Moscow annexed Crimea in
> 2014. That year, he sold two major U.S. steel mills for a combined
> $2.3 billion. Four years later, the U.S. sanctioned one of his
> companies for assisting in delivering turbines to Crimea. In Europe,
> he gradually built a stake in German travel giant TUI AG, becoming
> its biggest shareholder. During the pandemic-triggered global travel
> collapse, he put up more capital to bolster TUI financing.
>
> Succession issues
> ----------------
> The oligarch recently began setting up a second generation of
> Mordashovs to play a leading role in his empire. He is father of
> seven children from three mothers, said the person close to him.
> In 2019, he transferred significant stakes in TUI and Nord Gold,
> which had been spun off from Severstal, to sons Nikita and Kirill.
>
> On Dec. 28, 2021, both brothers transferred their Nold Gold stakes
> back to their father, according to U.K. records. That day, the pair
> also sold their TUI shares back to their father, public records show.
>
> Mordashov had asked them to make the move, feeling Nikita, now 21,
> and Kirill, now 22, weren’t mature enough to hold such stakes, the
> person close to him said.
>
> In late February, Mordashov’s business lieutenants told him news
> reports suggested the EU was about to sanction him, the person
> said. He transferred stakes in Nord Gold to Ms. Mordashova,
> according to U.K. records. He transferred the TUI shares from
> subsidiaries he controlled to an entity named Ondero Ltd., TUI
> said in a press release. A TUI spokesman declined to comment.
> Nord Gold didn’t respond to requests for comment.
>
> On Feb. 28, the EU announced sanctions against Mordashov and
> other oligarchs. It cited his role as head of Severgroup, an
> entity owning 5.4% of Bank Rossiya, alleged by Western officials
> to be the personal bank of senior Russian officials. The EU said
> Bank Rossiya also opened branches in the Ukrainian region of
> Crimea, helping Russia consolidate the area it illegally annexed.
> Brussels said Severgroup had significant stakes in a media group
> controlling television stations that support Moscow’s attempts
> to destabilize Ukraine.
>
> Mordashov’s spokeswoman said that his stakes in Bank Rossiya
> and the media group are minor, and that he isn’t involved in
> day-to-day decision-making at either organization. Bank Rossiya
> didn’t respond to requests for comment.
>
> On March 3, Mordashov held a virtual town-hall meeting from
> Moscow for Severstal employees, according to a summary of the
> meeting that Severstal posted on social media. He said the
> company didn’t plan to lay off any employees and was in a
> stable financial position.
>
> Severstal lawyers started work applying for a special license
> from the U.K. and the U.S. Office of Foreign Assets Control to
> let its bank, Citigroup Inc., transfer funds to pay interest
> to bondholders, said the person close to Mr. Mordashov.
> Severstal also announced its applications in a statement to
> the London Stock Exchange on April 1. While the U.S. hasn’t
> sanctioned Mr. Mordashov, Severstal said that Citigroup froze
> the payments due to regulatory investigations.
> Citigroup declined to comment.
>
> The share price of Severstal, which previously did significant
> business in EU countries such as the Czech Republic, Italy and
> Poland, has fallen by about a third since Russia invaded Ukraine.
>
> On March 18, TUI said it was informed that Ondero, the entity
> to which Mordashov transferred his shares, was controlled by
> Ms. Mordashova, the mother of four of Mordashov’s children.
> It said that the German Federal Ministry for Economic Affairs
> and Climate Action was investigating the transaction, which
> would be invalid until at least the end of the probe.
>
> A spokeswoman for the German agency said it was conducting an
> investment-screening procedure relating to TUI. Without
> disclosing the individuals involved, she said the probe was
> unrelated to sanctions but rather an investigation into whether
> the transaction threatens Germany’s public order or security.
>
> Italian authorities said they seized one of Mordashov’s yachts,
> the 213-foot Lady M, as well as property on the Mediterranean
> island of Sardinia. Late last month, the 465-foot megayacht
> Nord, equipped with two helicopter pads, a cinema and swimming
> pool—the person close to Mr. Mordashov said it belongs to the
> oligarch—completed its three-week journey from the Seychelles
> in the Indian Ocean to Vladivostok, a far-eastern Russian city
> near the Chinese and North Korean borders.
>
> Locals have been visiting the harbor and posting selfies
> with the vessel on social media.
>
> https://www.wsj.com/articles/russia-oligarch-mordashov-sanctions-ukraine-11650309587
> ---