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 Justice Department announced a new team, known as Task Force KleptoCapture, which Attorney General Merrick 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 Sechinthe head of the Russian oil giant Rosneft, while Germany is said to have taken a yacht owned by businessman Alisher Usmanov. (Marine tracking now shows at least five yachts owned by oligarchs around the Maldiveswhich does not have an extradition treaty with the United States.)
Japan said on Thursday it would freeze assets linked to the oligarchs, matching Western stocks.
Britain said it was studying how to seize the properties of the oligarchs and that it publish a list individuals and groups linked to Mr. Putin, including those not subject to formal sanctions, in an effort to discourage anyone from doing business with them.
Private groups are also lobbying. Vladimir Potanin has resigned as administrator of the Guggenheim museum, while some in the art world call for a Boycott of Phillips Auction House, which belongs to the Russian group Mercury. The English football club Everton suspended sponsorship deals with companies linked to Mr. Usmanov.
The sudden push to sell Chelsea FC is a telltale sign. The owner of the English professional soccer club, Roman Abramovich, confirmed on Wednesday that he was trying to sell the club he had owned since 2003, with a reported price of at least $2.5 billion, days after the 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 US not to impose penalties.)
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 eschew anything Russian, they seem to be thinking twice about even the most discounted assets.