Truphone part-owner Roman Abramovich was among several Russian oligarchs sanctioned by the UK government today.
Abramovich accumulated much of his fortune after the collapse of the Soviet Union, purchasing major assets at prices critics say were well below market value through Russia’s controversial loans-for-shares privatisation programme.
He served as governor of the Chukotka Autonomous Okrug from 2000 to 2008 and has long been described as a close associate of senior Russian political figures. While Abramovich denies having strong ties to President Vladimir Putin, the UK government’s sanction document states he has enjoyed a “close relationship for decades” with the Russian leader and has allegedly derived “financial or other material benefit” from that connection.
Following the Russian invasion of Ukraine, Abramovich’s links to the Kremlin and the origin of his wealth have come under intensified scrutiny.
Foreign Secretary Liz Truss said the latest measures send a clear signal: oligarchs and kleptocrats with close links to Putin have no place in the UK economy or society and are complicit in the aggression against Ukraine. She added that the government will continue to increase pressure on the Putin regime to cut off funding for its military actions.
In the UK Abramovich is best known as the owner of Chelsea Football Club. Last week he announced plans to sell the club after almost 20 years of ownership and stated that the proceeds would be donated to “all victims of the war in Ukraine.” However, following the sanctions he will no longer be able to raise funds through a sale of the club. Ticket sales and other transactions have been restricted, though matches may continue under a special licence intended to protect fans while preventing sanctioned individuals from bypassing restrictions.
Abramovich invested £70 million in Truphone in 2013, acquiring a part-ownership stake. We contacted Truphone for comment on how the UK sanctions might affect the company and whether it plans to sever ties. Rachel Chapman, General Counsel at Truphone, said: “We are aware that sanctions were imposed on 10 March by the UK Government on Roman Abramovich, who has an indirect link to Truphone. However, Mr Abramovich does not have a relevant ‘interest’ for the purpose of UK sanctions legislation in Truphone. This means the Truphone business can continue to operate as usual. It should be emphasised that Truphone is not subject to any sanctions. We are taking legal advice and constantly monitoring the situation.”
Abramovich’s investment vehicle, Minden Worldwide, holds a significant stake in Truphone and participated in a further £30 million funding round last year. Another vehicle, Vollin Holdings, joined Minden in providing much of that capital. Reports indicate entities linked to Abramovich controlled more than 80 percent of Truphone at the time of a 2018 funding round.
Last month Truphone entered an MVNO partnership with BT Wholesale. We asked BT Wholesale whether it will reassess that relationship while sanctions on Abramovich remain in effect. A BT spokesperson responded: “We continue to monitor closely the international sanctions that have been announced to date, and their impact on our relationships with suppliers and customers. This is a fast-moving situation, so we’ll be keeping our relationship with any potentially impacted customers and suppliers under review and are in discussions with them around the latest developments.”
BT also issued a broader statement on the crisis in Ukraine and the actions it is taking: “We strongly condemn the invasion of Ukraine, and our thoughts are with all those impacted. We have made calls, texts and data to and from Ukraine free for our UK customers so they can contact loved ones, and we are in regular contact with colleagues in the region to ensure their safety and wellbeing. We are also working with UNICEF to direct BT fundraising towards victims of the conflict. To date, there has been no direct impact on the services we provide, and we will comply with all related sanctions. We have implemented targeted security monitoring and protection, and we are working with government and industry partners to ensure we have full visibility of the latest developments. We are keeping our approach under constant review and will take further steps as required.”
The UK announced sanctions on six other prominent Russian figures today:
- Oleg Deripaska (investor in En+ Group)
- Igor Sechin (Chief Executive of Rosneft)
- Andrey Kostin (Chairman of VTB Bank)
- Alexei Miller (CEO of Gazprom)
- Nikolai Tokarev (President of Transneft)
- Dmitri Lebedev (Chairman of the Board of Directors of Bank Rossiya)
Prime Minister Boris Johnson said there can be no safe havens for those who have supported Putin’s assault on Ukraine, describing the sanctions as part of the UK’s ongoing support for the Ukrainian people and its determination to pursue those who enable attacks on civilians and unlawful occupation of sovereign territory.
11/03 update: Added BT’s statement on how the latest sanctions may affect its relationships with potentially impacted partners such as Truphone.
11/03 update: Added Truphone’s statement regarding whether sanctions on Roman Abramovich will affect its business.
(Image Credit: Truphone under CC BY-SA 4.0 license)
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