MOSCOW. Aug 11 (Interfax) - The United States has added the co-owners of Alfa Bank to its sanctions list.
The restrictions affect Pyotr Aven and Mikhail Fridman, who according to the latest disclosures, owned 12.4% and 32.9% in the bank, respectively, through ABH Holdings.
The list also now includes German Khan and Alexei Kuzmichev, who were among the lender's co-owners until the spring of 2022.
The sanctioned individuals were or still are operating in the Russian financial sector and sit or sat on the supervisory board of Alfa Group, one of the largest financial and investment conglomerates in Russia, the U.S. Treasury's Office of Foreign Assets Control (OFAC) said in a statement. The businessmen have already been sanctioned by the European Union, Britain, Canada, Australia and New Zealand.
Aven is chairman of the board of directors in an unnamed Russian insurance company and a member of the supervisory board at Alfa Group, the Treasury said. Fridman formerly led the supervisory board of the Alfa Group he founded and is still involved with the company's operations. He is also head of the committee of the Russian Union of Industrialists and Entrepreneurs (RUIE) which has also been placed on the Treasury's list of Specially Designated Nationals on Friday.
Khan is a member of the supervisory board at Alfa Group and the chief executive of a Russian construction company, as well as a member of another company in the construction industry. Kuzmichev also sits on the supervisory board at Alfa Group and is head of a Russian equity firm.
In early March, it emerged that Fridman and Aven planned to sell their stakes in Alfa Group to their banking business partner Andrei Kosogov in order to secure relief from Western sanctions. The lender was valued at 178 billion rubles ($2.3 billion), the Financial Times reported, citing its sources.
It is expected that Kosogov will buy Alfa Bank from the Cyprus-based ABH Financial Ltd. (of which he is a beneficiary, alongside Fridman and Aven). The current ownership of Alfa Bank is unknown. At the time of the last disclosure, the final link in the bank's chain of owners was AB Holding, which is owned by ABH Financial Ltd.
According to AB Holding's 2022 report, a contract to buy 100% of the shares in Alfa Bank's parent company was signed back in February and is now awaiting regulatory approval in the EU and Russia.
In April, Alfa Bank board chairman Oleg Sysuyev told Interfax that its management were contemplating various options for "relocating" ownership, and hoped one would be found by September.
"We are now working towards finding the right mechanism. And there are several options (...) Generally speaking, our main objective is to achieve a re-domiciliation, to move to Russia. And in this sense, the deal among the shareholders is one, but not the only option. We are now thinking about which the options would pose the least risk or no risk from the standpoint of the legislation of, naturally, the Russian Federation in the first instance, and, naturally, of EU sanctions and laws," Sysuyev said.
Asked what the other options were, he said: "Let's say the European authorities give permission for relocation. For example, the Russian authorities order us to move. We are working on the options. Of course, we want to do this as quickly as possible, but I think it is best to look to the month of September, by September."
Alfa Bank confirmed that a deal was in the making, and the sides need to pass through a series of corporate and legal procedures. "Neither Andrei Kosogov, nor the seller are under sanctions, so there is the likelihood that no approval of the deal by foreign regulators will be necessary. One way or another, the deal will go ahead fully in accordance with all applicable laws. The chief outcome of the deal, should it go ahead, will be a Russian citizen and co-founder of Alfa Group, Andrei Kosogov, becoming the main owner of the bank," the bank said.
The deal is "beautiful on paper", because it is being carried out between non-sanctioned individuals, one of the Financial Times sources said. "Friedman and Aven rid themselves of sanctions, Kosogov receives the bank, and the bank has one, single Russian shareholder," the source explained However, the FT sources warn that completion of the transaction could be complicated owing to difficulties in obtaining regulatory approval from several jurisdictions.
"We are working as usual, this has no effect on the bank's operation," the bank's spokesperson told Interfax.