Russia’s billionaire Alexei Mordashov has resigned from the board of German tour operator TUI, which is franchised in the Baltics by TT Baltics, as the European Union (EU) imposes sanctions on him over Moscow’s attack on Ukraine.
Mordashov, who owns a controlling stake in Russia’s second-largest steel company Severstal, is a major shareholder in FDI because his indirectly controlled company, Unifirm Ltd. owns 34% of FDI shares. At the same time, according to Firmas.lv, Mordashov is the only real beneficiary of TT Baltics.
“The purpose of EU sanctions is to prevent Mordashov from disposing of his FDI shares” or making a return on his investment in the company, “the FDI said in a statement.
Mordashov has been a shareholder in FDI for 15 years. He increased his stake last year as FDI recapitalized to try to recover from the coronavir pandemic.
FDI, meanwhile, is trying to distance itself from the sanctions imposed on Mordashov.
“EU sanctions apply to Mordashov as a person and not to TUI AG, of which he is a shareholder. Thus, these sanctions do not affect the company in which he holds shares,” the company explains.
Sanctions against oligarchs and propagandists close to Russian President Vladimir Putin in connection with Russia’s aggression against Ukraine have already entered into force on Monday, 28 February, with the publication in the EU’s Official Gazette. Mordashov is also among these individuals.
In a statement released on Monday, Mordashov said he had “absolutely nothing to do with the current geopolitical tensions” and did not understand why the EU had imposed sanctions on him.
At the same time, according to Kommersant, Severstal has completely stopped exporting steel products to EU countries. Severstal’s management declined to comment on the information, but said the company was considering various options to reorient its European market to other export markets, including Asia, North America and the Middle East.
The metal processing and metal wholesale company “Severstal Distribution” operates in Latvia, the owner of which is 100% owned by “Severstal”.
According to the information on the company’s website “Severstal Distribution” and also “TT Baltics” there is an account in the bank “Citadele”.
Uldis Upenieks, a member of the Board of Citadele Bank on compliance issues, previously informed that in providing financial services, the Bank fully complies with international, national and US Foreign Assets Control (OFAC) sanctions in accordance with regulatory requirements.
At the same time, he stressed that the bank can not comment on a particular customer’s relationship with the bank.
“By providing support and financial services to our customers in the Baltics, we are closely following the development of the situation in Ukraine, the current state of sanctions and acting in accordance with the instructions of the responsible authorities,” added Upenieks.
Severstal Distribution’s consolidated turnover in 2020 was 719.556 million euros, which is 2% more than a year earlier, while the group’s profit increased by 45.5% to 29.1 million euros. Severstal Distribution itself had a turnover of 719.556 million euros in 2020, which is 2.9% more than a year earlier, but the company’s profit increased by 17.9% to 28.811 million euros.
At the same time, TT Baltics had a turnover of 8.101 million euros in 2020, which is 4.6 times less than a year earlier, while the company’s loss increased by 5.8% to 2.204 million euros.
According to the company’s annual management report, TT Baltics developed rapidly before 2020, but in 2020 the company’s operations were negatively affected by the Covid-19 pandemic. TT Baltics has reduced its headcount and other expenses, as well as received payment extensions. In 2020, the company had 20 employees, which is 10 employees less than a year earlier.
TT Baltics started operating in the Baltics in the autumn of 2018. The company “TT Baltics” was registered in June 2018 and its share capital is 282,800 euros. The company is owned by Russian-registered KN-Holding, but its real beneficiary is Mordashov.
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