Abramovich handed Chelsea director control of firm on day of Ukraine invasion - filings

Evraz

18/03/2022 13:35

By Andrew MacAskill and Paul Sandle
    LONDON, March 18 (Reuters) - Russian businessman Roman
Abramovich transferred a company he controlled with tens of
millions of dollars of investments to a director of English
soccer club Chelsea on the day Russia invaded Ukraine, UK
corporate filings showed.
    It was the second time Chelsea owner Abramovich moved assets
to a close associate before Britain and the European Union
imposed sanctions on him this month.
    After Britain was initially slower than the United States
and the European Union in imposing sanctions following the Feb.
24 invasion, British lawmakers complained that the government
was giving oligarchs time to move their assets out of the
country before any curbs were announced.
    Abramovich did not respond to requests for comment left with
Chelsea and his spokesperson. A British government spokesperson
did not respond to a request for comment.  
    Abramovich, 55, became one of Russia's most powerful
entrepreneurs mostly from oil and aluminium during the chaotic
aftermath of the 1991 break-up of the Soviet Union. Forbes last
month put his net worth at more than $13 billion.
    Britain and the EU imposed sanctions such as asset freezes
on Abramovich and hundreds of Russian individuals and entities,
targeting people accused of propping up Russian President
Vladimir Putin.
    Abramovich has denied having close to links to Putin.
    A Reuters analysis of corporate filings in London and
Amsterdam showed Abramovich was previously listed as the
"beneficial owner" of Cyprus-based Ervington Investments
Limited. The company has made investments in at least eight
firms, including in Russia's top search engine Yandex, the
filings showed.
    On Feb. 24, Eugene Tenenbaum, a director of Chelsea who is
described on the club website as one of Abramovich's "closest
associates", took full control of Ervington, according to a
filing with the London Stock Exchange. Neither Britain, the EU
nor the United States has placed sanctions on Tenenbaum.
    Tenenbaum said in a statement to Reuters that his company
purchased Ervington Investments from a trust in which Abramovich
and his children were previously the beneficiaries. He said the
purchase from the trust, called Norma Investments, was in
compliance with laws and regulations. Tenenbaum declined to say
how much he paid for the stake.
    "Ervington is a company that I have worked with for many
years," he said. "I know the company's investments and employees
well, and buying Ervington provides me with an opportunity to
continue to work with this business, under my control and for
my, and the employees' benefit."
    
    ASSET MOVEMENTS
    London-based lawyers said the move meant that the assets
held by Ervington would not be subject to the freeze imposed on
Abramovich's other assets.
    Abramovich has handed control of two companies to business
associates since the war began, according to corporate filings.
    Also on the first day of Russia's attack on Ukraine, which
Moscow calls a special operation, Abramovich moved Norma
Investments to another associate, David Davidovich, UK corporate
filings showed. The Norma transfer was first reported by the
Wall Street Journal and has been confirmed in the filings.
    Reuters was unable to reach Davidovich immediately for
comment.
    Britain imposed sanctions on Abramovich on March 10, saying
he had profited from transactions with the Russian government
and special tax breaks. 
    The British government said Evraz, a steel company in which
Abramovich is the largest shareholder, could contribute to the
war against Ukraine and supply steel for Russian tanks. Evraz
has denied this, saying it only supplies steel to the
infrastructure and construction sectors. 
    Evraz has not been sanctioned by the British government. Its
London-listed shares were suspended by Britain's Financial
Conduct Authority after Abramovich was sanctioned. Tenenbaum was
among 10 of Evraz's board members who quit on March 11 because
of the Abramovich sanctions, the company said.
    Abramovich put reigning European champions Chelsea up for
sale on March 2, but following the sanctions announcement, the
club was made to operate under a special licence and is now
effectively controlled by the British government.
    Several potential buyers of Chelsea have confirmed their
interest and the deadline for the first round of bids is Friday.
 urn:newsml:reuters.com:*:nL5N2VK44O
    
    RELATIONSHIP ENDED
    Tenenbaum, 57, was born in Ukraine when it was part of the
Soviet Union and has been on Chelsea's board for 19 years. He
was previously the head of corporate finance at Sibneft, an oil
company sold in 2006 by Abramovich. 
    Tenenbaum said in his statement that he does not agree with
the way Abramovich has been publicly characterised. The British
government said when it sanctioned Abramovich that he had been a
close ally of Putin for decades.
    "It is my hope that the unjust measures imposed on Mr
Abramovich will be reassessed," he said. "Unfortunately, as a
British citizen and due to the new regulations, I am unable to
continue to work with him personally."  
    Ervington has served as an investment vehicle for Abramovich
for at least eight years. It was among investors who put $600
million into Yandex in 2020 and who put money into Via, a
ride-sharing app.
    Tenenbaum moved to Canada at a young age and previously
worked for accounting firm KPMG in Toronto, Moscow and London,
according to the Chelsea website.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Soccer-List of confirmed bidders to buy Chelsea     urn:newsml:reuters.com:*:nL5N2VK44O
Chelsea owner Abramovich, Rosneft boss Sechin hit by UK
sanctions     urn:newsml:reuters.com:*:nL5N2VD2M8
EU blacklists Abramovich, targets energy, luxury sectors with
new Russia sanctions     urn:newsml:reuters.com:*:nL2N2VI0O1
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Andrew MacAskill and Paul Sandle; Editing by
Leela de Kretser and Grant McCool)
 ((Andrew.MacAskill@thomsonreuters.com; +447818584430; Reuters
Messaging: andrew.macaskill@thomsonreuters.com))