A steel company that is 29% owned by Roman Abramovich has denied a government claim that it may have provided raw material to build Russian tanks, after sanctions imposed on the Russian oligarch led to its shares being suspended on the London Stock Exchange.
The Financial Conduct Authority said trading in Evraz shares had been halted “pending clarification of the impact of UK sanctions”.
Evraz has not been added to the list of Russian firms – such as Gazprom and Sberbank – whose shares have been suspended as a result of facing sanctions themselves.
But Abramovich’s UK assets have been frozen, meaning he cannot sell his 29% stake in the London-listed steel and coal company. The official government sanctions announcement also claims that Abramovich effectively controls the company, that it may have made steel for Russian tanks and that it supplied goods and services to the Russian government that could contribute to the invasion of Ukraine.
In a statement on Thursday afternoon, Evraz denied the claims and said it did not expect the company itself to be hit with sanctions. Abramovich did not have “effective control” of the company, it said in a statement to the stock market, highlighting that he owned less than 50% and could appoint only three of 11 board members.
“In view of the aforesaid, the company considers that the UK financial sanctions shall not apply to the company itself,” it said.
Evraz denied its steel was used to build Russian tanks, saying it provided steel only to the “infrastructure and construction sectors”.
The company also denied “that it is or has been involved in providing financial services, or making available funds, economic resources, goods or technology that could contribute to destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine – which includes potentially supplying steel to the Russian military which may have been used in the production of tanks.”
A day earlier, Evraz had distanced itself from Abramovich and two other directors, as well as cancelling a shareholder payout that would have been worth $210m (£160m) to the Chelsea FC owner.
Evraz said on Wednesday that it could not be certain whether three major shareholders – Abramovich, Alexander Abramov and Alexander Frolov – would be seen as persons “connected with Russia” for the purposes of sanctions law.
It added that, regardless of their investment in the company, Evraz “does not consider itself to be an entity owned by, or acting on behalf or at the direction of, any persons connected with Russia”.
The company also said it had not made any loans to the men since 1 March, when the UK issued financial sanctions against multiple Russian entities and individuals.
The company will retain the dividend worth $729m to shareholders, which was due to be paid on 30 March. Abramovich’s share of the payout would have been worth $210m based on his 29% stake.
James Rutherford stepped down as a non-executive director of Evraz on Friday. The company is due to be dropped from the FTSE 100 after investors sold out in droves and the share price plunged by 68% in response to the invasion of Ukraine.
