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City heavyweights flee boards of Russian companies in London
Former ministers and Metropolis grandees who’ve spent the previous decade incomes giant pay cheques on boards of Russian-backed firms at the moment are racing to chop ties.
London has attracted scores of Russian firms over the previous twenty years. Many sought to make use of former politicians, reminiscent of Greg Barker at metals group EN+, or Metropolis veterans like Xavier Rolet at fertiliser group PhosAgro.
This week, each males stood down from their posts, including to the exodus of board members from Russian-backed firms in London.
“Having the precise board members clearly helped Russian firms open doorways and add credibility,” mentioned Tom Keatinge, director for the Centre for Monetary Crime and Safety Research at think-tank Rusi. “Executives have allowed their reputations to be co-opted by these firms for a charge.”
The board of Evraz, whose greatest shareholder is sanctioned oligarch Roman Abramovich, resigned en masse this week, together with Sir Michael Peat, former principal personal secretary to the Prince of Wales.
Six members of Polymetal’s board have additionally stood down, together with its British chair, whereas Richard Brasher, a former Tesco govt, left the board of X5, a Russian grocery store, and Joan MacNaughton departed En+.
Russian web providers teams VK and TCS Group additionally introduced the departure of non-executive administrators.
Many could have made the choice to go away beneath rising strain from politicians and enterprise teams. The Institute of Administrators has referred to as on all British executives to finish involvement in companies linked to the Russian economic system.
“These choices have been compelled on them,” mentioned Keatinge. “They waited till the final doable second when it turned untenable. They shouldn’t be applauded.”
However whereas board members can lower ties and transfer on, shareholders have been left with heavier losses. In line with an evaluation by funding financial institution, Cowen, about $330bn was wiped from the worth of Russian-linked firms that used London for his or her secondary listings between the beginning of the battle and the purpose at which buying and selling in most of those had been suspended.
Right here the Monetary Occasions appears at 5 administrators who helped handle Russian-backed companies within the UK.
Xavier Rolet, PhosAgro
Former London Inventory Change boss Xavier Rolet joined the board of Moscow-based fertiliser firm PhosAgro in 2018 and have become chair in 2019.
He introduced his resignation on Thursday, a day after the corporate’s chief govt and largest shareholder, Andrey Guryev, was sanctioned by the EU.
Days earlier Rolet, a veteran banker and dealmaker, mentioned in a press release that “the logic of utilizing the burden of sanctions, boycotts and public strain to punish LSE-listed firms for failures of coverage and negotiation frankly eludes me”.
Buying and selling in PhosAgro’s shares was suspended in London on March 3.
Rolet mentioned: “As an EU citizen, I resigned the identical day that the EU expanded its Russian sanctions record to incorporate the corporate’s principal shareholder, who hadn’t been sanctioned in any jusrisdiction till then.”
Rolet earned 11.9mn roubles in 2018, 21.3mn roubles in 2019, and 27.1mn roubles in 2020, in response to PhosAgro’s most up-to-date annual report. Utilizing the typical change charges in every of those years, that works out as £141,000 in 2018, £258,000 in 2019 and £292,000 in 2020. The financier was awarded the Order of Friendship of the Russian Federation in 2017.
Sir Michael Peat, Evraz
The accountant and former personal secretary to Prince Charles was, till Friday’s board exodus at Evraz, the metal firm’s most high-profile British non-executive. He joined the board in October 2011, shortly earlier than Evraz’s major itemizing on the London Inventory Change in December.
Peat had been attributable to step down formally on the finish of this month however left on Friday, alongside two different British non-executives, former Ford govt Stephen Odell and Deborah Gudgeon, a former director at Deloitte.
He earned simply over $2.5mn throughout his years at Evraz, in response to the corporate’s annual accounts. His final function was as senior impartial non-executive. Peat didn’t reply when requested for remark about his function at Evraz.
The son of an illustrious household — Sir William Peat, his great-grandfather, was one of many founding companions of what ultimately turned KPMG — Peat himself turned a accomplice at KPMG in 1985.
He led a consultancy examine into the administration and funds of the Royal Family in 1986-87 and was subsequently requested to implement his suggestions. He joined the Royal Family in 1993, working in a number of positions there, together with because the Queen’s keeper of the privy purse, earlier than retiring in 2011.
Jim Rutherford, Evraz
Jim Rutherford, who stepped down from the board of Evraz every week in the past — earlier than the primary exodus of administrators — is a former analyst and Metropolis fund supervisor.
Throughout a 16-year profession at Capital Group he turned one of the highly effective institutional buyers in metals and mining firms.
After leaving Capital in 2013, Rutherford, who’s from Belfast, joined the board of Anglo American, the place he served as a non govt director for nearly seven years.
In 2017, the Monetary Occasions reported that Anglo American had blocked Rutherford from taking a place on the board of En+, the metals and vitality group then managed by Russian oligarch Oleg Deripaska.
Rutherford joined the board of Evraz in June final yr and was paid $125,000, in response to its 2021 annual report.
He’s additionally chair of Centamin, an Egyptian targeted gold firm listed in London, and the senior impartial director at Anglo Pacific, a mine finance firm.
In a press release Rutherford mentioned: “My determination to step down, which was notified to the corporate a few days beforehand, was a really private selection. I condemn within the strongest doable phrases the mindless Russian invasion of Ukraine.”
“At no level whereas I served as a non-executive director of Evraz, nor throughout my due diligence course of earlier than I joined the board, did I see something that might in any method contradict the agency denials made by the corporate in response to the accusations by the UK Workplace of Monetary Sanctions Implementation.”
Greg Barker (Lord Barker of Battle), EN+
Former MP Greg Barker turned non-executive chair of EN+ in 2017 when the Russian metals group listed on the London inventory change.
On the time EN+ was managed by Oleg Deripaska. The Russian oligarch later surrendered majority possession of the corporate when he was hit with US sanctions over his ties to the Kremlin.
Barker was appointed govt chair in 2019 after hammering out a cope with the US Division of Justice to free the corporate from sanctions.
He obtained a $5.9mn bonus for his function within the negotiations, which he described on the time as “comparatively modest”, on prime of a $1.9mn wage. He earned $4mn in 2020. His pay for 2021 has not been disclosed, whereas the 2017 and 2018 didn’t disclose his remuneration.
Earlier than becoming a member of EN+, Barker was an MP for 14 years and served as local weather change minister in David Cameron’s coalition authorities. He stepped down in 2015 and have become a peer.
Earlier than getting into politics, he was head of worldwide communications for Sibneft, the Russian oil firm then owned by Roman Abramovich and Boris Berezovsky. Barker declined to remark.
Bruce Buck, Chelsea Soccer Membership
Bruce Buck had already been a Chelsea season ticket holder for greater than a decade when Roman Abramovich requested the previous lawyer to advise him on his acquisition of the soccer membership for £140mn in 2003.
Buck as soon as rejected the label of “Abramovich’s right-hand man” and as a substitute referred to as himself “the little-toe-on-the-left-foot man”.
The American, who has lived in London for the reason that early Nineteen Eighties, has been chair of Chelsea ever for the reason that acquisition. Buck’s function on the membership gave him standing in English soccer: in 2019, he led the seek for a brand new chief govt of the Premier League.
Buck’s relationship with Abramovich grew out of the lawyer’s time in London at US regulation agency Skadden Arps within the Nineties. Skadden prospered from establishing ties with newly-rich Russian businessmen who constructed fortunes by snapping up state belongings within the Nineties, together with Abramovich by means of his stake in oil group Sibneft.
Abramovich has counted on Skadden for authorized recommendation past soccer issues, together with throughout his profitable authorized battle in opposition to Boris Berezovsky, his one-time buddy and mentor who fled Russia in 2000 after clashing with Vladimir Putin.
Skadden made not less than £2.6mn in charges from Chelsea from 2004 till 2017, in response to disclosures within the membership’s accounts, a fraction of the reported £35mn the agency obtained within the Berezovsky case in 2012.
Skadden and Buck declined to remark.