US anger over Russian FTSE float
US SECURITY officials have raised concerns about the British Government’s decision to allow a Russian oligarch with links to the Russian military to raise an estimated £1 billion on the London Stock Exchange.
And they warn that Britain’s obsession with Brexit is overshadowing the Government’s ability to pay proper attention to important national security issues.
Concerns have been raised in Washington over the flotation of EN+, a Russian energy company, in London last November and questions have been raised whether proper checks were carried out. EN+ is owned by Oleg Deripaska, a Russian oligarch who has close ties to Vladimir Putin, the Russian president.
EN+ also owns half of Rusal, a giant Russian aluminium company, which until recently said on its website that a fine metal powder it produced was used “in the production of military equipment”.
American security officials are particularly concerned that the money raised from the float was used by EN+ to pay off loans to VTB, a Russianowned state-owned bank, which is subject to US sanctions.
Moscow has been desperate to acquire foreign currency since the US and other leading powers imposed wide-ranging economic sanctions on Russia following Mr Putin’s invasion and illegal annexation of Crimea in 2014.
American officials involved in monitoring sanctions against Russia claim the EN+ float could allow Moscow to evade the sanctions.
“What is the point of the US imposing sanctions on Russia if the Russians can then get around them in Britain” asked a senior US national security official.
“The sanctions were imposed to demonstrate to Russia that it cannot get away with grave violations of international law. And yet it now seems possible that they have evaded sanctions by raising money in London.”
Senior officials in the Trump administration are also concerned that the Government’s obsession with Brexit means it is not paying close attention to national security issues.
“We understand the fixation with Brexit,” said a Trump administration official. “But Brexit is no excuse for ignoring vital national security issues.”
A spokesman for EN+ insisted the company had not breached sanctions. “The intended use of proceeds [from the flotation] by EN+ did not breach any US and EU sanctions,” the spokesman said. The flotation has provoked controversy in London, where intelligence officers at MI6 have raised questions about why they were not consulted about the float, given the potential implications for British security.
One senior British official described the decision to allow the float to take place as a “scandal”.
Sir Mark Sedwill, the head of the National Security Council, is said to be concerned that City regulators did not pay sufficient attention to the company’s flotation.
Pressure is said to be growing on the Financial Conduct Authority, the body that has ultimate responsibility for foreign listings on the Stock Exchange, to undertake a wholesale review of the listing.