Putin crony’s £1bn London flotation questioned as US freezes his assets
MINISTERS are under pressure to explain why a crony of Vladimir Putin was allowed to float his company on the London Stock Exchange after the United States accused him of links to organised crime.
Oleg Deripaska and his firms were hit with American sanctions yesterday in a crackdown on “malign” Russian activity.
The energy tycoon, known in the UK for once hosting Lord Mandelson and George Osborne on his yacht, was accused by the US Treasury of “directly or indirectly” working for the Kremlin, as well as ordering the murder of a business rival and bribing an official.
His US assets have been frozen and Americans are barred from doing business with his various companies, some of which are based in the UK.
EN+ Group, a Channel Islands energy company controlled by Mr Deripaska and named in the US sanctions list, was allowed to float in London in November. The decision was taken despite the company being part-owned by a Russian bank subject to EU and US sanctions. The Daily Telegraph has also revealed that MI6 had concerns. After flotation, EN+ raised around £1billion in sold shares. Questions are now being raised about whether the flotation should have been approved.
The Financial Conduct Authority decides which companies are allowed to float on the LSE.
The regulator consulted the security services before approving the move. The Treasury is also understood to have raised no concerns, leaving the matter to the FCA. However, MPS last night questioned why government ministers did not do more to warn against the EN+ flotation given its ties to Mr Deripaska. Tom Brake, the Liberal Democrat trade spokesman who raised concerns about the flotation last December, demanded answers.
Mr Brake said: “They clearly dropped the ball in this case. I will be asking
parliamentary questions about the reasons why Mr Deripaska slipped through the net. There have been repeated concerns raised about the activities of President Putin’s closest cronies in the UK.”
Lord Barker of Battle, the former Tory energy and climate change minister, sits on the board of EN+ as an independent director. The company had not been suspended from the LSE last night, despite the US sanctions. An FCA spokesman said American actions were being reviewed.
The US Treasury said: “Deripaska has been investigated for money laundering, and has been accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering. There are also allegations that Deripaska bribed a government official, ordered the murder of a businessman, and had links to a Russian organised crime group.”
Other companies allegedly linked to Mr Deripaska were targeted – B-finance Ltd, Basic Element Limited, Eurosibenergo, Russian Machines, GAZ Group and Agroholding Kuban.
EN+ did not respond to a request for comment about the business and Mr Deripaska himself. Mr Deripaska has previously denied any wrongdoing.
Basic Element said in a statement: “The company regrets this development and is currently analysing the situation with its legal advisors.” Number 10 and the Treasury referred questions about the EN+ flotation to the FCA.
An FCA spokesman said of EN+: “The prospective listing was reported in the public domain in April 2017.
“We consulted with the relevant authorities according to the usual protocols. Having done so, there were no grounds for the application to be refused.”