The billionaire shareholders of one of Europe’s largest construction companies are set to test the extent of Russian sanctions in an Austrian court case starting Wednesday.
(Bloomberg) — The billionaire shareholders of one of Europe’s largest construction companies are set to test the extent of Russian sanctions in an Austrian court case starting Wednesday.
Businessman Oleg Deripaska is challenging a decision put forward by Strabag SE co-owner Hans Peter Haselsteiner to remove his delegate from the supervisory board last year. The oligarch’s holding company, Rasperia Trading Ltd., was blocked from using its voting rights at the meeting.
The civil hearings in a small regional court near the border with Slovenia will focus on whether European Union sanctions go beyond freezing assets and dividends to also limiting additional rights attached to registered shares, such as nominating board members.
Strabag Owner Ends Syndicate With Deripaska as Sanctions Weigh
Across Europe, most sanctioned Russians have moved to sell or transfer their holdings in their key companies, leaving bankers and lawyers to grapple with questions of control.
Billionaire Andrey Melnichenko moved his holdings in EuroChem Group AG to his wife via a trust shortly after the February invasion last year. A Dutch court in December ruled a unit of Sberbank couldn’t exercise voting rights related to its 42.5% stake in conglomerate Fortenova grupa dd.
“Normally they sort it out in an amicable way with oligarchs and here they didn’t manage,” said Maria Shagina, a research fellow for economic sanctions at the International Institute for Strategic Studies in Berlin.
She said the complexity of the EU’s sanctions rules, with some 300 pages of frequently asked questions, gave an opening for Russian-linked companies to challenge the sanctions. “It’s a question of how strict and watertight” this regime will be and “if what is frozen will be fully frozen.”
Strabag’s three largest shareholders were part of a syndicate until the sanctions were announced. The Haselsteiner Family and the Raiffeisen-Uniqa group recently formed a new syndicate.
The company has said its day-to-day operations haven’t been affected by the sanctions but that it’s been forced to steer its public perception in countries more sensitive to its Russian ties, including Poland.
“Strabag was ensuring compliance with the EU sanction,” the company said in an emailed statement. The indirect connection to Oleg Deripaska “has had a negative impact on the group’s business activities since the start of the war against Ukraine.”
A spokesman for Deripaska said the EU sanctions “are supported entirely by false and baseless accusations and ride roughshod over the basic principles of law and justice.” He said Deripaska had no interest in control over Strabag’s operations.
This isn’t the first time sanctions against Deripaska have stirred concerns at Strabag, which delivered about €17 billion in construction projects last year and is involved in Britain’s HS2 railway project.
The US announced restrictions against him in 2018, alongside dozens of Russian companies, officials and tycoons, forcing Strabag to set aside his dividends. It ultimately paid those funds in 2020 after the sanctions were lifted.
Deripaska bought 25% of Strabag via a share issuance in 2007, helping the company gain access to the Russian market as it was preparing to host the Sochi Olympics and amid a housing boom in Moscow.
“I’d rather do business with Mr. Deripaska than with Dick Cheney,” Haselsteiner quipped at the time, referring to the then US vice president.
In the Klagenfurt case, the judge may opt to issue a judgment or refer the matter directly to the EU’s Court of Justice, the 27-nation bloc’s top tribunal.
–With assistance from Konrad Krasuski.
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