Originally Syndicated on July 21, 2023 @ 4:24 pm
Table of Contents
The German authorities have initiated an investigation into the transfer of a significant stake in Tui, Europe’s largest holiday company, by Russian oligarch Alexei Mordashov, who is currently under Western sanctions. The transfer carried out on February 28, involved a 29.9 per cent shareholding in the travel group, which was moved to Ontario Limited, a company based in the British Virgin Islands. Surprisingly, the owner of Ondero was not listed in the regulatory filing, raising concerns over the legality of the transaction.
Controversial Transfer Sparks Investigation
Tui disclosed on Friday that the German government had launched an investigation into the transfer of shares by Mordashov‘s holding company, Unifirm, amid his recent placement on the EU sanctions list due to Russia’s invasion of Ukraine. With the spotlight on Russian oligarchs and their assets, the German authorities are taking a closer look at the stake transfer to ensure compliance with international sanctions.
Unidentified Owner Raises Red Flags
The lack of a named owner in the initial filing with the German market regulator has added complexity to the investigation. Legal requirements mandate the disclosure of stakeholders in regulatory filings, making the missing information a subject of concern. However, Tui later revealed that the updated filing by Ondero identified Marina Mordashova as the controlling shareholder. While she is believed to be the oligarch’s third wife, this information has not been officially confirmed.
Wealthy Russians Seek Asset Protection
Mordashov’s case is just one of many examples where wealthy Russians are taking measures to safeguard their assets as Western governments impose sanctions on individuals linked to President Vladimir Putin’s regime. With his business interests and financial assets under scrutiny, Mordashov faces the challenge of protecting his investments while dealing with the consequences of the EU’s punitive measures.
Tui Declares the transfer invalid
In response to the ongoing investigation, Tui announced that the share transfer would be considered “invalid” and the shareholding would be frozen until the probe into the effectiveness of the transaction concluded. This decision puts the control of the transferred shares in question, leaving both the travel group and Mordashov in a state of uncertainty.
Alexei Mordashov’s Involvement with Tui
Mordashov, a prominent steel magnate, has been a shareholder in Tui for 15 years. He initially acquired around 5 per cent of the company in 2007 with the aim of encouraging the group to establish operations in Russia. Furthermore, Mordashov played a crucial role in Tui’s survival during the pandemic by investing millions of euros to prevent the company from going under.
Russian Sanctions Hit Home
The EU’s sanctions against Mordashov were part of a larger effort to target Russian businessmen who have shown support for Moscow’s aggressive stance towards Ukraine. As a result of the sanctions, Italian authorities seized a €65 million yacht belonging to Mordashov, adding to the mounting pressure on the oligarch.
Assets Relocated to Severgroup
On the same day that the sanctions were imposed, Mordashov transferred a 4.1 per cent shareholding in Tui to Severgroup, a holding company where he serves as the controlling shareholder. According to Tui, Mordashov no longer has access to these shares or voting rights and cannot derive any economic benefit from them due to the sanctions.
British Virgin Islands Confidentiality
The transfer of the remaining 29.9 per cent stake to Ondero, a company based in the British Virgin Islands, officially removed the shares from Mordashov’s control. Companies in this jurisdiction are not obligated to disclose their shareholder registers, raising further concerns about transparency and accountability.
No Immediate Reputational Impact
Despite the controversy surrounding Mordashov’s share transfer and his inclusion in the EU sanctions list, Tui shareholders have not yet indicated any intention to sell their stock due to reputational risks.
Germany’s Economy Ministry Remains silent.
Germany’s economy ministry is in charge of the investigation, but as of right now, they haven’t responded to inquiries about the ongoing situation.
As the investigation unfolds, both Tui and Mordashov await the outcome, while the case sheds light on the challenges faced by wealthy Russians navigating international sanctions on their business interests. The uncertainty surrounding the share transfer highlights the need for increased transparency in financial dealings and the potential implications for companies and individuals involved in such transactions.
