Prime Minister Justin Trudeau says he is confident that Canada’s new sanctions on Russian oligarch Roman Abramovich — who is accused of aiding President Vladimir Putin’s campaigns against Ukraine — will not impact about 2,200 workers at steel factories in western Canada owned by a company that Abramovich is alleged to control.
Canada’s financial actions against Abramovich took effect late Thursday, about a day after the United Kingdom took aim at the multi-billionaire and the Britain-registered multinational steel and mining conglomerate Evraz PLC. According to Britain, Abramovich effectively controls Evraz.
The Russian businessman owns 28.6 percent of Evraz’s shares and has long been seen as one of Putin’s most powerful and trusted associates. He gained notoriety in Western media after buying Britain’s Chelsea Football Club.
Evraz, however, says that Abramovich didn’t have “effective control” of the company, noting in a statement to stock traders that he owned less than 50 per cent of the company and could only appoint three of 11 board members.
In 2008 Evraz PLC purchased a number of Canadian steel factories for $2.3 billion. Since then Evraz has made a significant imprint on Canada’s resource economy, providing almost 60 per cent of the steel being used to build the $21.4-billion Trans Mountain Expansion Project.
But the British sanctions accused Abramovich of using Evraz to destabilize Ukraine. And Britain alleges the company “is or has been involved in” providing funds and resources that helped Russia attack Ukraine’s sovereignty. This could have included Evraz providing steel to build Russian army tanks.
Evraz Canada has not responded to repeated requests for comment from Global News.
On Friday, speaking to reporters in Europe, Trudeau said his government will try to ensure sanctions against Abramovich don’t impact workers at the company’s plants, including 1,700 workers at a Regina factory.
Meanwhile, financial records reveal that on Feb. 16, four days before Russian forces invaded Ukraine, Abramovich’s methods of holding Evraz shares changed dramatically.
Abramovich transferred his “indirect economic interest” in 417 million Evraz PLC shares — 28.6 per cent of total shares — from an offshore holding structure registered in the British Virgin Islands, the documents say, to his own personal holdings.
Marcus Kolga, a Canadian expert on Russia’s oligarch networks, said while the company issued a statement Friday denying British allegations that it supplied steel for Russian tanks, Canada needs to get to the bottom of the allegations.
“Although Evraz has denied recent reports that its materials have been used in the production of Russian weapons that are being used by Putin to invade Ukraine, Western governments and international institutions should investigate to verify this,” Kolga said. “And (Abramovich’s) proximity to Putin raises natural questions, especially in the context of Putin’s growing list of war crimes in Ukraine.”
Abramovich and others have also served as fronts for Putin’s personal investments a Canadian House of Commons committee has heard.
“He pretends to be a businessman, but he is just a nominal holder of Mr. Putin’s assets,” an aide for Russian dissident leader Alexei Navalny testified in May 2021. “He acquired for some pennies the oil companies that were taken by force using the criminal charges … from independent businessmen, taken on behalf of the Russian government, and then the control over these oil companies was transferred to Mr. Abramovich.”
Abramovich has repeatedly denied that he is an agent for Putin.
Kolga said Abramovich has close business associates from Toronto, and he is believed to have invested tens of millions in Canada. Kolga estimates a number of Russian oligarchs have invested billions since the 1990s in Canadian steel, gas, industrial, and real estate sectors.
“Sanctioning Russian oligarchs with billions in assets in Canada,” Kolga said, “would apply significant pressure on Vladimir Putin to end his barbaric war against Ukraine.”
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Oleg Deripaska, another of Putin’s top oligarchs sanctioned by Canada and Britain, bought US$1.54-billion in shares of the Canadian auto parts giant Magna in 2007, but quickly sold his shares in 2008.
Another Russian businessman who was not sanctioned is Konstantin Babkin, director of Combine Factory Rostselmash Ltd., based in Rostov-on-Don, Russia.
In 2014, a video emerged from a rally in Moscow that shows Babkin applauding Putin’s actions in Ukraine at the time.
“We should not stop at Crimea,” he said in the video.
Rostselmash Ltd. has a 97 per cent stake in Buhler Industries, which makes agriculture equipment in Canada – in Winnipeg – with roughly 1,100 employees.
Babkin reportedly resigned from the company’s board after Russia invaded Ukraine. Buhler Industries condemned Russia’s actions in a statement and attempted to distance itself from its Russian ownership saying the company “operates with autonomy” and “decisions are made in Canada.”
“Buhler Industries is united in the condemnation of the actions taken by the Russian Federation,” the company stated. “We offer our condolences to those affected and share in their grief.”
“The majority ownership is held by Combine Factory Rostselmash Ltd., an agriculture company based in Russia but Buhler Industries is not a Russian company. Our values are rooted in North America.”
On Thursday, before Canada announced sanctions against Abramovich, Jason Kung, a spokesperson from Global Affairs Canada, said Ottawa is co-operating with international allies in sanctions and could join a U.S.-led effort to target and seize the personal assets of Russian oligarchs.
“Canada worked in coordination with like-minded countries to assess potential targets that would most impact the Russian government. All options for future measures remain on the table and will be assessed alongside allies and partners,” Kung said. “The RCMP at this point has not seized any yacht belonging to Russian oligarchs. Any such seizure would have to comply within existing laws and legislation, and would involve an in-depth discussion with other core government agencies.”
– with files from Global News’ Andrew Russell and Stewart Bell