The Bank of Cyprus’ board of directors is set to look into how it will handle its largest shareholder Viktor Vekselberg after US authorities included his name and companies he controls in a new list of sanctions, a source said on Tuesday.
“OFAC sanctions concern the individual, connected persons and companies controlled to over 50 per cent,” a source familiar with the matter said. “All amounts he held not just with Bank of Cyprus but with any other bank have been frozen. What remains (to be seen) is how Bank of Cyprus will act.
“According to our information, they will look at how the board of directors will deal with the Vekselberg issue,” the source continued adding that “there is no obligation to do anything else. They may take some measures due to reputational issues”.
The sanctions, announced on April 6, include Vekselberg, six further Russian ‘oligarchs,’ 17 senior government officials, his Renova Group and 11 other companies, according to the website of the US Treasury’s Office of Foreign Assets Control (OFAC). The sanctions prompted Switzerland’s pumpmaker Sulzer to buyback stock held by Vekselberg to avoid being targeted by sanctions.
Vekselberg is owner of 9.3 per cent of the Bank of Cyprus’ shares via Lamesa Group, after he participated in the bank’s August 2014 capital increase.
The source said that while the board of directors could affect the position of its member Maksim Goldman who “is the representative of Renova”. On the other hand, the fate of the bank’s chairman Josef Ackermann, the former Deutsche Bank top executive, is not considered at stake despite his affiliation with Renova.
“From the moment he is chairman, it means he was considered independent,” the source said.
A Bank of Cyprus source played down the issue with Vekselberg.
“There is no issue and after communication with those who raised the issue, they are absolutely satisfied with the steps we took,” the Bank of Cyprus source said on condition of anonymity. “I wish other corporations and destinations also had our standards. The issue only exists in the sphere of journalism, nowhere else”.
A second Bank of Cyprus official who also spoke on condition of anonymity said that after the US Treasury announced the latest sanctions against Russian businesspeople, companies and officials, the bank did more than just freeze accounts in US dollars.
“Bank of Cyprus took stricter measures” than those required by OFAC, the official said.
A Vekselberg spokesperson did not respond to a request for comment.
Last year, the Cypriot government decided to offer the Russian businessman honorary citizenship. A government document showed that Vekselberg requested supervisory permission to increase his stake to a qualifying shareholding beyond the 10 per cent threshold.