Business
Russian billionaires lose over $85bn as U.S, UK, others tighten sanctions
Eighteen Russian billionaires have lost over $85 billion of their net worth year-to-date following imposition of sanctions on Russia by Western countries over the invasion of Ukraine.
According to Bloomberg’s billionaire tracker, Volga Group boss, Gennady Timchenko, lost the highest from the list of 20 billionaires on the tracker, as his wealth dipped $13.1 billion year-to-date, followed closely by Leonid Mikhelson, who lost $12.5 billion.
As the rest of the world reacts to what has been described as “Putin’s war”, several countries such as the United States and the United Kingdom have imposed huge sanctions on Russian billionaires and some of them have seen their luxury possessions seized, while the downturn in the local equities market has also seen wealth drop further.
After Russia launched the war on Ukraine, the Moscow Exchange Equities market plummeted by over 33% triggering the suspension of trading activities in the market.
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MOEX trading has been shut for nine straight sessions, the longest in the country’s modern history, as authorities prevent Russian assets from sustaining sharp losses amid a series of harsh Western sanctions imposed against Moscow for the invasion of Ukraine.
Since MOEX last opened almost two weeks ago, Russian stocks and related ETFs listed at the London and New York exchanges dropped significantly before trading was suspended, while global index providers began removing Russian equities from widely-tracked indexes.
In the same vein, the Russian Ruble has depreciated by 43% against the US dollar since the invasion started, dipped by 41% against the Euro, and 46% against the Chinese Yuan.
The decline of the Russian Ruble against other foreign currencies has also affected Russian Oligarchs who have their assets in the local currency.
Bloomberg’s billionaires’ index reports that a third of the wealth of Russia’s 20 richest billionaires has been erased.
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Gennady Timchenko, Oligarch founder of Volga Group and head of Russia’s Continental Hockey League has lost $13.1 billion bringing his net worth to $9.31 billion, closely followed by Leonid Mikhelson, Chairman and CEO of Russian gas company Novatek, who saw his net worth decline by $12.5 billion to $19.9 billion.
Alexey Mordashov, Chairman of the steelmaker, Severstal, lost $9.43 billion, bringing his fortune to $19.4 billion. Vladimir Lisin, Chairman and majority shareholder of Novolipetsk, one of the four largest steel companies in Russia also saw his net worth decline by $9.34 billion to $18.7 billion.
Russia’s richest man, Vladimir Potanin, President of Norilsk Nickel, the world’s largest producer of high-grade nickel was reported to have lost $8.6 billion and his worth is currently placed at $22.3 billion.
Russian billionaires have been sanctioned by various countries mostly due to their alleged alliances with President Putin, which has placed restrictions on their luxury properties. Some of the billionaires include Alisher Usmanov, who was sanctioned by the UK, the European Union, and the US.
According to the BBC, the EU first sanctioned him on the grounds that he is a “businessman-official” who helps the president solve his business problems. The billionaire responded, stating that the sanctions were unfair and that all the allegations against him were false.
Igor Serchin, who was sanctioned by the EU and the US. The EU sanctioned him on the grounds that his connections to Vladimir Putin run long and deep. His net worth is unknown and he is based in Russia. BBC also stated that there is little sign that he has wealth overseas that could easily be uncovered.
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According to the daily mail, a spokesperson for Roman Abramovich, the billionaire owner of Chelsea Football Club stated that “I can confirm Roman Abramovich was contacted by the Ukrainian side for support in achieving a peaceful resolution, and that he has been trying to help ever since.”
The billionaire’s fortune also took a hit as he has lost $4.28 billion so far this year, and announced that he would be selling his football club.
Billionaire and founder of Basic Element, one of Russia’s largest industrial groups, Oleg Deripaska called for an end to the war on a post he made on telegram stating that “Peace is very important! Negotiations need to start as soon as possible!”
In the same manner, Mikhail Fridman, co-founder of Alfa-Group has also publicly called for an end to the war. According to the Financial Times, He did this in a letter sent to staff at his London-based private equity firm LetterOne. The billionaire said he was “convinced” that “war can never be the answer.” The letter reads.