Jamaica Observer / MOSCOW, Russia (AFP) — Russian aluminium giant Rusal said Friday that Oleg Deripaska has resigned his seat on the board, a key step in the company’s efforts to escape US sanctions targeting its founder and key shareholder. The firm, a major supplier for industrial companies around the world, has been intensifying its efforts to show Washington its determination to become independent from Deripaska, who is on a US blacklist.
The US Treasury’s Office of Foreign Assets Control (OFAC) announced fresh sanctions against Russia last month following a major diplomatic crisis sparked by the poisoning in Britain of former double agent Sergei Skripal.
The sanctions hit oligarchs close to President Vladimir Putin, including Deripaska.
That announcement prompted the shares of the firm responsible for seven per cent of the world’s aluminium production to tumble while the price of the metal soared.
Manufacturers feared they would no longer be able to purchase supplies from the firm, potentially snarling production in many sectors of the US economy and elsewhere.
Faced with the market turmoil, the US Government then indicated Rusal could avoid being caught up in the sanctions by cutting ties with Deripaska, one of the so-called Specially Designated Nationals targeted by the sanctions.
Deripaska’s resignation was his most concrete step so far to comply with Washington’s conditions. He had only previously indicated he wouldn’t seek reappointment next month to Rusal’s board, and pledged to reduce his stake in the firm.
Rusal said in a statement on Friday that Deripaska has tendered his resignation from the board, effective immediately, and that the move was part of “the efforts that have been made… to protect the interests of the company and its shareholders since the OFAC sanctions were imposed”.
Even as the 50-year-old billionaire distanced himself from the company, Rusal on Thursday purged itself of the directors Deripaska had appointed, with half of the board as well as the chief executive officer submitting their resignations.
Russian Government officials also confirmed Rusal has approached the Government for assistance as the prospect of the US sanctions has scared away clients.
“Aluminium has so far done very little despite the news of Deripaska resigning as a director of Rusal in an attempt to ease sanctions against the company,” said Matt France, an analyst at the Marex Spectron commodities brokerage.
“It remains to be seen if this is enough to change the US view on a potential divestment or not,” he added.
Analysts at Commerzbank noted that one condition for the United States lifting the sanctions is that Deripaska relinquishes control of Rusal.
“This has not happened yet,” they wrote in a note to clients.
“All the same, we see Deripaska’s resignation as another step towards an easing of the situation on the aluminium market,” adding that it is “probable” that the sanctions against the firm would be lifted in the coming months.
Shares in Rusal closed 1.5 per cent lower in Hong Kong.
Meanwhile, shares in EN+, the holding company through which Deripaska holds the stake in Rusal, rose two per cent in morning trading Friday in Moscow, but were still trading at less than half the price they did in early April.
A Putin aide confirmed on Friday a proposal to support Rusal, a day after a Government source told journalists Deripaska had sought to have the State buy some of its aluminium.
Putin advisor Andrei Belousov told RIA Novosti state news agency such a proposal does exist but declined to comment on the State’s position about intervening to help the firm.
Rusal employs tens of thousands of people, and some of its facilities are the only employer in their localities.
Russian Finance Minister Anton Siluanov said Thursday the Russian state would provide the firm with loans at market rates if banks refuse to lend to Rusal for fear of falling foul of US sanctions.