The 10-strong board of directors of Evraz, the steel and mining group in which Roman Abramovich controls a 29% stake, have resigned after sanctions were imposed on the Russian oligarch and shares in the company were suspended.
On Friday, the company said its 10 remaining non-executive directors – which include the former Ford executive Stephen Odell and Sir Michael Peat, a former private secretary to Prince Charles and whose family name is the p in KPMG – have now all resigned.
Two of the directors – Alexander Abramov and Alexander Frolov – are major Evraz shareholders alongside Abramovich.
It followed the move by the UK government on Thursday to sanction Abramovich, with ministers accusing him of having “clear connections” to Vladimir Putin’s regime, and the suspension of Evraz’s shares on the London Stock Exchange. Abramovich’s UK assets have been frozen, meaning he cannot sell his stake in the steel and coal company.
The company said on Friday: “Evraz is deeply concerned and saddened by the Ukraine-Russia conflict and hopes that a peaceful resolution will be found soon.
“In light of the financial sanctions notice issued by the Office of Financial Sanctions Implementation, HM Treasury, on 10 March 2022 and the suspension of the company’s shares from trading, all the Evraz plc non-executive directors have resigned as directors with immediate effect. Aleksey Ivanov, the company’s chief executive, will continue as a director.”
Last week, James Rutherford resigned as a director of Evraz after only nine months on the board, a day after the Institute of Directors urged British nationals to quit Russian boards, saying it was “no longer tenable” for them to remain after Russia’s invasion of Ukraine.
Evraz also said on Friday that it had indefinitely suspended plans to demerge its coal operations, which operate as Raspadkaya, as a separate publicly-listed company. Raspadskaya is the largest coking coal producer in Russia and one of the largest in the world.
The official government sanctions announcement on Thursday also claimed that Abramovich effectively controls the company, that it may have made steel for Russian tanks and that it supplied goods and services to the Russian government that could contribute to the invasion of Ukraine.
Evraz denied the claims and said it did not expect the company itself to be hit with sanctions. Abramovich did not have “effective control” of the company, it said in a statement to the stock market, highlighting that he owned less than 50% and could appoint only three of 11 board members.
“In view of the aforesaid, the company considers that the UK financial sanctions shall not apply to the company itself,” it said.
Evraz denied its steel was used to build Russian tanks, saying it provided steel only to the “infrastructure and construction sectors”.
The company also denied “that it is or has been involved in providing financial services, or making available funds, economic resources, goods or technology that could contribute to destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine – which includes potentially supplying steel to the Russian military which may have been used in the production of tanks.”
On Wednesday, Evraz had distanced itself from Abramovich and two other directors, as well as cancelling a shareholder payout that would have been worth $210m (£160m) to the Chelsea FC owner.
