May 19, 2022

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Sanctioned Russian billionaire banker Mikhail Fridman was locked out of the private-equity firm he cofounded and staff were told to ignore him, report says

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Mikhail Fridman

Russian banker Mikhail Fridman stepped down from the board of the investment firm he cofounded.

Fridman was barred from entering LetterOne’s offices and speaking to employees, per the FT.

The billionaire is among oligarchs sanctioned by the EU in response to Russia’s invasion of Ukraine.

Russian billionaire and banker, Mikhail Fridman, was locked out of the investment firm he cofounded after he was hit by European Union sanctions, the company announced on Wednesday.

London-based LetterOne said in a press release that Fridman and Russian banker Petr Aven had stepped down from the company’s board and will no longer have any dealings with the group. Fridman and Aven jointly own under 50% of LetterOne, so the company has avoided sanctions imposed on the two men. 

Chairman Mervyn Davies, who has now taken control of LetterOne, told the Financial Times that employees aren’t allowed to speak to Fridman. LetterOne, founded in 2013, has also locked Fridman out of its offices and blocked him from having access to documents, Davies told the FT.

Fridman’s assets in the company were “effectively frozen” and his rights as a shareholder were taken away, LetterOne’s press release said. He won’t receive dividends, funds, or communications in any way, said LetterOne.

A company spokesperson told Insider that Fridman has “no involvement in the day-to-day management or decision-making of LetterOne and appropriate arrangements have been put in place to give effect to this.”

LetterOne’s actions came after the EU sanctioned Fridman as part of a package of responses to Russia’s invasion of Ukraine. Fridman is one of the many Russian oligarchs targeted by Western sanctions aimed at crippling Russia’s economy.

The board isn’t obligated to give shareholder rights back to Fridman if the EU sanctions are lifted, according to  LetterOne’s press release.

Fridman, who has a net worth of $10 billion according to Bloomberg, was one of the first Russian business leaders to speak out against the invasion of Ukraine.

In a letter to LetterOne employees, Fridman said that “war can never be the answer,” and that “this crisis will cost lives and damage two nations who have been brothers for hundreds of years.”

LetterOne, which describes itself as “an international investment business led by successful entrepreneurs and former CEOs and international businesspeople,” held $22.3 billion in net assets as of 2020, according to its website.

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