Deripaska Says Sanctions are Absurd
After being hit by the Trump administration’s sanctions, Russian billionaire Oleg Deripaska has lost over a whopping US$6 billion. Under the new American sanctions, US citizens are banned from doing business with sanctioned companies. The sweeping penalties imposed are severely knocking companies owned by Deripaska, and making it increasingly challenging for these companies to conduct business transactions abroad. Some of the affected companies are EN+ Group, GAZ and Rusal.
The Numbers
Although statements were released by Deripaska’s industrial company EN+ and Rusal, claiming that it is not likely that the sanctions would be ‘materially adverse’ to their businesses, the numbers tell a different story. After several successes when EN+ was publically listed in London last year, the company suffered a massive 54% stock decline in a single weekend, dropping its market value by as much as US$2 billion. Around US$4.5 billion was wiped off Rusal’s market value when its shares were dropped by 50% in Hong Kong. As Rusal is one of the biggest aluminium producers in the world, this decline is likely to have a ripple effect on the industry. Even shares in Deripaska’s commercial vehicle manufacturing company, GAZ, have dropped by 10%.
Punishing Putin’s Cronies
The sanctions were ostensibly put in place with the goal of reprimanding Putin’s closest associates for their sins, which include interference in the 2016 US election and their aggression in Ukraine, Crimea and Syria. According to the White House, targeted sanctions would ensure that the oligarchs, who are reaping rewards because of disruptive activities undertaken by the Kremlin, will face dire consequences. The sanctions placed against Deripaska were for acting (or allegedly acting) on behalf of senior Russian officials. The billionaire, who once was closely linked to Paul Manafort, US President Donald Trump’s former campaign manager, is one of seven oligarchs who were sanctioned. It was reported that Deripaska described the decision made by the US to implement the sanctions as ‘groundless, ridiculous and absurd.’ The media also reported that Dmitry Peskov, spokesperson for the Kremlin, focused on the terminology used in the sanctions, instead of the economic punishment. Peskov said, ”The phrase ‘Russian oligarchs’ is considered inappropriate… there are no oligarchs in Russia.”