Asset Transfers by Owners of Russia’s Alfa-Bank Total in the Billions | Kharon The Kharon Brief

Asset Transfers by Owners of Russia’s Alfa-Bank Total in the Billions

Part 1 in a series on emerging Russia sanctions avoidance typologies

(Source: Adobe Stock)

By Robert Kim and Kharon Staff

August 2, 2022

Russian oligarchs hit by U.S. and EU sanctions have transferred assets worth billions of dollars to close business associates who do not appear on sanctions lists, in efforts to avoid asset freezes.

Alfa-Bank, Russia’s largest privately owned bank, was one of the first institutions slapped with U.S. sanctions after the February 2022 invasion of Ukraine. Founders and directors of Alfa-Bank and its parent company Alfa Group — Mikhail Fridman, German Khan, and Alexei Kuzmichyov — have also been sanctioned by Canada, the EU, and U.K. 

In March, as Western sanctions targeted them, Khan and Kuzmichyov transferred their ownership interests in Luxembourg-based ABH Holdings SA to their business associate Andrei Kosogov, according to an Alfa-Bank press release and other media reports reviewed by Kharon. ABH Holdings owns Alfa-Bank affiliates and other companies in Cyprus, the U.K., and elsewhere. 

Kosogov, who has not been targeted by sanctions, is a close business partner of Fridman and serves as a board member of Alfa-Bank, according to media reports. In addition to their joint involvement in Alfa-Bank, Kosogov and Fridman were also the co-founders and former directors of the Luxembourg-based investment company LetterOne, founded in 2013.

Prior to the transfer of shares from Khan and Kumichyov in March 2022, Kozogov held a 3.9% ownership stake in ABH Holdings. Subsequent to the transfer, Kozogov owned approximately 41% of the company. Fridman and sanctioned oligarch Peter Aven have retained their respective 32% and 12.4% ownership stakes in ABH Holdings, below the 50 percent threshold which would deem the entity blocked under U.S. and EU law.

The transfers from sanctioned oligarchs to Kozogov are worth more than $4 billion, according to media reports.

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