Business

Russian billionaire sells stake in major firm a day before sanctions

WASHINGTON — A Russian billionaire stayed one step ahead of the White House by unloading his holdings in a major trading firm just a day before the Obama administration announced sanctions against him.

Billionaire Gennady Timchenko, listed by Forbes as Russia’s sixth-richest man, sold his 43 percent stake in Gunvor, the Geneva-based commodities trading company, to his Swedish partner Torbjorn Tornqvist on Wednesday, the company has announced.

On Thursday, President Barack Obama announced that Timchenko was among 20 officials close to Russian President Vladimir Putin being blacklisted by the US.

But there were strong hints of what was coming as top US officials including Vice President Joe Biden said the White House was prepared to impose further punishments if Putin continued his annexation of Crimea.

The price of Gunvor’s bond took a dive Friday, with the yield rising to 10.4 percent Friday from 7.4 percent on Thursday.

Shares in Russian gas producer Novatek, which is part-owned by Timchenko, also dropped more than 7 percent.

Gunvor said the shares were sold from Timchenko’s “personal holding vehicle to Mr. Torbjorn Tornqvist personally.”

That was done in anticipation of “potential economic sanctions so to ensure with certainty the continued and uninterrupted operations of Gunvor Group Ltd’s activities,” according to a statement on the company’s Web site.

The company said Tornqvist is now the majority owner with an 87 percent stake and that Timchenko had divested his entire holdings in the firm. It said there were no outside shareholders, and there was no deal for Timchenko to buy back his shares.

The Treasury Department said Timchenko got sanctioned because Putin “has investments in Gunvor and may have access to Gunvor funds.”

Those facing sanctions have their US assets frozen and face a travel ban, but are also likely to have trouble engaging in international transactions with major lending institutions in the West.

The sanctions are already having a measurable impact in Russia. An index of Russian stock fell 2 percent Friday afternoon.

Visa and MasterCard announced that they have stopped processing payment transactions for Russia’s SMP bank. The bank is co-owned by brothers Boris and Arkady Rotenberg, who were among the 20 people who got hit with sanctions Thursday.

But the administration is facing criticism for telegraphing its response, even as it hoped to dissuade Putin from absorbing Crimea, which Russian forces took over in late February.

It wasn’t hard for so-called oligarchs like Timchenko to see which way the wind was blowing.

“This is the list the administration should have announced on Monday. Waiting four more days only gave the real ‘cronies’ the opportunity to move any assets they might still have had in the USA, which is unlikely they did have anyway,” Andrew Kurchins of the Center for Strategic and International Studies told the Hill newspaper.