Page 11 - bne IntelliNews monthly magazine November 2024

bne November 2024 Companies & Markets I 11
Russia’s USM Group threatens legal action against Kyiv over seizure of its steel assets in Ukraine
Ben Aris in Berlin
USM Group, whose assets include one of Russia’s largest metals producers, Metalloinvest, said it was considering legal action against any party seeking to buy iron ore it claims was expropriated by a Ukrainian court.
The High Anti-Corruption Court of Ukraine (HACC) ruled on September 25 to confiscate the property of Metalloinvest Group currently located in Ukraine, including over 165,000 tonnes of Russian-produced iron ore belonging to the Swiss- registered trading arm, Metalloinvest Trading AG.
In a statement on September 27, USM called the HACC decision “a flagrant example of the unlawful and unfounded “legalisation of the appropriation of private property,” which USM said had been blocked by Ukrainian authorities for over two years.
“We will make every effort to ensure that international courts properly assess the unlawful actions of Ukraine’s executive and judicial authorities. The holding’s companies also reserve the right to pursue legal action against any buyers who acquire unlawfully expropriated products, either directly from Ukrainian authorities or through third parties,” USM said.
Metalloinvest Trading AG is part of USM, where Russian- Uzbek billionaire Alisher Usmanov owns a non-controlling stake. Usmanov was subjected to Western sanctions in spring
2022, shortly after the start of Russia’s so-called “special military operation” in Ukraine, due to his alleged ties to the Kremlin which he has denied.
Before Russia's invasion of Ukraine in February 2022, Metalloinvest Trading AG purchased iron ore from Russian producers and exported it to third countries via Ukraine.
In February 2022, Ukrainian authorities detained several shipments of the company’s products and later seized them as part of what USM claims were fabricated criminal cases.
The court case with the HACC was initiated in July 2024 following a request by Ukraine's Ministry of Justice and based on Ukraine’s "Law on Sanctions," which Kyiv says allows it
to confiscate property in Ukraine that belongs to Russian sanctioned companies and individuals.
Ukraine's Security Service (SBU) previously stated that
the iron ore was of Ukrainian origin, stored illegally in the country's ports, and intended for shipment to Russia. The Economic Security Bureau of Ukraine also alleged that Metalloinvest had tried to transfer the ore to Ukrainian-based companies to avoid paying local taxes.
USM and Metalloinvest have denied all allegations made by the Ukrainian authorities.
A Ukrainian court has seized steel that used to belong to Russia’s USM Group, which hit back by saying it will sue anyone that buys the metal, disputing what USM call an expropriation of its goods. / bne IntelliNews
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