Since 2006, the shares of Russia’s largest fertilizer producer EuroChem and the coal company SUEK have been owned by a discretionary trust registered under the laws of Bermuda and managed by a trustee (trustee) in Cyprus. On March 8, 2022, Andrey Melnichenko ceased to be the beneficiary of the trust, this role was automatically transferred to his wife Alexandra. Previously, the beneficial share of an entrepreneur in the EuroChem group was 100%, in SUEK – 92.2%.
On March 9 last year, Melnichenko was included in the EU sanctions list, in June his wife, who has citizenship of Serbia and Croatia, also fell under European sanctions. The European Union has decided that the transfer of its stake in EuroChem and SUEK is an attempt to bypass the sanctions against Melnichenko.
Melnichenko believes that his withdrawal from the beneficiaries of the Firstline Trust was a mistake. According to him, this brought unnecessary inconvenience to his family and did not solve any problems of the companies. “In this regard, our family has already turned to trust managers and regulators with a proposal to return to the state that was unchanged from the foundation of the trusts until the moment I left the beneficiaries,” Melnichenko told Forbes.
“I thought that this would ensure the smooth functioning of the companies I created, at least for as long as the economic war continues and while legal restrictions apply to me personally,” Andrei Melnichenko explained his decision in an interview with Forbes. – She (the wife) has nothing to do with my decision to withdraw from the beneficiaries of the trust, and certainly nothing to do with the tragedy in Ukraine. But nevertheless, she became the first in the history of Europe a citizen of the European Union by birth who fell under the sanctions, while not having the citizenship of the country against which they are directed.
The return of control over EuroChem and SUEK to the billionaire is now completely dependent on the trust managers. “According to the general rule, a trustee may not let him back,” says Sergey Glandin, an expert on sanctions law, lawyer.
Andrey Melnichenko challenged the sanctions imposed against him in the General Court of the European Union on May 17, 2022, in August, according to Forbes, his wife filed a similar lawsuit. On April 4, 2023, Andrey Melnichenko topped the list of the richest Russians for the first time according to Forbes – in a year his fortune more than doubled, to $25.2 billion.
Read Andrey Melnichenko’s interview in Forbes magazine and on our website on April 20.
