Director General of TAIF JSC Albert Shigabutdinov transferred his share in Avers Bank to his son, Ruslan Shigabutdinov. Changes in the composition of the founders occurred four months after Shigabutdinov Sr. was included in the UK sanctions list. However, this belated step does not completely remove the risks from the bank, BUSINESS Online experts believe: sanctions decisions sometimes apply to immediate family members and affiliates. About what risks for Avers and other assets of Shigabutdinov Sr. the “sanctioned” beneficiary bears – in our material.
31.48% of Avers passed from father to son
According to the Unified State Register of Legal Entities, until recently, Albert Shigabutdinov owned 29.33% of the authorized capital of Avers Bank LLC. At the same time, 27.18% was written directly to him, and another 4.3% was registered to TransPort LLC, whose capital is divided equally between Albert Shigabutdinov and his youngest son Timur Shigabutdinov. Since March 17, 2023, all these shares have been transferred to the eldest son Ruslan Shigabutdinov, who as a result controls 31.48% of the bank’s authorized capital. Other major beneficiaries of the bank are the son of the ex-president of Tatarstan Mintimer Shaimiev, Radik Shaimiev, who has 28.52%, and Rustem Sulteev, with a share of 27.42%.
Avers is considered a captive bank serving the interests of TAIF and related companies. At the end of 2022, Avers Bank received 2.1 billion rubles of net profit. Net assets amounted to 143 billion rubles, capital – 25.2 billion rubles, deposits of individuals – 63.3 billion rubles, loan portfolio – 12.1 billion rubles.
Where else does Shigabutdinov’s name create risks?
Changes in the composition of the founders occurred against the background of the inclusion of Shigabutdinov Sr. on the UK sanctions list. Recall that in November 2022, in addition to the General Director of TAIF JSC, the son of the first President of Tatarstan, the General Director of Tatavtodor JSC Airat Shaimiev was included in the document. According to an official release from the British government, the oligarchs were accused of “allowing Putin to mobilize Russian industry to support his war efforts.”
They won’t leave to live in London: how are Shigabutdinov and Shaimiev Jr. threatened with sanctions?
Albert Shigabutdinov is ranked 74th in the ranking of the richest Russian businessmen for 2022 according to Forbes. His fortune is estimated at $1.3 billion. The British estimate his fortune more modestly – at 977 million pounds (91.6 billion rubles). The UK report notes that Albert Kashafovich, as TAIF CEO, supported the Russian government and benefited from working in sectors of strategic importance (energy, financial services, information, communications and digital technologies). The restrictive measures include a travel ban to the UK and an asset freeze in the country.
However, something else is more important: sanctions imposed on an individual may be followed by restrictions for the legal entities with which it is associated. The level of influence of the sanctioned person on the company is of key importance. For example, US and EU restrictions are included in relation to an affiliated company if the sanctioned person owns it by 50% or more. But that’s in theory. Despite the withdrawal of Petr Aven and Mikhail Fridman from the board of directors of Alfa-Bank in March last year, in April 2022, the United States imposed sanctions on the bank. There is another example. After the imposition of EU sanctions, Dmitry Konov and Gennady Timchenko left all positions in Sibur and left the board of directors.
The essential difference is that Shigabutdinov is currently only on the UK sanctions list, not the EU and the US. However, this may turn out to be a matter of time, and the decision on Avers shows that TAIF takes this risk into account. The intrigue remains whether Albert Shigabutdinov will now exit his other assets. He remains the general director and, apparently, a co-owner of TAIF JSC, which owns, in particular, TAIF-NK. It was not reported about the transfer of his minority stake in Sibur, which he received after the deal to sell the main assets of TAIF. Shigabutdinov is still on the board of directors of the company.
“Correspondent accounts may be arrested, and the owners will be told that the money went to save Ukraine”
“A number of sanctions decisions apply to relatives (persons subject to restrictions – ed. note), the son is the closest relative, an affiliate, so the risk of sanctions pressure remains for the bank,” the head of the department said in an interview with a BUSINESS Online correspondent. “Finance and Economics” Institute of Contemporary Development Nikita Maslennikov.
According to the interlocutor of the publication, if Avers falls under sanctions, this will destroy the bank’s settlement systems, isolate it from international markets and payment systems. True, international payments can be made through third countries, such as Kazakhstan, Kyrgyzstan or Armenia. You can do this in other currencies – the yuan or the UAE dirham, but first you have to agree with the recipients of funds – foreign clients. “Friendly companies, even in unfriendly countries, settle in exotic currencies, but this is not a common practice,” warns Maslennikov.
The bank should not be afraid of a significant loss of clientele, since the sanctions have already affected most credit institutions and there is no point in switching from one bank to another. “Surely the bank has developed strong traditional ties with clients, and both will have to adapt if something happens,” Maslennikov believes.
However, possible sanctions can generate costs. Judging by established practice, they will fall on customers in the form of tightening credit conditions, transaction costs or maintenance. “The son of the former owner will have a lot of headaches. But, since they made such a decision, it means that they thought that they would succeed. It remains only to wish success, ”advised Maslennikov.
Alexander Razuvaev, a member of the Supervisory Board of the Guild of Financial Analysts and Risk Managers, on the other hand, does not see significant risks for banks that have fallen under sanctions. “The Russian Federation is going to switch to yuan in foreign trade, I think the share of settlements in dollars and euros will almost halve this year, to 25 percent. And from October 1, 2023, Russian banks are prohibited from using the SWIFT system for transfers within the country, it should be replaced exclusively by Russian services for the exchange of interbank information, ”he argues.
To switch to settlements in new currencies, it is enough for banks to install new software, says Razuvaev. “Yes, correspondent accounts may be arrested, and the owners will be told that their money went to save Ukraine. But as a rule, little money is kept for them, the loss is also small, ”added the interlocutor of the publication. He also does not rule out that foreign securities may be seized from bank customers.
But even under sanctions, banks are working quite successfully, Razuvaev believes. “Alfa-Bank, for example, is under severe sanctions, but they are not very worried. True, the structure of capital has changed. But, as far as I understand, this is a personal initiative of Aven and Fridman (Peter Aven and Mikhail Fridman will withdraw from the number of shareholders of the bank, the media reported in March – ed.)”.