Big bank has lost track
JP Morgan loses shares in Russia
7/13/2023, 7:27 p.m
JP Morgan parks shares in the retail chain Magnit with a Russian partner institute. They are also available to customers of the major US bank against a deposit slip. With the Ukraine war, Russia is changing the rules. JP Morgan is suddenly missing shares.
According to its own statements, the major US bank JP Morgan lost shares held for customers in Russia. In view of the turbulence resulting from Western sanctions and Russian counter-sanctions in the course of the Ukraine war, the money house, like Deutsche Bank, admitted that there were no Russian company shares that were to be held by a Russian partner bank.
In a July 12 letter to investors, the U.S. bank said it was seeking to regain shares in retail chain Magnit. JP Morgan had issued depositary receipts to customers for these shares. With such certificates, investors can acquire rights to shares that are traded on a foreign stock exchange. In order for an investor to get back the money invested, depositary receipts must first be exchanged for the underlying shares. Russia had changed its rules as part of its own sanctions against investors from so-called unfriendly countries.
JP Morgan said some underlying Magnit shares may be missing after individual investors swapped their depositary receipts twice. This became possible after Russia passed laws requiring the exchange of these certificates. In the same way, Deutsche Bank had already lost track of Russian stock holdings for which it had issued depositary receipts to customers. Because some depositary receipts were exchanged for shares without the participation of the institute.
JP Morgan said in the investor letter that cash proceeds from the sale of resurfaced shares would be distributed pro rata to certificate holders. Only less than one percent of the shares held by another financial institution would be missing.