Gazprom subsidiary sues
Russia confiscates Deutsche Bank assets
May 18, 2024, 10:52 a.m
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Russia is reacting to the sanctions imposed by the West – now Deutsche Bank is being hit. Specifically, it is apparently about claims in the wake of a canceled LNG terminal construction. A Gazprom subsidiary demanded almost 240 million euros. A court confiscated securities and money.
A Russian court has ordered Deutsche Bank’s assets in Russia to be seized. This was reported by the Russian news agency Tass. The measure by the court in St. Petersburg comes at the request of RusChimAllianz, a subsidiary of Gazprom operating an LNG terminal on the Baltic Sea, which is making claims against Deutsche Bank for 238.6 million euros. The assets were blocked in the form of securities belonging to Deutsche Bank and other companies with its participation, as well as in the form of real estate and money in accounts. It is therefore only part of the bank’s assets in Russia.
Deutsche Bank said it had set aside provisions of 260 million euros for the case. However, this sum is fully secured by a compensation agreement with a customer. “It remains to be seen how this decision will be implemented by the Russian courts and what consequences this will have for our operations in Russia,” the bank said.
The court had previously also frozen bank accounts and assets of the Italian bank Unicredit in Russia. Other donors are also affected. The background is the collapsed construction of the terminal due to Western sanctions, for which the banks had helped guarantee. RusChimAllianz wants 444 million euros from Unicredit. Assets worth 463 million euros are to be frozen. Unicredit is the largest active foreign bank in Russia after Raiffeisenbank and is one of the 20 largest banks in the country based on its balance sheet assets.
Billions lost in Russia
RusChimAllianz signed a contract for the construction of the plant with the German industrial group Linde and the construction company Renaissance Heavy Industries in 2021. RusChimAllianz paid an advance to Linde for this, it was said. After the war of aggression against Ukraine launched by Kremlin chief Vladimir Putin, the West imposed sanctions. According to the information, Linde informed its client that the work was stopped.
The banks that had acted as guarantors for the deal also withdrew their guarantees because of the sanctions. In addition to Deutsche Bank and Unicredit, Commerzbank, Bayerische Landesbank and Landesbank Baden-Württemberg were also sued before the arbitration court in St. Petersburg. In contrast to Unicredit, the companies did not have large branches in Russia. German companies have lost billions in investments in Russia due to the sanctions.
Russia is increasingly responding with retaliatory measures to sanctions imposed by Western countries because of Russia’s war of aggression against Ukraine. Numerous companies had to accept the confiscation or seizure of assets and new managers were appointed to the Russian subsidiaries. Companies that withdraw from Russia sometimes have to sell their businesses to Russian companies at significant discounts. Often only a symbolic ruble is paid.