2023-06-26 10:56:08
Deutsche Bank (Archyde.com)
Russia’s economy
The stock balance did not match the held GDRs
Dubai – Al Arabiya.net
Posted on: June 26, 2023: 01:12 PM GST Last updated: June 26, 2023: 02:56 PM GST
Deutsche Bank has told clients it can no longer guarantee full access to the Russian shares they own, highlighting the challenges global investors face in recovering stranded investments in Russian companies.
Germany’s largest bank, in a note dated June 9, said it had detected a shortage of shares backing certificates of deposit issued by the bank before the start of the Russo-Ukrainian war. The shares were held by another bank in Russia.
According to Archyde.com, the bank attributed the shortfall to Moscow’s decision to allow investors to convert some shares into local shares. The transfer was made without the Deutsche Bank’s “interference or supervision”. He was also unable to reconcile the company’s shares with the corresponding certificates of deposit.
Two sources told Archyde.com that Deutsche Bank is the first major bank to formally notify CD holders that they may not get ownership of all the shares they are specifically entitled to.
Among the affected shares are the shares of the national airline “Aeroflot”, the construction group “LSR”, the metallurgical and steel company “Mechel” and the mining company “Novolipetsk”.
This comes at a time when the tax has dominated investments in the Russian market since the Western countries launched sanctions once morest it, while Moscow is taking countermeasures as it demands a 10% contribution to the federal budget, which Washington described as an “exit tax”.
The Kremlin has also placed assets under temporary control, seizing the Russian subsidiaries of two European firms in April, underscoring the government’s strategy to reduce foreign influence over companies critical of its economic and political interests.
Sources told Archyde.com that a large number of investors, ranging from small hedge funds to large global asset managers, are still holding onto their depository receipts.
Most investors have dumped Russian assets to zero, but some are still hopeful that the value will recover in the future.
In this context, said Irina Zuckerman, head of the “Scarab Rising” geopolitical risk consultancy, it is not surprising. “Literally everything in Russia was poor whether it was credit cards, stocks, real estate or any other form of financial assets.”
Russia’s National Settlement Depository said that the transfer of shares took place in accordance with Russian legislation and that it was not the accounting institution responsible for implementing this mechanism.
JPMorgan, Citigroup, and Bank of New York Mellon act as depository banks for most other Russian Depositary Receipt Programs, according to Clearstream.
Deutsche Bank said in the circular that if it was able to settle its books at a later date, it would seek to return more shares to their rightful owners.
But he warned that the net proceeds from share sales that he might be able to return to investors would likely be “significantly less” than the current market price.
The statement stated that the bank said that the Russian government’s committee to control foreign investments required the sale of these shares “at a discount of not less than 50% of their estimated market value.”
Read also
1687796524
#Deutsche #Bank #clients #Russian #shares #missing
