Edinburgh University has shares worth millions in Russian bank and firm linked to Putin 1

Edinburgh University has shares worth millions in Russian bank and firm linked to Putin

Edinburgh University has shares worth £1m in a bank sanctioned after Russia’s invasion of Ukraine and more than £6.5m in a Dutch firm with links to Vladimir Putin.

The university owns shares in Russia’s largest bank, Sberbank, which has been sanctioned by the EU, US and UK.

It also owns shares in Prosus, which has a 27 per cent share in Russia’s VK Group. The chief executive officers of VK Group is Vladimir Kiriyenko, who has been sanctioned by the US for his links to the Kremlin.

Kiriyenko is the son of President Putin’s first deputy chief of staff, Sergei Kiriyenko, who US authorities describe as Putin’s “domestic policy curator”. VK Group owns Russia’s most popular social media site, VK (VKontakte).

In response to The Ferret’s findings, the Scottish Lib-Dems called on Edinburgh University to divest from Russian firms. The university said it would now review its investments.

News of the university’s investment in Russian linked companies will be hard for many to stomach given the invasion and divesting must now be a priority.

Mary Senior, Scotland official at University and College Union

Sberbank — listed on the London stock exchange — is Russia’s biggest financial institution, and state-owned.

Edinburgh University’s shares in Sberbank are worth £1,109,251 – according to the latest list of investments.

Its shares in Prosus are worth £6,780,276.

Following Vladimir Putin’s decision to attack Ukraine, US President Joe Biden cut off Sberbank from the US financial system, amid global calls for punitive economic sanctions on Russia.

Cutting Sberbank’s access to dollar transactions will have a severe impact on the Russian economy’s ability to do business outside its borders. 

All US financial institutions were instructed to close any Sberbank accounts they maintain, within 30 days, and reject future transactions involving Sberbank or its subsidiaries.

The UK Government also acted against Russian financial institutions but it stopped short of sanctioning Sberbank initially. However, the bank is now blocked from clearing transactions in sterling.

As a result of sanctions, Sberbank has pulled out of Europe. Sberbank’s London-listed shares crashed by as much as 95 per cent last week. 

The bank said its European subsidiaries faced “abnormal cash outflows”, meaning it could no longer supply them with liquidity – as well as threats to the safety of its employees and branches. However, Sberbank said it had sufficient capital to be able to make payments to all of its depositors. 

Edinburgh Western MSP Alex Cole-Hamilton said: “It’s time for Edinburgh University to pull out of its Sberbank investment and its other Russian holdings. Scotland needs to play its part in putting the squeeze on Vladimir Putin and his regime and that means using the financial leverage we have. 

“It is important to send a message that Putin’s behaviour in Ukraine will not be tolerated or supported.”

A University of Edinburgh spokesperson said: “We are reviewing the implications for our endowment portfolio, a small proportion of which includes indirect investments in Russian-related assets. Where these are held in pooled funds, we are engaging with fund managers as part of our review.”

Sberbank, which is Russia’s biggest lender, is pulling out of the European market completely.
Photo Credit: Wrangle.

Mary Senior, Scotland official at University and College Union, said: “UCU sends our steadfast solidarity to all those affected by the terrible events in Ukraine and has made a donation to UNICEF’s emergency appeal.  News of the university’s investment in Russian linked companies will be hard for many to stomach given the invasion and divesting must now be a priority.”

The CEO of VK Group, Vladimir Kiriyenko, was sanctioned by the US following Russia’s decision to recognise the so-called Donetsk and Luhansk People’s Republics as “independent” states. His father, Sergei Kiriyenko, is Vladimir Putin’s first deputy chief of staff. He was also sanctioned.

The US Department of Treasury said then that elites close to Putin continue to leverage their proximity to the Russian President to “pillage the Russian state, enrich themselves, and elevate their family members into some of the highest positions of power in the country at the expense of the Russian people”. 

Sanctioned oligarchs have used family members to move assets and to conceal their immense wealth, the statement continued. It added: “The following designations target powerful Russians in Putin’s inner circle believed to be participating in the Russian regime’s kleptocracy and their family members.

“Sergei Kiriyenko is reported to be Putin’s domestic policy curator. Sergei Kiriyenko’s son, Vladimir Sergeevich Kiriyenko (Vladimir Kiriyenko), previously worked as a vice president at the Russian state-controlled company, Rostelecom, and is presently the CEO of VK Group, the parent company of Russia’s top social media platform, VKontakte.

“As a result of today’s blocking actions, all property and interests in property of persons mentioned above that are in the United States or in the possession or control of US persons are blocked and must be reported to OFAC (US Department of the Treasury’s Office of Foreign Assets Control).”

The Ferret asked Prosus if it planned to review its stake in VK Group, given Russia’s attack on Ukraine. Prosus said: “We are appalled by the war in Ukraine and highly concerned for everyone affected. We hope that a diplomatic solution can be found to de-escalate the situation as quickly as possible.

“At this stage, we cannot speculate on the longer-term implications for our operations and investments. We will provide updates as more information becomes available.”

The pension fund for MSP’s also has shares in Sberbank, as revealed by The Ferret. A freedom of information (FoI) request found that the Scottish Parliamentary Pension Scheme (SPPS) has holdings in Sberbank worth £299,571.

The trustees of the Scottish Parliamentary Pension Scheme (SPPS) have written to Baillie Gifford, the firm that manages the fund, asking that it divests from Russian firms.

Pauline McNeill MSP — the chair of the fund’s trustees — wrote: “With the horrifying situation unfolding in Ukraine, the fund trustees are deeply concerned that the Baillie Gifford’s Managed Pension Fund has holdings in the state-owned Russian bank Sberbank.  

“I recognise entirely the SPPS is one of many investors in the Managed Pension Fund, and as a pooled fund, we the Trustees cannot direct individual investments. I am nevertheless writing to you in the strongest possible terms to request that Baillie Gifford divest immediately from Sberbank and all other Russian companies.”

Sberbank has been asked to comment.

Photo Credit: iStock/Wrangle

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