Court rejects RBI challenge of ban on sale of Russian subsidiary

Raiffeisen Bank International said on Wednesday a Russian court had rejected its bid to lift an injunction banning the sale of its local subsidiary, frustrating efforts by the biggest Western bank still operating in Russia to exit the country.

The ban is tied to a lawsuit brought by Russian investment firm Rasperia after a collapsed deal in which RBI was ordered last year to pay 2 billion euros ($2.3 billion) in damages.

RBI said in an emailed statement to Reuters it considered those proceedings completed and that the damages had been collected in full by the Russian central bank.

“Nevertheless, the court has made an unprecedented decision to extend them,” RBI said.

Payment of the fine had previously been seen as a key step in the struggle for Russian regulatory clearance of Raiffeisen’s plans to sell its Russian subsidiary.

The bank’s dispute with Rasperia followed the failure of a deal that RBI hoped would allow it to unlock some of its frozen assets in Russia. RBI had sought to buy a stake in Vienna-based construction company Strabag, but pulled out under pressure from Washington.

Anastasia Taradankina, a lawyer for Raiffeisen’s Russian subsidiary from Russian law firm Delcredere, said there were no legal grounds to maintain the sale ban.

The court’s decision on the opening day of Russia’s premier economic forum in St. Petersburg may send a bad signal about Russia’s investment climate and the legal footing of foreign companies in Russia, Taradankina said.

“The court … showed that even in the absence of financial claims, it is possible to block company assets worth more than half a trillion roubles,” Taradankina said.

Source : Reuters