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Gunvor chief used $1bn dividend to cut ties with Russian founder | Gunvor chief used $1bn dividend to cut ties with Russian founder |
(35 minutes later) | |
Oil trading giant Gunvor handed its chief executive a $1bn dividend to fund a deal that helped the company distance itself from US sanctions against Russia. | Oil trading giant Gunvor handed its chief executive a $1bn dividend to fund a deal that helped the company distance itself from US sanctions against Russia. |
Torbjörn Törnqvist agreed to buy a 43% stake in the company, the fourth largest oil trader in the world, from co-founder Gennady Timchenko in 2014 for an undisclosed fee. | Torbjörn Törnqvist agreed to buy a 43% stake in the company, the fourth largest oil trader in the world, from co-founder Gennady Timchenko in 2014 for an undisclosed fee. |
Timchenko’s exit was designed to quell any concerns about his role in the company, as he was due to be named in a list of people with alleged links to the Kremlin sanctioned by the US after Russia’s invasion of Crimea. | Timchenko’s exit was designed to quell any concerns about his role in the company, as he was due to be named in a list of people with alleged links to the Kremlin sanctioned by the US after Russia’s invasion of Crimea. |
But the sheer size of Gunvor, which pulled in revenues of $64bn (£44bn) last year despite rock-bottom oil prices, meant Törnqvist could not fund the deal in one go. | But the sheer size of Gunvor, which pulled in revenues of $64bn (£44bn) last year despite rock-bottom oil prices, meant Törnqvist could not fund the deal in one go. |
The payment of a $1bn dividend, only part of which was used to fund the deal, allowed Törnqvist to settle his remaining debt to Timchenko. | The payment of a $1bn dividend, only part of which was used to fund the deal, allowed Törnqvist to settle his remaining debt to Timchenko. |
The transaction initially gave Törnqvist a stake of more than 86% but while he took his dividend in cash, employees taking part in the firm’s share plan took theirs in shares. | |
This is understood to be part of a long-term plan to dilute Törnqvist’s shareholding over time so that he owns less than 70% of the company. | This is understood to be part of a long-term plan to dilute Törnqvist’s shareholding over time so that he owns less than 70% of the company. |
Gunvor said the deal, revealed in the Financial Times, was done in full compliance with the US sanctions regime and disputed a US Treasury statement that Putin has investments in Gunvor and may have access to Gunvor funds. “The idea that there’s some secret Putin ownership is ridiculous.” | Gunvor said the deal, revealed in the Financial Times, was done in full compliance with the US sanctions regime and disputed a US Treasury statement that Putin has investments in Gunvor and may have access to Gunvor funds. “The idea that there’s some secret Putin ownership is ridiculous.” |
Industry sources said if Gunvor was in breach of US rules on businesses with links to the Kremlin it would already be facing sanctions. | Industry sources said if Gunvor was in breach of US rules on businesses with links to the Kremlin it would already be facing sanctions. |
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