Following X5 case, Russia applies economically significant orgs mechanism to Alfa-Bank holding structure

MOSCOW. April 24 (Interfax) - The Russian Finance Ministry has filed a claim with the Arbitration Court of the Moscow Region to suspend corporate rights in respect of Cypriot companies owning entities that control Alfa-Bank and insurer AlfaStrakhovanie , the ministry said in a statement.

On April 1, 2024, the Russian government included AB Holding JSC (the main business entity of Alfa-Bank JSC) and UNS-Holding LLC (the main business entity of AlfaStrakhovanie JSC) in the list of economically significant organizations, giving the Finance Ministry the right to apply to an arbitration court to suspend the exercise of corporate rights by foreign holding companies in respect of them.

"On the part of foreign holding companies (owners) of these economically significant organizations (ABH Financial Limited (Cyprus) and Alfastrakhovanie Holdings Limited (Cyprus)) amid sanctions on Russia actions are carried out (inaction allowed) that prevent the implementation of the activities of a systemically important lender JSC "Alfa-Bank" and one of the country's largest insurance organizations - JSC "AlfaStrakhovanie," the Finance Ministry said in a statement.

In order to prevent such unlawful acts (inaction), the Finance Ministry filed a claim with the Arbitration Court of the Moscow Region to suspend the exercise by ABH Financial Limited and Alfastrakhovanie Holdings Limited of corporate rights in respect of AB Holding JSC and UNS-Holding LLC. This measure will eliminate obstacles to the activities of these organizations, as well as Alfa-Bank and AlfaStrakhovanie, in the Russian financial market, the Finance Ministry said.

The economically significant organization mechanism was first used by authorities with respect to X5 Retail Group, "related" to Alfa-Bank. The Russian Industry and Trade Ministry filed an application to suspend X5's corporate rights in Corporate Center X5 LLC. The Arbitration Court of the Moscow Region is expected to consider this on April 25.