Freedom Finance Ukraine calls being hit by Ukrainian sanctions a "mechanical error"
MOSCOW. Oct 24 (Interfax) - Freedom Finance Ukraine LLC, a division of Freedom Holding Corp. that is one of the leading players on the Ukrainian stock market, said it believes its inclusion in the National Security and Defense Council of Ukraine (NSDC) sanctions list is "a mechanical error" that it hopes to resolve quickly.
Under the NSDC decision of October 19, which was confirmed the same day by a presidential decree, restrictive measures include freezing of assets, complete suspension of trading operations, prohibition of moving capital out of Ukraine, suspension of fulfilment of economic and financial obligations, annulment or suspension of licenses and other permits, and a ban on participating in the privatization or lease of state property.
The sanctions also include a ban on the transfer of technology and intellectual property rights, a ban on financial transactions with Ukrainian government bonds and a number of other measures.
In a statement issued Friday, Freedom Finance Ukraine said its inclusion in the sanctions list has restricted its ability to operate and the services it can provide to clients, and it is taking all possible measures to resolve this situation.
Since the company and Freedom Holding Corp. CEO Timur Turlov believe that inclusion in the NSDC sanctions list is erroneous, the company "has submitted a package of documents to the responsible state bodies of Ukraine to appeal the decision and will seek the removal of sanctions from Freedom Finance Ukraine LLC in the manner established by legislation," the company said.
Freedom Finance Ukraine said it "has a transparent and clear ownership structure, in which there is no Russian ownership, assets or beneficiaries with Russian citizenship." The company said it is 91% owned by Freedom Holding president Askar Tashtitov, a citizen of Kazakhstan, and 9% by international group Freedom Holding.
It also said that Freedom Holding has sold its Russian subsidiaries Investment Company Freedom Finance LLC (Freedom Finance, Freedom RU) and FFIN Bank LLC and pulled out of the Russian business, as announced on October 19, and that the group's Ukrainian company never had any business relations with these Russian companies.
The company also said that Turlov renounced his Russian citizenship, which was annulled on September 22, and he is now a citizen of Kazakhstan.
The assets of Freedom Finance Ukraine comprise less than 0.3% of the total consolidated assets of Freedom Holding, but the group is actively developing the infrastructure of Ukraine's stock market and is the largest shareholder of the Ukrainian Exchange, the company said.
"The imposition of any sanctions against the company is nothing other than a mechanical error, since for as long as Freedom Finance Ukraine LLC has worked in Ukraine it has operated transparently, in no way violating Ukrainian legislation," the statement said.
The company also said it confirms all its obligations to clients and counterparties and that it will honor its obligations to partners, customers and employees with funds from its shareholder directly and through partners in cases where this will be temporarily not possible for the company to do itself.
"The restrictions on Freedom Finance Ukraine's activities do not apply to assets abroad," the company said.