Russian oligarch Igor Makarov transferred money before Canada added him to sanctions list

Igor Makarov in Miami, Florida on January 19, 2017.AL DIAZ/Newscom

Russian oligarch Igor Makarov, a former cycling champion, recently circumvented Canadian sanctions by selling a $121.5 million stake in oil and gas producer Spartan Delta Corp. days before being targeted by the federal government.

Mr. Makarov’s ability to squeeze money out of his Canadian investment – the first major divestment of a state-owned company by a Russian investor since the start of the war in Ukraine – demonstrates the difficulties governments face in trying to influence Russian policy with sanctions, experts say

James Brander, professor of international economics at the Sauder School of Business at the University of British Columbia, said that for sophisticated individuals like Mr. Makarov, chairman of Geneva-based investment firm Areti International Group, the measures taken by the Canadian government “are, at best, only an inconvenience.

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The US Treasury Department put Mr. Makarov on its sanctions list in 2018. The Canadian government followed suit on April 19 in an action against 14 “close associates” of President Vladimir Putin’s regime who were targeted for their “complicity in the unjustifiable invasion of Russia. from Ukraine.

Canadian sanctions freeze Mr. Makarov’s assets in that country. The Australian government also placed Mr Makarov on its sanctions list in early April.

“Even though sanctions against oligarchs and political leaders don’t have much direct impact on politics, I think they are important for symbolic reasons,” Professor Brander said. “In this case, sanctions are a way to express and underline outrage at what is happening in Ukraine. This probably has a positive long-term impact.

In 1992, Mr. Makarov founded the energy company Itera in Turkmenistan, where he was born. In 2013, it sold its natural gas business to Russian state-controlled Rosneft Oil Co. for US$2.9 billion. He then renamed the private company Areti and invested in Russia and neighboring countries, as well as in Western Europe, the United States and the Canadian oil field.

Areti took an initial stake in Spartan in March 2021. Until last month, Areti was the Calgary-based company’s largest shareholder, with an 18.3% stake, and had two directors on Spartan’s board. . On March 28, Areti sold 15 million Spartan shares, a 9.8% stake, for $8.10 per share, according to a regulatory filing. Its two directors resigned the following week.

After raising $121.5 million from the sale of that part of its stake in Spartan, Areti continues to own 8.4% of the oil company, according to a regulatory filing in March. If Mr. Makarov’s company retains those shares, they are now frozen by Canadian government sanctions.

Spartan’s stock price has risen 160% over the past year and closed Friday at $11.12 on the Toronto Stock Exchange. In a recent report, Bank of Nova Scotia analyst Cameron Bean said the sale of Mr. Makarov’s shares was a positive development for the Canadian company as it “should help ease some of the controversy surrounding Spartan’s actions due to Areti’s Russian connections”.

Mr Makorov, 60, rode for the Soviet Union national cycling team from 1979 to 1986 and won several championships. He continues to be a major figure in the sport as a member of the board of directors of the International Cycling Union, honorary president of the Russian Cycling Federation and sponsor of a Swiss-registered professional cycling team, Team Katusha. In the past, representatives of Mr. Makarov have denied having ties to Mr. Putin.

Other recently sanctioned Russian oligarchs with holdings in Canada include Roman Abramovich, who owns 28.6% of steelmaker Evraz PLC, one of Regina’s biggest employers. Mr Abramovich is also currently selling Chelsea football club to London, a process which began before UK government sanctions.

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