Moscow banned 2 major Swiss banks from disposing of shares in its subsidiaries after a Russian bank said it would lose money from the exit.
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A Moscow court has banned UBS and Credit Suisse from disposing of shares in their Russian subsidiaries.
The ban request had come from Moscow-based Zenit Bank.
Russia witnessed an exodus of Western companies after it invaded Ukraine.
It’s hard to break up with Russia.
A Moscow court has banned two major Swiss banks — UBS and Credit Suisse — from trying to wriggle their way out of their Russian subsidiaries, Reuters reported on Tuesday, citing court documents.
Moscow-based Zenit Bank requested the ban, citing concerns about losing money should the two Swiss banks exit, per the news agency.
The issue arises because of a syndicated loan granted in 2021 to Intergrain, a Luxembourg-based agricultural firm. Zenit was one of the syndicated lenders, and Credit Suisse — which has since been acquired by UBS — was the credit agent for the loan, Reuters reported.
The loan amount isn’t specified, but Zenit transferred $20 million to Intergrain in November 2021, per Reuters.
However, once Western sanctions were placed on Russia over its invasion of Ukraine, Credit Suisse told Zenit it would not transfer loan repayments from Intergrain, per Reuters.
Zenit has now told the Moscow court it believes the Russian subsidiaries of UBS and Credit Suisse were preparing to exit their businesses in the country — which would leave Zenit high and dry.
Zenit also requested the court to seize funds belonging to UBS and Credit Suisse, but the application was not granted, per Reuters. The next court hearing is scheduled for September 14.
Credit Suisse and Zenit did not immediately respond to requests from Insider for comment sent outside regular business hours. UBS declined to comment.
Both Swiss banks’ troubles in Russia aren’t unique.
Moscow has barred investors from so-called unfriendly countries — those who have imposed sanctions on Russia — from exiting their Russian assets without the approval of President Vladimir Putin.
The Russian leader also signed a decree in April that allows the state to take over the assets of companies or individuals from these countries — which was what it did to the assets of Danish brewer Carlsberg and the French food company Danone in July.
Russia witnessed an exodus of Western companies after it invaded Ukraine, but some have remained — either voluntarily or because of challenges in leaving the Russian market.
While over 1,000 companies quickly announced that they were voluntarily cutting back on operations in Russia just two months after the Ukraine war started in February 2022, just 530 companies have managed to make a clean break as of August 14, according to an ongoing study led by Jeffrey Sonnenfeld, a professor at the Yale School of Management.