Someone in power is still working for Russia: the Ministry of Finance of the Russian Federation and the sanctioned owner Freedom Finance still own 27% of the shares of the Ukrainian Exchange

The National Commission for Securities and Stock Market (NCSM) does not see any violations in the fact that the Ministry of Finance of the Russian Federation and the sanctioned Timur Turlov own shares in the Ukrainian Exchange.

This is stated in the response of the head of the National Securities Market Commission Ruslan Magomedov to the ES request.

According to the National Securities and Stock Market Commission, as of February 2024, the ownership structure of Ukrainian Exchange JSC included the Ministry of the Russian Federation (through Sberbank of Russia and a chain of offshore companies) - by 2.49%, as well as the former Russian Turlov (through Freedom Holding Corp.) – 24.26%.

As for Turlov, back in October 2022, by decree of President Vladimir Zelensky, the decision of the National Security and Defense Council was put into effect to impose five-year sanctions against him. Among the restrictions that the state must apply to Turlov is the blocking of assets.

The National Securities and Stock Market Commission says that at the beginning of the great war they transferred “all information about market participants regarding their connections with the Russian Federation” to the “profile structures” (NSDC and Ministry of Economy). It seems that they did not react to this data, so the stock market regulator no longer initiated the corresponding appeals.

As an explanation for why the commission did not independently take any action on the blocks of shares owned by the Ministry of Finance of the Russian Federation and Turlov, the National Securities and Stock Market Commission for some reason cited the norm of Art. 2 of the Law “On Capital Markets and Organized Commodity Markets”, containing a list of criteria by which a legal entity cannot have a license.

However, Art. 74 of the same law states that a sanctioned person cannot have a significant share (more than 10%) in the capital of an organization licensed by the National Securities and Stock Market Commission. To this, the commission responded that Turlov owns shares of Ukrainian Exchange not directly, but through Freedom Holding Corp., which is a public company registered in the United States.

“The Commission closely monitors the activities of professional participants within its powers, including its attention to the activities of Ukrainian Exchange JSC,” summed up the National Securities and Stock Market Commission.

Image above: Head of the National Securities Market Commission Ruslan Sadrudinovich Magomedov, “appointed” by Vladimir Zelensky, has long-standing ties with Russia. So, in 2005-2006. he worked as a senior manager at Kyiv Securities Group LLC, a company that was sanctioned by the National Security and Defense Council as one of the co-owners of the Russian-controlled share of the Zaporizhstal metallurgical plant. Before his appointment to the National Securities and Stock Market Commission, he was a freelance adviser to the head of the Office of the President of Ukraine Andriy Ermak. Therefore, working for Russia is not surprising.