Norwegian wealth fund unable to withdraw funds from Russia — RT Business News

Hundreds of millions of dollars stuck in country due to Western sanctions, fund management says

Norway’s $1.3 trillion sovereign wealth fund, one of the world’s largest investors, is still unable to divest its holdings in Russia as the custodian bank is under Western sanctions, the government said on Friday. Norwegian Ministry of Finance.

The Oslo-based Government Pension Fund is the world’s largest owner of listed companies with a portfolio of around 9,000 shares. It has around 0.2% of its assets invested in Russia.

“The market for trading Russian financial instruments is still subject to global sanctions and has not been normalized in March 2023”, the ministry said in a statement.

The authorities of the Nordic country decided to sell Russian shares just after the start of the military operation in Ukraine. The fund held shares in 47 Russian companies and government bonds worth 25 billion Norwegian kroner ($2.4 billion) at the end of 2021.

However, at that time the fund’s management was resisting pressure to get rid of Russian assets, with CEO Nicolai Tangen saying it would be “a wrapped gift to the oligarchs who buy our shares.”

Since then, Western nations have imposed sweeping sanctions on Russia that now prevent Norway’s pension fund from divesting its assets.

“The concrete and practical problem is that the custodian bank we use is under sanctions, and cannot help us in the settlement of transactions, nor in the voting on shares” in Russian companies, Deputy General Manager Trond Grande said in January. The situation is “at a dead end” he noted, adding that “there is no way we can sell or buy or vote on these shares.”

Details of the fund’s portfolio at the end of 2022 released in January showed a loss of about $2.8 billion on Russian holdings, compared to their value at the end of 2021.

Meanwhile, Russia has repeatedly warned that sanctions imposed on the country will backfire. Earlier this month, Finance Minister Anton Siluanov said Western nations “suffer from their own restrictions” while being “disappointed” by the resilience of Russia.

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