Going Bust or Going Home: Who is Left to Turn the Lights Out?

Posted on Mar 02, 2022. by NTI

President Xi of China has issued his boldest statement yet about the Russian invasion of Ukraine. He said last evening that he was getting quite miffed with the Russian position and would get right onto it once he had checked his immediate plans concerning Taiwan.

Meanwhile the world and its insolvency practitioners have been talking with their actions. EU sanctions have exposed the financier Alisher Usmanov, who has grubby connections with Everton football club, and he joins Roman Abramovic as the pariahs British sport no longer want to know. How will this affect football? Isn't that a bit like complaining about your athlete's foot on the way to the gallows?

Another, Mikhail Fridman, runs Alfa Bank and the Letter One investment group, whose portfolio includes Holland & Barrett, if you want to know who not to buy your ginkyo biloba from as you prepare for exams this year. Fridman's parents live in western Ukraine. Fridman himself? Oh, don't worry about him, Mum and Dad; he lives in a manorial pile on Hampstead Heath he bought for £65 million in 2016. He joins other of this week's new expletive, "oligarchs", who can wait at home for a knock on the door (or make another choice and fear touching a door handle ...).

The Austrian branch of Russian Sberbank has become the first big banking 'victim' of the week, with insolvency proceedings having commenced due to ..."exceptional outflow of funds and a number of safety concerns". Oh, and being Russian; don't forget about being Russian. Its chair, Elka König, said: “It’s not an insolvency due to negative equity, it’s an insolvency due to lack of liquidity.” Oh, and being Russian, Elka; don't forget about being Russian.

Commodity traders and purchasing managers, all wearing grey suits and blue ties, are growing increasingly worried about the way that many raw materials have the potential to be used as weapons of foreign policy. The pandemic (remember those halcyon days?) highlighted the perils of relying for supply of crucial raw materials on a handful of countries or companies, which had led to severe supply chain disruptions. Now these red-faced men have a greater worry. As well as being Europe’s main supplier of gas, Russia is also dominant in the markets for a number of other important commodities, such as oil, wheat, aluminium, and palladium.

BP announced this week it would offload its stake in Rosneft of almost 20 per cent. Apple has suspended sales of its products in Russia. So has Land Rover Jaguar, as have Ford and even Nike who finally 'Just Did It' after three days not just doing it. Boeing have stopped all operations in the country, including the provision of parts, maintenance and technical support services for Russian airlines. Even Walt Disney and Warner Brothers are at it; delaying the release of new movies in Russian cinemas. Exxon Mobile turned the lights out as it left on Tuesday (1 March) as it (finally) said it will exit all major oil and gas projects in Russia; being just about the last company to do so. Exxon have more than 1,000 staff in the country who will join the bewildered thousands who have no stake in the man leading them towards oblivion, but who now face financial ruin. The issue for many western countries is how to pay staff who are now suspended in the country, as the banking and international payments systems no longer work.

At the UN yesterday anyone with a shred of decency turned their backs on Russian Foreign Minister, Sergei Lavrov, leaving just China, Indonesia and India in the room to listen to his garbage. The world has taken note, you people.

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