Gazprom bank managers earned millions on sanctions, FT reports

Four high-ranking managers at the Russian bank Gazprom's branch in Luxembourg have allegedly earned approximately 100 million kronor (9 million euros) by exploiting discounted foreign currency bonds. These bonds had plummeted in value following Russia's full-scale invasion of Ukraine and the subsequent imposition of EU sanctions in February 2022.

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It sounds like a circumvention of sanctions. This must be investigated in Luxembourg.

According to a Financial Times report, the managers allegedly used personal loans from their employer to purchase these heavily discounted bonds. They then sold them within Russia at their full ruble value, pocketing substantial profits. The report indicates that the four managers coordinated their trades and often acted before official information about which bonds were eligible for exchange was published on the bank's website.

Legal and financial experts cited by the Financial Times suggest that these actions could constitute insider trading and potentially violate EU sanctions. An anonymous EU official stated that the situation "sounds like a circumvention of sanctions" and called for an investigation in Luxembourg. Another source familiar with the matter noted that the suspicion grew when Russia offered full price for the cheap bonds, creating "good conditions for abuse."

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The whole situation created good conditions for abuse.

Gazprom's Luxembourg branch, however, maintains that the bank has adhered to all regulations and that no employee has committed any offense. In a statement to the Financial Times, the bank asserted, "Gazprom has never violated EU sanctions, neither in general nor in connection with the alleged transactions that these individuals carried out as private individuals."

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Gazprom has never violated EU sanctions, neither in general nor in connection with the alleged transactions that these individuals carried out as private individuals.