International steel company Evraz (OTCMKTS:EVRZF) was suspended from the UK stock market today due to its relationship with one sanctioned investor. The news comes just as EVRZF stock was surging as well. Indeed, Evraz was approaching gains near 70% the day before to its pause.
What’s going on with Evraz today?
Well, the Financial Conduct Authority opted to suspend trading of the stock while sorting out potential sanction conflicts. This is related to Evraz’s biggest investor, Roman Abramovich, who is on the UK sanctions list. Government officials stated that Abramovich was a close associate of Russian President Vladimir Putin.
Indeed, Abramovich has been accused of “undermining and threatening the territorial integrity, sovereignty and independence” of Ukraine. Evidence for this includes his involvement in various businesses that allegedly support the Russian military.
The UK government elaborated on its accusations against Abramovich and Evraz:
“Evraz is or has been involved in providing financial services, or making available funds, economic resources, goods or technology that could contribute to destabilising Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine.”
What else do you need to know about Evraz’s highly public suspension?
EVRZF Stock in Flux After Alleged Connections With Russia
EVRZF stock fell nearly 14% this morning prior to the stock’s halt, despite its rally just yesterday. This is likely a consequence of the UK government’s accusations against Abramovich and Evraz. In addition to these accusations, the company was denounced for potentially supplying its steel to the Russian military, possibly aiding in the production of tanks.
Just Wednesday, Evraz attempted to assure investors that it wouldn’t face the impact of sanctions. The company claimed it didn’t “consider itself to be an entity owned by, or acting on behalf or at the direction of, any persons connected with Russia and thereby caught by such legislation.”
In February, Abramovich took over control of his roughly 29% stake in Evraz. Previously, his ownership was placed in a British Virgin Islands holding company.
Evraz is the latest in a number of halted stocks on the London Stock Exchange with apparent links to Russia. It’s unclear what course the company will take following its suspension, but investors will surely keep their eyes peeled.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.