Britain’s multitrillion pound asset management industry has been asked to pressure London-listed companies to sever ties with Russia as a corporate exodus grows following Vladimir Putin’s invasion of Ukraine.
Sky News has learnt that Chancellor Rishi Sunak and John Glen, the City minister, met executives from companies including Aviva, Fidelity, Phoenix and Schroders last Friday to demand that they signal a more robust approach towards their own remaining holdings in Russia.
According to a source briefed on the meeting, which also included representatives from the Investment Association and the City regulator, some fund managers expressed concern that the Treasury’s stance risked turning them into forced sellers of Russian assets.
Read more: Russia has become the world’s most sanctioned country – but is the UK doing its bit?
3:28 Sanctions for oligarchs consideredThat could in turn benefit Mr Putin and those close to him if they are able to acquire those stakes at prices which have plunged close to zero, the source said.
AdvertisementIn a tweet on Friday, Mr Sunak said he and Mr Glen had “met with leading figures in financial services to discuss UK investment in Russia and what more we can do to inflict maximum economic pain on Putin”.
Further details of the discussions have yet to be reported.
More from BusinessA number of the asset managers who attended the meeting said the Treasury had asked those present to notify officials if they were aware of any peers purchasing Russian assets since the war with Ukraine got under way.
One executive said the issue of side-pockets – separate vehicles into which Russian holdings would be transferred and held until sufficient liquidity returned to enable them to be sold – was also brought up during the talks.
Such a move would enable City fund managers to avoid an immediate fire sale of Russian assets.
2:19 Should we stop importing Russian oil?“The Treasury was clear that they wanted ideas from the industry about how Britain’s financial services sector can put further pressure on Putin,” said the source.
Since the invasion began nearly two weeks ago, scores of Western companies have announced temporary or permanent exits from Russia.
These have included companies such as Marks & Spencer and Next in the retail sector, the oil producers BP and Shell, professional services firms including EY and PricewaterhouseCoopers, and financial services giants like Visa and Mastercard.
Others, such as the FTSE-100 tobacco manufacturer BAT, has issued a statement saying that it complies with all relevant sanctions but has yet to curtail its activities in Russia.
Some City executives believe the government is shifting the focus to the corporate response to the Russian invasion in order to deflect attention from the speed at which British sanctions against oligarchs and state-owned companies are being implemented.
None of the companies or organisations contacted by Sky News in relation to Friday’s meeting would comment.