The board of specialist steel manufacturer Schmolz + Bickenbach has distanced itself from major shareholder Viktor Vekselberg and his investment group Renova in the wake of United States sanctions against Russian economic interests.
Chairman Edwin Eichler will stand for re-election at next week’s annual general meeting, but no longer as a representative of Renova, the Swiss firm announced on Monday. Vladimir Polienko will stand down, leaving Marco Musetti as the only Renova-appointed representative on the board if elected.
The move to reduce the Schmolz + Bickenbach board from seven members to six was approved by all major shareholders, the company said.
Vekselberg and Renova were targeted by US sanction after being named as ‘specially designated nationals’ (SDN). Sanctions were imposed in retaliation for Russian actions in Syria, Ukraine, Crimea and Europe.
Any other company at least 50% owned by SDNs could also be hit with sanctions. Vekselberg owns around 42% of Schmolz + Bickenbach through investment groups, but the Swiss company still saw share prices hit by its association with the Russian.
Another Swiss industrial concern, Sulzer, was forced to buy shares back from Vekselberg last week to reduce the Russian’s holding from over 60% to under 50%. US banks had frozen Sulzer bank accounts to comply with the sanctions.
"Dollars account for half of all cash flows at Sulzer. We could no longer pay some employees, we could not accept any new orders, we were paralyzed," Sulzer CEO Greg Poux-Guillaume said in an interview with Swiss public television on Monday.
“We may have lost some orders in the short term, but I am convinced that there will be no long-term damage. We will continue to do business in Russia, but carefully - and probably without Renova".