Ukraine conflict prompts advice on Russian business for Aussie firms

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Australia’s major firms have been directed to cut all financial ties with Russia as global sanctions ramp up in response to the Ukraine invasion.

The federal government has directed Australian superannuation funds to ditch their Russian assets in solidarity with global sanctions.

Australia’s richest man, Andrew Forrest, also had stern words for the business community, calling profiting from deals with Russia “blood money”.

Violence against Ukraine by Russian forces increased this week with indiscriminate shelling of civilian targets.

A joint statement by Treasurer Josh Frydenberg and Superannuation Minister Jane Hume on Thursday issued clear advice to Australian firms.

The pair said the government’s “strong expectation” was for local super funds to review their investment portfolios and take steps to divest any holdings in Russian assets.

“It is important that Australia sends a clear and unequivocal signal that we condemn in the strongest possible terms Russia’s unprovoked and unjustified attack on Ukraine,” they said.

Australia’s aim is to align with similar measures being taken by strategic partners, the US and UK.

Fortescue Metals chairman Andrew Forrest compared doing businesses with Russia to investing in fossil fuels.

“If you’re making a dollar from Russia right now, I’d call it blood money … it’s time you got real and left Russia,” he told Bloomberg.

Earlier this week, Fortescue’s renewable energy arm announced it would withdraw from green hydrogen projects underway in Russia.

“I’d much rather have turbulent waters now and completely stop the economic growth of someone who is taking oil and gas dollars from all over Europe,” he said.

Mr Forrest also said that people in Russia and business community were being fed disinformation about the nature of the conflict.

The government’s call for super funds to join sanctions follows its own, government-operated Future Fund, saying it would “wind down” its roughly $200 million worth of holdings in Russian companies.

WA‘s Government Employees Superannuation Board (GESB) also revealed Thursday it too would reduce its exposure to Russian companies closely linked to the Putin administration.

According to Treasury, the $3.5 trillion Australian super pool had only a small exposure to Russian investments.

“The actions of Australia’s superannuation funds to divest of Russian assets will complement the range of sanctions imposed by the Government to exert pressure on Russia, in alignment with our international partners,” it said.

Australia will extend existing sanctions already applying to Russian-held Crimea and Sevastopol, to the newly captured eastern Ukrainian regions of Donetsk and Luhansk, from March 28.

Originally published as ‘Blood money’: Australian firms told to ditch Russian assets

Read related topics:Russia & Ukraine Conflict

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