Mordashov's resignation from the TUI Group supervisory board has to be a tremendous relief to the world's largest tour operator, which can now in large part get on with its business. However, there is a substantial hangover: With his shares frozen, Mordashov still remains TUI Group's largest shareholder.
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TUI Group’s largest shareholder, the Russian billionaire Alexey Mordashov, resigned from its supervisory board Wednesday after the European Union leveled economic sanctions against him three days earlier.
“The aim of the EU sanctions is to prevent Mr. Mordashov from disposing of his shares in TUI AG,” the Hanover, Germany tour operator said in a statement. “This is to prevent Mr. Mordashov from realizing any proceeds or profits from his investment in TUI.”
As part of the EU sanctions, Mordashov’s equity in the company will be frozen, and he loses any right to shareholder dividends. He has no access to his shares, and can’t reap any further benefit from TUI’s business.
However, with his shares frozen, Mordashov remains a 34 percent shareholder of TUI Group.
Mordashov, who’s been an investor in TUI since 2007 and served on its supervisory board since 2016, controlled a 34 percent stake in TUI with the accompanying voting power.
The European Union said another company where he holds a majority stake and serves as chairman, Severgroup, based in Russia, has enabled Mordashov to benefit economically from the drive to deny the Ukraine of its sovereignty. The European Union added that he has a stake in a bank that serves as a favorite of Russian Federation officials, and Mordashov’s steel company holds media interests that suppress the free flow of information and undermine Ukraine.
TUI Group said Mordashov’s resignation from the 20-member supervisory board, which plays a secondary role at the company when compared with the Executive Board, and the equity stake issue has “no impact on the company, customers and employees.”
The European Union sanctions were directed against Mordashov personally, and not at TUI Group.
“In this respect, these sanctions against the shareholder have no impact on the company in which he holds shares,” TUI Group stated. “The operative business of TUI AG is managed by the Executive Board, as is the case with any German public limited company.”
Mordashov has made many pro-Putin statements, and met in the Kremlin with Putin and other Russian oligarchs last week.
The Guardian quoted him this week as saying: “It is terrible that Ukrainians and Russians are dying, people are suffering hardships, the economy is collapsing. We must do everything necessary so that a way out of this conflict is found in the very near future and the bloodshed stops.”
TUI Group plans to initiate the process of appointing a replacement for Mordashov on its Supervisory Board, and his committee assignments. The Supervisory Board can act for now with 19 members and without the problematic 20th.
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Tags: alexey mordashov, corporate governance, european union, russia, sanctions, travel, tui group, ukraine
Photo credit: TUI Group headquarters in Hanover, Germany. The company's largest shareholder resigned from its Supervisory Board March 2, 2022. Christian Wyrwa / Diplom-Foto-Designer