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TUI vs. Russian Oligarch Mordashov

According to a recent Skift article, TUI, one of the world’s leading tour operators, might be facing reputational problems because of one of its main shareholders, Alexey Mordashov, a pro-Putin oligarch who met the Russian president in the Kremlin last Thursday in a demonstration of defiance against Western sanctions. As global opposition to Russia’s invasion of Ukraine grows, having a Putin ally on its board of directors is an additional problem for TUI, both reputationally and financially.

Mordashov holds 34% of the Tui Group’s voting power through a Cyprus-based company and has been a member of TUI’s board of directors since 2016. Mordashov’s net worth is around USD 23 billion, after losing USD 4.2 billion last week when the moscow stock index collapsed.

Mordashov on Monday was subject to a series of European Union sanctions, including an asset freeze and a travel ban, a decision that had been discussed for days.

TUI Group spokesman Kuzey Alexander Esener clarified that Mordashov does not own or control TUI, although the UK defines its stake as control. It has only a 34% stake, 66% of the company belongs to EU shareholders, US funds and private investors. According to the management of the TUI company, rather than risking sanctions or operational challenges, the greatest risk of the T.O. seems to be reputational.

Russian billionaire Mordashov resigned “with immediate effect” from TUI’s supervisory board after being hit by EU sanctions over Moscow’s invasion of Ukraine. “The aim of the EU sanctions is to prevent Mordashov from divesting its shares in TUI” and “to make any proceeds or profits from his investment,” the company said.

Following the sanctions, Mordashov has also halted deliveries of steel produced by Severstal, one of Russia’s largest producers, to the EU, and will seek to redirect them to countries where he is not subject to restrictions.

According to Companies House, Mordashov has also resigned from his management at Nordgold, a mining company incorporated in London.