4 Gazprombank Execs Earned €9M on Sanctions-Driven Bond Scheme

Four top executives of Gazprombank earned more than 9 million euros from the decline of bonds following the imposition of sanctions.

Consensus

Four top managers of Gazprombank Luxembourg participated in bond exchange operations in 2022.
They used personal loans from the bank to purchase discounted eurobonds of Gazprom in Europe.
The eurobonds were exchanged for Russian-issued replacement bonds at face value.
The operations occurred after the introduction of Western sanctions and the collapse in value of the eurobonds.
The Russian government issued an order on July 5, 2022, allowing the issuance of replacement bonds.
The managers coordinated their purchases, often buying identical volumes of the same bonds on the same day.
The exchange process involved the National Settlement Depository (NRD), which was under EU sanctions.
The Luxembourg financial regulator (CSSF) found that the bank violated internal rules by opening personal accounts for employees.
The managers are no longer employed at Gazprombank Luxembourg.
All four managers denied any wrongdoing.
Financial Times reported the findings based on documents and sources familiar with the transactions.

The Luxembourg financial regulator did not impose sanctions despite finding violations of internal bank rules. — novaya_eu
A European Union official stated that the operations 'look like a sanctions evasion' and called for a criminal investigation in Luxembourg. — tg_moscowtimes_ru
The bank's internal rules prohibited opening personal accounts for employees, and the directors were classified as 'high-risk' individuals. — thebell
The European Union official stated that the case 'should become the subject of a criminal investigation in Luxembourg.' — meduza
The managers conducted operations involving four different bond issuances, each of which was eventually included in the replacement program. — tg_agentstvonews