United Co. Rusal PLC shares surged at the open in Moscow on Jan. 11 after U.S. Treasury Secretary Steven Mnuchin reiterated his plan to lift sanctions on the company to the U.S. House of Representatives on Jan. 10, following criticism from Democrats.
The aluminum producer's shares had rallied by almost 4.6% to 31.47 Russian rubles per share by late afternoon in Moscow, while En+ Group PLC global depositary receipts rose 7.76% to 458 rubles.
Mnuchin defended lifting the sanctions against Rusal, its parent En+ and EuroSibEnergo PLC, explaining that they could be quickly reimposed in the event of noncompliance; he was responding to a Jan. 8 letter from the newly appointed Democratic chairs of seven committees, who called on him to brief the House on the decision with a view to postponing it.
The treasury secretary explained that the three companies were sanctioned solely on the basis of their ownership and control by Russian billionaire and Kremlin-associate Oleg Deripaska, who Mnuchin said will remain sanctioned, as will any companies Deripaska continues to control.
"These entities are undergoing significant restructuring and governance changes that sever Deripaska's control and significantly diminish his ownership," Mnuchin said in a statement released before he briefed the House. "They have committed to provide [the] Treasury with an unprecedented level of transparency into their dealings to ensure that Deripaska does not reassert control."
The Democrats, who took control of the lower chamber of the U.S. Congress last week, had expressed concerns that the deal to terminate sanctions would leave Deripaska with significant ownership of the businesses, which were sanctioned as part of the package of measures against Russia in response to its "meddling" in the 2016 presidential elections and other "malign activity" against the U.S.
House Speaker Nancy Pelosi described Mnuchin's briefing as "a waste of time," according to Reuters, while the treasury secretary told reporters that he was "shocked" by her comment.
The U.S. Treasury Department's Office of Foreign Assets Control notified Congress on Dec. 19 of its intention to end sanctions against the trio of Russian companies in 30 days, citing their "significant" restructuring and changes of corporate governance.
As of Jan. 10, US$1 was equivalent to 67.01 Russian rubles.