The UK’s Financial Conduct Authority (FCA) has been asked to investigate the listing of Belarusian government bonds on the London Stock Exchange, openDemocracy reports today.
In a letter from the Belarusian Coordination Council, viewed by openDemocracy, the opposition movement asked the FCA to investigate the banks, which in 2020 is the listing of Belarusian government bonds worth 1.25 billion Société Générale and Renaissance Capital, and the FCA the regulator of the London Stock Exchange.
The letter is the latest in a spate of criticism of Britain’s financial ties with Belarus. British MPs called on Boris Johnson’s administration to investigate London’s role in funding autocratic regimes after Belarusian authorities forced a Ryanair passenger plane carrying a dissident to land in Minsk in May.
“These recent revelations that Belarusian Eurobonds are being offered in the London market are shocking and require a response from the FCA and the Treasury,” Labor MP Tony Lloyd told openDemocracy. “Britain shouldn’t be the back door for arms sales and it shouldn’t be the back door to prop up the Lukashenko regime.”
The June 9 letter cited concerns that while the bonds were intended to refinance Belarus’ external debt, the proceeds from the bonds were in fact funding Alexander Lukashenko’s regime – and could have been used to support the president’s lifestyle and ” Equipment to buy ”. and weapons for the Ministry of the Interior ”. As openDemocracy reported, there is little oversight or control over the ultimate use of the funds raised through government bonds.
The Coordinating Council is running a divestment campaign against the investment banks that hold Belarusian national debt, claiming that the bond prospectus did not mention repression against independent presidential candidates prior to the election. While the bonds were quoted on June 25, 2020, the council’s letter had already arrested two independent Belarusian presidential candidates – popular blogger Siarhei Tsikhanouski and banker Viktar Babarika – and police brutally dispersed protesters who supported independent candidates.
“There have been no events of this magnitude in previous election cycles,” the letter reads. “If you compare the pattern with the previous elections, it should have been clear at the time that new economic sanctions were being imposed on the issuer.”
The FCA did not respond to a request for comment.
As part of efforts to attract international capital, the Belarusian Ministry of Finance listed two euro government bonds on the London Stock Exchange in June 2020, signaling an obvious commitment to long-term financing in the West.
“It is doubly honorable that [our] Securities listed on the world’s leading stock exchange platform, ”said Belarusian Finance Minister Yuri Seliverstau at the time. “We hope that the cooperation between our country and the London Stock Exchange will continue.”
In the run-up to its prestigious listing, the City of London hosted a series of investor promotion events for Belarus. During a visit to London in June 2019, the former Belarusian Prime Minister Siarhei Rumas was received both by the Lord Mayor of the City of London, Peter Estlin, and at a “Belarusian Capital Markets Day” at the London Stock Exchange. It was there that Rumas met the Chairman of the Board of the Exchange, Nikhil Rathi, now Chairman of the FCA, and Alan Duncan, the former United Kingdom Secretary of State for Europe and America.
“London is where Belarus can raise the capital it needs to grow its economy,” Duncan said at the event. “Our governments are ready to continue working together, and our companies will also interact. We believe the London Stock Exchange will facilitate your economic endeavors. ”
Britain’s financial ties with Belarus have come into focus since Belarusian police force suppressed post-election protests in the country last year and authorities forced a Ryanair passenger plane carrying a dissident to land in Minsk in May 2021. In response, the European Union has sanctioned future Belarus bond issues, and Belarusian “ESG risk” – risks related to environmental, social and governance factors – has reportedly deteriorated.
With increasing pressures to invest ethically, investment banks are forced to decide which government bonds to trade – although, as the Financial Times reports, it believes it is unfair to an industry that ultimately focuses on financial returns.