HomeNewsShares in Russia's Novatek fall on arrest of deputy head in U.S.

Shares in Russia's Novatek fall on arrest of deputy head in U.S.

9/24/2021

Shares in Russia’s leading non-state natural gas producer Novatek fell on Friday following the arrest in the United States of deputy head Mark Gyetvay, seen as a key figure in the firm’s investor relations at a time of major expansion.

The U.S. Department of Justice said on Thursday that Gyetvay had been arrested on tax charges related to $93 million hidden in offshore accounts. He faces a lengthy prison sentence if convicted of the charges.

Novatek said in a statement it was trying to find out the details of the arrest, adding it would have no impact on the company’s operations. Novatek shares were 1.4% down in the afternoon trade, weaker than the overall market which was 0.2% lower. They fell more than 4% at the opening.

Gyetvay has been the leading voice at Novatek, anchoring conference calls with investors and presenting the company at a major industry events as it seeks funds for significant liquefied natural gas (LNG) projects.

“He has played an important role in the company’s strategic planning and he has been pivotal in establishing the excellent relations the company has with its shareholder base. Therefore, we expect a negative stock reaction in the short term,” Russian VTB Bank said in a note to clients.

New Jersey-born Gyetvay, 64, moved to Russia in 1995 and worked as a partner at PwC Global Energy. In 2019 Russian President Vladimir Putin granted him the Russian passport, a move, seen potentially helping the U.S. national bypass some sanctions restrictions.

A Kremlin spokesperson said Russian diplomats were ready to provide legal assistance to Gyetvay in the United States.

“Because this individual is also a citizen of the Russian Federation, if I understand this correctly, he has dual citizenship, of course we are interested in his future and the circumstances of the case,” Dmitry Peskov told a daily conference call.

Novatek commissioned its first liquefied natural gas (LNG) plant in the Arctic called Yamal LNG in 2017 in a challenge to state-controlled Gazprom, which has exclusive rights for export of Russian gas via pipelines.

The company also wants to build more LNG plants in the Russian Arctic and is in the middle of attracting funds of more than 9 billion euros ($11 billion) for its Arctic LNG 2 project, to be raised from the Russian banks, Japan, China and elsewhere.

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