March 20, 2014 / 5:49 PM / 6 years ago

UPDATE 2-U.S. sanctions hit Gunvor co-founder, Rotenberg brothers

(Adds details on Timchenko’s sale of Gunvor stake, Arkady Rotenberg’s holdings, comment by U.S. Treasury; paragraphs 2-3, 10-12, 17)

By Tom Miles

GENEVA, March 20 (Reuters) - The United States added Russian billionaires Gennady Timchenko and Boris and Arkady Rotenberg to its sanctions list on Thursday, potentially dragging their huge and far-reaching business interests into the standoff between Russia and Ukraine.

Until this week, Timchenko owned 45 percent of Gunvor, the Swiss-based oil trading firm that he co-founded in 1997. He is a non-executive director of Russian gas company Novatek and was awarded the French Legion d’honneur last year.

The Rotenbergs are brothers. Arkady, the elder brother, is a long-time judo sparring partner of Russian President Vladimir Putin and owns Stroygazmontazh, a builder of oil and gas pipeline projects for Russian state and private energy companies.

“Putin has investments in Gunvor and may have access to Gunvor funds,” the U.S. Treasury said as it added Timchenko to its list of “Specially Designated Nationals”. People on the list have their assets blocked and U.S. persons are generally prohibited from dealing with them.

Gunvor said in a statement it was outraged by the U.S. Treasury’s linkage of Putin and Gunvor.

“President Putin has not and never has had any ownership, beneficial or otherwise in Gunvor. He is not a beneficiary of Gunvor or its activities. Any understanding otherwise is fundamentally misinformed and outrageous,” the company said.

“Regarding the designation of Mr. Timchenko, we are currently assessing the potential impact on our business.”

It was unclear what the repercussions would be on Gunvor, which is based in Geneva. Switzerland has not announced any sanctions against Russia.

The Rotenbergs and Timchenko were among 20 Russians placed under sanctions by the United States on Thursday. President Barack Obama threatened broad penalties against key sectors of Russia’s economy if Moscow moves deeper into Ukraine.

Timchenko sold his stake in Gunvor to its chief executive, Torbjorn Tornqvist, this week as part of what the company called a “contingency plan” in a statement.

Gunvor said Tornqvist now owned 87 percent in the company, with the rest being held by employees.

The U.S. Treasury said it advised caution when considering transactions with a company that may be controlled by a sanctioned person, but it added that Timchenko’s stake in the company is below the 50 percent threshold that would automatically trigger sanctions on Gunvor.

Gunvor had turnover of $93 billion in 2012, according to a factsheet on its website, earning $433 million. It traded around 2.5 million barrels of oil a day, the factsheet showed, the equivalent of almost 3 percent of global supplies.

The company has more than 60 global banking partners, the factsheet said, and sources crude oil from 35 countries. Gunvor employed more than 1,600 people in 2012.

Tornqvist told Reuters in November that the company was studying growing opportunities in North America resulting from the shale oil boom, including exporting liquid petroleum gas, and looking at select trading assets.

Gunvor owns a $400 million stake in the Signal Peak coal mine in Montana that it bought in 2011.

Arkady Rotenberg has a stake in Russia’s largest bridge builder Mostotrest through investment vehicle Marco Polo Investments, where he is a main shareholder. Both his firms were involved in construction work for the Sochi winter Olympic Games held last month.

To see the U.S. Treasury’s announcement, click:

here (Additional reporting by David Sheppard in London and Edward McAllister in New York; Editing by Dale Hudson, David Evans and Mohammad Zargham)

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