Blackrock stops Russia investments after criticism on Polymetal

A day after Russian forces crossed the Ukraine border, BlackRock bought more shares in Polymetal, part-owned by Alexander Nesis, a Russian billionaire, for £12m, taking its stake to 10.1%.

“This trade would not be permitted by the policy BlackRock instituted on Monday, which we believe reflects BlackRock’s and our clients’ values,” it said in its statement.

Shares in Polymetal have plunged more than 70% as the West denies Russian banks access to financial payment systems in response to the invasion of Ukraine. The company is due to report results on Wednesday and expected to pay a dividend to shareholders.

BlackRock is led by Larry Fink who champions responsible capitalism. However, his slow response to the crisis, and Blackrock's Polymetal deal came in for criticism.

‘It does seem to fly in the face of what Mr Fink has been saying repeatedly and over a long period of time," David Morrison, ethical investing analyst at Trade Nation, told the Daily Mail.

"You would think Mr Fink would make a statement on what the company is going to do going forward in reaction to the Russian invasion against Ukraine."

One of Polymetal’s largest investors, the massive Norwegian sovereign wealth fund, has said it is divesting its Russian investments. To add to the miner’s woes, it is about to be booted from its prestigious place in London’s FTSE 100 index of blue-chip stocks.

Fellow Russia-exposed miner Evraz has also been battered by the sanctions, imposed after President Vladimir Putin ordered an unprovoked invasion of Ukraine.

Shares in Evraz are down by 55% over the last five days, meaning heavy losses for Roman Abramovich, the owner of Chelsea football club, who holds a 30% stake in the company.

Polymetal’s main customers are Russian banks who sell it on to international gold markets.