Legal Games End up Forcing BNY Mellon to Partially Freeze Kazakh SWF Assets
A series of complicated legal battles in multiple jurisdictions has led to partial assets of a sovereign wealth fund being frozen by a custodial bank. Bank of New York Mellon (BNY Mellon) has frozen US$ 22.6 billion in assets that are held by Kazakhstan’s National Oil Fund. The Justice Ministry of Kazakhstan acknowledged that BNY Mellon had initially decline to freeze assets of the National Fund in response to rulings via the courts in Belgium and the Netherlands. However, on October 30, 2017, BNY Mellon had changed its position and moved to freeze the assets, according to the Justice Ministry of Kazakhstan.
Moldovan businessman Anatolie Stati and his son Gabriel Stati, and two of their companies – Ascom Group, S.A. and Terra Raf Trans Traiding Ltd., are in a multi-year legal war against the Kazakhstan government. The Moldovan businessmen claim they were harassed by the Kazakhstan government to forcibly sell their investments in the country’s oil and gas industry at a below market price. The Kazakhstan government denied the allegations against the Stati parties. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
South Korean financial giant Shinhan Financial Group Co., Ltd. reached a preliminary agreement with KKR & Co. to form a series of global buyout funds that could raise up to 5 trillion KRW. KKR and Shinhan signed a Memorandum of Understanding (MoU) in Seoul in early October. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
There was speculation that Norway Government Pension Fund Global (GPFG) could be managed outside of Norges Bank. The Norwegian government shot down this idea and recommended Norway’s GPFG remain in Norges Bank. This recommendation came in the form of a white paper submitted to the Norwegian Parliament, Stortinget.
Norway’s Minister of Finance Siv Jensen, commented in a press release, “The Government proposes a new and modernised governance structure for Norges Bank. Moving forward, this new structure lays the foundations for the sound management of the central bank and of the GPFG.”
Some Central Bank Recommendations
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Invesco Ltd. signed a deal to acquire OppenheimerFunds, Inc. from Massachusetts Mutual Life Insurance Company (MassMutual). In turn, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.5% stake. This strategic transaction will bring Invesco’s total assets under management (AUM) to more than US$ 1.2 trillion. The transaction is expected to close in the second quarter of 2019, pending necessary regulatory and other third-party approvals. The transaction gives Invesco access to more third-party distribution platforms.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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