Co-founders of Mikhail Fridman’s LetterOne quit board

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LONDON – The three LetterOne shareholders not hit by Western sanctions have quit as directors and will no longer earn any income from the London-based investment group they co-founded with oligarch Mikhail Fridman as it tries to distance itself from Russia.

The investment group said its new board, led by Chairman Mervyn Davies, would work to protect the 120,000 jobs associated with the group’s holdings after the European Union slapped sanctions on Fridman and co-founder Petr Aven last week.

LetterOne, which counts telecoms groups Veon and Turkcell in its portfolio, said the three departing directors – German Khan, Alexey Kuzmichev and Andrei Kosogov – had not been sanctioned but they believed stepping down was the right thing to do.

Fridman and Aven’s shareholdings are frozen indefinitely and they cannot receive dividends or any other financial benefit from LetterOne, the company said.

The two long-term partners, who earned billions of dollars from oil, banking and retail, vowed last week to contest the EU sanctions imposed in retaliation for Russia’s invasion of Ukraine.

Both said EU allegations against them were false and defamatory.

LetterOne said on Monday it would make a donation of $150 million to those affected by war in Ukraine.

“LetterOne’s shareholders have also agreed that all dividends from LetterOne will be paid to ongoing relief efforts for the foreseeable future,” the group said in a statement.

Chairman Mervyn Davies said: “The new board and I will focus on protecting the enormous economic and social contribution LetterOne makes.

“I am also determined to ensure that the 120,000 jobs throughout the UK, US and Europe are protected.”

(Reporting by Kate Holton and Paul Sandle; Editing by Alistair Smout and Mark Potter)