Subject: Request to the European Commission to Investigate the Sale of Raiffeisen Bank’s Subsidiary in Belarus
The Honorable Ursula von der Leyen
President of the European Commission
The Honorable Kaja Kallas,
Vice-President of the European Commission
Dear President von der Leyen,
Dear Vice-President Kallas,
On behalf of the Belarus Democratic Forum, we respectfully request the European Commission to initiate a comprehensive investigation into the transaction conducted by Raiffeisen Bank International AG (RBI) involving the sale of its 87.74% stake in Belarus' Priorbank. This transaction appears to constitute clear violations of EU transparency regulations, market abuse laws, financial accountability standards, and discriminatory practices.
Immediate action is necessary to uphold the principles of good governance, transparency, and equality within the European Union.
Violation of EU Transparency Obligations
RBI announced the sale of its stake in Priorbank in November 2024, reporting a €830 million negative impact on its consolidated income statement.
Despite the requirements under the Market Abuse Regulation (MAR) (EU No. 596/2014), the Prospectus Regulation (EU 2017/1129), and the Transparency Directive (2004/109/EC), the sale price remains undisclosed. This blatant lack of transparency deprives 1.7 million shareholders of their lawful right to access essential transaction details.
Unjustifiable Financial Discrepancies
In September 2024, RBI projected a €300 million negative impact. By November 2024, this figure inexplicably escalated to €830 million, nearly a threefold increase. Such a dramatic discrepancy is unacceptable for any public company and calls for accountability regarding the bank’s financial operations.
Buyer Selection and Conflicts of Interest
The buyer, UAE-based Soven 1 Holding Limited, was established in 2024 with no prior financial activity. Its CEO, Suhail Al Otaiba, also leads two other newly formed companies in unrelated industries.
Mr. Al Otaiba’s financial background is entirely inconsistent with the resources required to acquire a major banking institution. Before becoming the CEO of Soven 1 Holding, he served as Head of Strategic Client Coverage at Abu Dhabi-based ADSS, earning an estimated annual salary of $80,000 to $120,000. This background raises serious concerns about his capacity to fund and manage such a significant transaction, strongly suggesting that he may be acting as a nominal director for undisclosed beneficiaries.
Potential Explanations for the Deal
- Cover Contracts to Conceal True Ownership
RBI has not exited the Belarusian market. Instead, the bank appears to have entered into a cover contract with Suhail Al Otaiba, who acts as a frontman, while RBI continues to manage Priorbank. This practice echoes RBI’s historical behavior during the Second World War, when the bank was nationalized by the Nazis, later returned to its original owners, and avoided the accountability faced by the majority of German and Austrian companies and financial institutions.
B. Personal Involvement of RBI’s Top Management
Investigations suggest that RBI’s top executives may have personally benefited from the transaction. By using Suhail Al Otaiba as a nominal director, they could potentially position themselves as the hidden owners of Priorbank, leveraging shareholder funds to generate personal wealth equivalent to the €830 million declared loss in RBI’s value.
C. Transformation of Priorbank into a Lukashenko Family Bank
During Mr. Al Otaiba’s tenure as Head of Strategic Client Coverage at ADSS, Belarusian dictator Alexander Lukashenko’s sons, Viktor and Dmitry Lukashenko—both under EU sanctions—frequently visited the UAE under the pretext of “promoting Belarus’ trade relations.” However, during this period, Belarusian exports declined from $73.4 million in 2017 to $28.8 million in 2022, suggesting that their true motives were to misappropriate funds belonging to the Belarusian people.
With the assistance and personal interests of RBI’s top management, Priorbank could become a personal asset of the Lukashenko family.
Request for Actions
The European Union has allocated over €70 billion in aid to counter Russian aggression and support Ukraine. RBI’s continued operations in Russia and Belarus directly undermine these efforts, with the bank’s financial contributions sustaining regimes that the EU is actively working to neutralize.
Therefore, we respectfully request the European Commission to:
- Investigate how RBI remains the only major financial institution unaffected by EU sanctions, despite its substantial involvement in sanctioned markets.
- Investigate whether RBI violated its obligations under the Market Abuse Regulation (EU No. 596/2014) and other transparency laws by withholding critical details about the sale price and terms of this transaction.
- Investigate the use of lobbying efforts by RBI, particularly its reported influence in pressuring Ukrainian authorities to remove it from the “International Sponsors of War” list. Reports suggest this exclusion involved significant pressure on Ukrainian authorities, including threats to withhold assistance if RBI was not removed from the list maintained by the Ministry of Anti-Corruption.
- Investigate the unexplained increase in RBI’s reported losses from €300 million to €830 million, holding the bank accountable for any financial manipulation.
- Scrutinize the buyer, Soven 1 Holding Limited, and its connections to politically exposed persons, including any links to sanctioned individuals or entities.
- Examine the alleged cover contract mechanism and investigate the personal involvement of RBI’s top management in potentially exploiting shareholder funds for personal enrichment.
- Determine whether funds from European shareholders were misappropriated and redirected to individuals associated with the Lukashenko regime in violation of EU sanctions.
Permitting RBI to evade scrutiny undermines shareholder confidence, destabilizes financial markets, and erodes the EU’s commitment to equality, accountability, and the rule of law.
Broader Implications
During the investigation, it is essential to impose temporary sanctions on Austrian nationals Johann Strobl (CEO of RBI) and Erwin Hameseder (Chairman of the Supervisory Board), similar to those imposed on Latvian citizen Petr Aven and Israeli citizen Mikhail Fridman, top executives of Alfa Bank, who faced property deprivation and movement restrictions. Notably, Alfa Bank is likely less integrated into the Russian economy compared to Raiffeisen Bank International (RBI), which effectively functions as a de facto Russian bank in terms of profit generation, surpassing the combined profits of all 12 European subsidiaries, including those in Germany and Austria.
Articles 18 and 19 of the Treaty on the Functioning of the European Union (TFEU) prohibit discrimination based on nationality, ethnicity, or religion. These provisions mandate that the EU treat all individuals equally, and that an individual's Austrian ethnic background or the formal registration of a company should not serve as justification for repeating historical injustices or failing to uphold the principles of fairness and equality.
Our request is based on the following EU regulations:
- The Market Abuse Regulation (MAR) (EU No 596/2014), which mandates timely and accurate disclosure of material information to ensure market transparency;
- The Prospectus Regulation (EU 2017/1129), which requires comprehensive disclosure of securities transactions to protect investor interests;
- The Transparency Directive (2004/109/EC), which ensures that investors receive timely and reliable information on major financial operations;
- The EU Charter of Fundamental Rights, Article 41, which guarantees transparent and reasoned decision-making by EU institutions;
- The Treaty on the Functioning of the European Union (TFEU), Articles 18 and 19, which prohibit discrimination based on nationality, ethnicity, or religion.
Under Article 227 of the TFEU, we assert our right to petition the European Commission on matters relating to EU laws and regulations, and we invoke the right to good administration, as outlined in Article 41 of the EU Charter of Fundamental Rights, which guarantees a timely and reasoned response to such requests.
We kindly request that the European Commission confirm receipt of this inquiry and provide information on the outcomes of any investigations or decisions made regarding this matter.
Sincerely,
Belarus Democratic Forum