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Paper: Putin order blocks Fortum sale of Russian operations

A Russian business daily reports that President Vladimir Putin issued a decree which prevents foreign energy companies from selling off their Russian operations without special permission.

Fortum has invested around 4.5 billion euros in its Russian operations, but an investigation by Yle's MOT has uncovered evidence of financial irregularities in the company's Russian unit. Image: Kimmo Brandt / EPA

Russia has frozen the sale of Finnish energy firm Fortum's Russian operations, according to a report (siirryt toiseen palveluun) by the Russian business daily Kommersant.

Kommersant's unnamed sources told the publication that Russian authorities made a decision to put the Fortum sale on ice last month. Fortum is majority-owned by the Finnish state.

A similar decision was also made about plans by the Italian energy company Enel to sell off its operations in Russia.

A decree issued by Russian President Vladimir Putin earlier this year — which prevents foreign owners of energy companies operating in Russia from selling their holdings unless they have special permission — was said by the sources to be the reason behind the moves to block the Fortum and Enel deals.

In an email to Yle, Fortum's communications department said the firm is aware of the legislative changes in Russia and is analysing the potential impact on the firm's planned exit from the country.

"As we noted back in May, any sale of the business in Russia will in any case require regulatory approval. In the energy sector, this has in the past meant approval by the Russian government commission," the company commented.

Fortum announced its intention in May to withdraw from Russia in a "controlled manner".

Kommersant reported (siirryt toiseen palveluun) in June that Fortum was collecting takeover bids, and Russian energy companies such as Gazprom and Inter RAO have been seen as potential buyers.