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Igor Makarov in Miami, Fla., on Jan. 19, 2017.AL DIAZ/Newscom

Russian oligarch Igor Makarov, a former champion cyclist, recently steered around Canadian sanctions by selling a $121.5-million stake in oil and gas producer Spartan Delta Corp. days before being targeted by the federal government.

Mr. Makarov’s ability to cash out of his Canadian investment – the first major divestment from a public company by a Russian investor since the beginning of the war in Ukraine – demonstrates the difficulties governments face in attempting to influence Russian policy with sanctions, according to experts.

James Brander, an international economics professor at the University of British Columbia’s Sauder School of Business, said that for sophisticated individuals such as Mr. Makarov, president of Geneva-based investment firm Areti International Group, the Canadian government’s moves “are, at best, only an inconvenience.”

The U.S. Treasury Department put Mr. Makarov on its sanctions list in 2018, but he has not been sanctioned. The Canadian government went further on April 19 by sanctioning 14 “close associates” of President Vladimir Putin’s regime who were targeted for their “complicity in Russia’s unjustifiable invasion of Ukraine

Canadian sanctions freeze Mr. Makarov’s holdings in this country. The Australian government also put Mr. Makarov on its sanctions list in early April.

“Even though sanctions against individual oligarchs and political leaders do not have much direct impact on policy, I think they are important for symbolic reasons,” Prof. Brander said. “In this case, the sanctions are a way of expressing and emphasizing outrage at what is happening in Ukraine. That probably does have some positive long-run impact.”

In 1992, Mr. Makarov founded energy company Itera in Turkmenistan, where he was born. In 2013, he sold its natural gas business to Russia’s state-controlled Rosneft Oil Co. for US$2.9-billion. He then rebranded the private company as Areti and invested in Russia and neighbouring countries, as well as in Western Europe, the U.S. and the Canadian oil patch.

Areti first took a stake in Spartan in March, 2021. Until last month, Areti was the Calgary-based company’s largest shareholder, with an 18.3-per-cent interest, and had two directors on Spartan’s board. On March 28, Areti sold 15 million Spartan shares, a 9.8-per-cent interest, for $8.10 a share, according to a regulatory filing. Its two directors resigned the following week.

After raising $121.5-million from selling that portion of its stake in Spartan, Areti continues to own 8.4 per cent of the oil company, according to a regulatory filing in March. If Mr. Makarov’s company retains those shares, they are now frozen by Canadian government sanctions.

Spartan’s stock price rose by 160 per cent over the past year and closed Friday at $11.12 on the Toronto Stock Exchange. In a recent report, analyst Cameron Bean at Bank of Nova Scotia said Mr. Makarov’s share sale was a positive development for the Canadian company because it “should help ease some of the controversy surrounding Spartan stock due to Areti’s Russian ties.”

Mr. Makorov, 60, rode for the Soviet Union’s national cycling team from 1979 to 1986 and won a number of championships. He continues to be a major figure in the sport as a member of the International Cycling Union’s management committee, honorary president of the Russian Cycling Federation and sponsor of a professional Swiss-registered cycling squad, Team Katusha. In the past, Mr. Makarov’s representatives have denied he has ties to Mr. Putin.

Other recently sanctioned Russian oligarchs with stakes in Canada include Roman Abramovich, who owns 28.6 per cent of steel maker Evraz PLC, one of the largest employers in Regina. Mr. Abramovich is also currently selling London’s Chelsea football club, a process that began ahead of British government sanctions.

Editor’s note: This article has been clarified regarding Igor Makarov being named on a sanctions list in a 2018 U.S. Treasury Department report.

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