Tigers Realm Coal sues federal government over Russia sanctions
Tigers Realm Coal has launched legal action against the federal government’s sanctions preventing companies doing business in Russia.
Tigers Realm Coal, partly owned by Russia’s state investment body, has launched legal action against the federal government in the wake of Foreign Minister Penny Wong’s sanctions imposed to prevent Australian companies doing business in Russia following Vladimir Putin’s invasion of Ukraine.
The legal action was filed in the federal court on June 22, but Tigers Realm refused to answer questions put by The Australian about the purpose of the legal action. A spokesman said the company’s directors were preparing a statement for release this week.
But the company, which remains one of the few Australian-listed companies still operating in Russia more than 15 months after the invasion of Ukraine began, had previously signalled it would consider its legal options if it was not granted an exemption from Australia’s sanctions regime.
Tigers Realm operates coking coal projects in Russia, selling its product into international markets, and in April told shareholders it had been advised that continuing to do business in Russia could put the company in breach of Australia’s sanctions laws.
“DFAT’s indicative assessment is that the operations are likely to be prohibited by, or subject to authorisation under regulation 4A of the Australian Sanctions Regulations, which relates to sanctioned imports,” the company said.
At the time the company said it did not agree with the assessment and said it was “considering all avenues to mitigate risks related to Australian sanctions, including potentially seeking judicial relief”.
Ms Wong’s office also declined to comment on the suit on Friday.
According to DFAT, an exemption from the sanctions regime could only be granted if doing so “would be in the national interest”.
Tigers Realm has also floated the prospect of selling or redomiciling its business to avoid breaching the sanctions, telling shareholders in late April its board was looking at potential options for a privatisation that would include a selective capital reduction “to allow certain shareholders to realise immediate value for their shares in the company”.
Tigers Realm’s controlling shareholder is Sirtex Medical founder Bruce Gray, who holds almost 60 per cent. Guernsey-registered Baring Vostok Mining Holdings holds 18.2 per cent.
But the company may also face additional challenges given its third-biggest holder is RDIF Investment Management LLC – which a 2016 company disclosure says is a subsidiary of the Russian Direct Investment Fund, a body established by Mr Putin (then the Russian prime minister) and then president Dmitry Medvedev to encourage international investment in Russia.
RDIF was listed as a sanctioned body by Australian and US authorities in early 2022, with a statement from the US Department of Treasury saying the organisation was “widely considered a slush fund for President Vladimir Putin and is emblematic of Russia’s broader kleptocracy”.
Earlier this month a group of international transparency bodies – Transparency International Australia and Ukraine, the Australian Centre for International Justice and Ukrainian non-government organisation Razom We Stand – wrote to Ms Wong urging her to enforce Australia’s sanctions laws against the company if it kept doing business in Russia.
The letter noted that Tigers Realm paid royalties on its coal mines to the Russian government, and said its association with RDIF meant any asset transfer as part of a privatisation could mean “assets made available to them risk enriching Putin’s regime and sustaining the illegal and immoral invasion of Ukraine by Russia”.
Clancy Moore, chief executive of Transparency International Australia, told The Australian sanctions should be enforced to prevent further royalties flowing to the Russian government.
“We need greater transparency from the government about how many entities have applied for, and been successful, for permits to be exempt from sanctions,” he said.
Tigers Real warned shareholders in April the sanctions were an “existential threat”. It booked a $52.7m net profit in 2022 after producing 1.1 million tonnes of coal. Its shares last traded at 0.5c.
