Friday, 1 June 2018

Roman Abramovich 1 - Theresa May 0

Roman Abramovich 1 - Theresa May 0

Delaying the approval of a British Visa for Roman Abramovich was a very clear political move and yet another way of bothering Russian investors and in this particular case a Russian investor that is said to be close to President Putin.

Roman Abramovich has been investing in the United Kingdom and not just for personal gain. Knee-jerk reactions of the Conservative government led by Theresa May have the foreseeable negative repercussions that apparently none of Prime Minister Theresa May's advisers - since the Prime Minister seems to be blind - is unable to mention. 

Prime Minister Theresa May's set out on a collision course with Russian investors and as it could have been predicted, Roman Abramovich cancel planned investments for one billion Pound. Obviously, the Prime Minister was not aware of the consequences for Kensington and Chelsea. As it transpires, as part of the process of approval of the planning application for developments, Roman Abramovich had agreed to provide the local authority of Kensington and Chelsea the amount of 22 million Pound for community improvements. 

It is absolutely logical that if you attack the person that is supposed to provide funding you are not going to get any funding but problems don't end with this major issue. The running of Chelsea Football Club has itself being put in jeopardy. The club could go from riches to rugs overnight. Who will be the manager for the new season? Will the club be able to take advantage of the transfer window to acquire/sell players? Would you want to sign a contract with a football club whose future looks uncertain? Despite what club representatives believe, Roman Abramovich could suddenly decide to put the club for sale. 

Israel has given Roman Abramovich the possibility of not paying taxes for a very long time and the assurances that as long as monies are invested in Israel the issue of where the money comes is irrelevant. To put it mildly, Israel is giving Roman Abramovich what Britain will still give to investors from Saudi Arabia and from other countries.

This goes to show how miscalculation can lead to disaster as concerns rise about trading environments. Some countries are already asking for lifting of sanctions against the Russian Federation. US just announced new import taxes to be applied to EU products including steel and aluminium. EU is said to be preparing a counter attack. Britain's losses will be somebody else's gains. If US import taxes mean rising unemployment in UK and EU the entire political scene could change dramatically leading to polarisation. It is already happening in Austria, Hungary, Poland and Italy and the seeds of major changes have already been planted in Germany where car manufacturers and related industries could see exports plummet. 

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