UK Orders Firm Linked to Russians to Sell Broadband Provider

(Bloomberg) -- UK Business Secretary Grant Shapps ordered a company founded by sanctioned Russian businessmen to sell its holding in a broadband company operating in eastern England, citing a risk to national security.

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LetterOne Holdings, the investment company founded by billionaires Mikhail Fridman, Petr Aven and German Khan, must sell its entire stake in Upp Corp., according to the order, which doesn’t announce the deadline.

“The final order and its provisions are necessary and proportionate to prevent, remedy, or mitigate the risk to national security,” according to the decision. Upp was also told to conduct a security audit of its network prior to the sale.

Shapps used powers under the National Security and Investment Act, which came into effect in January and expanded the range of transactions in which the government could intervene on security grounds.

Fridman, Aven and Khan have been sanctioned by the UK as part of a wave of restrictions imposed on prominent Russians in the wake of the invasion of Ukraine.

LetterOne said in an emailed statement that it is “disappointed by the government’s decision, and that it has taken “fast, decisive action to put in place strong measures to distance L1 from its sanctioned shareholders.”

“They have no role in L1, no access to premises, infrastructure, people and funds or benefits of any description,” according to the statement. “We believe that L1 ownership of Upp is not a threat to national security in any way.”

LetterOne’s L1T FM Holdings UK Ltd. completed its acquisition of a 100% stake in Upp — previously called Fibre Me Ltd. — in January 2021, more than a year before Russia invaded Ukraine.

Shapps on Monday also issued an order to block the proposed acquisition of HiLight Research Limited by SiLight (Shanghai) Semiconductor Ltd., also citing national security risks.

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