National Pension Service and KIC Have 485 Billion Won Locked in Russian Stock Market

The National Pension Service and the Korea Investment Corporation (KIC) have been unable to recover assets worth a total of 485 billion KRW from the Russian stock market. This is due to economic sanctions imposed by Western countries following the invasion of Ukraine, which prohibit the repatriation of foreign assets.

The National Pension Service has 433 billion KRW worth of assets tied up in major Russian companies such as Sberbank and Lukoil, while KIC has also been unable to recover approximately 52 billion KRW in assets.

According to data submitted by the National Pension Service and KIC to Ahn Do-geol, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, on the 21st, both institutions have been unable to recover assets worth 485 billion KRW from the Russian stock market.

KIC's investment in Russian stocks and bonds decreased sharply by 80%, from 310 billion KRW at the end of 2021 to 63 billion KRW at the end of 2023. The National Pension Service's investment in Russian stocks and bonds is estimated to have decreased by 26%, from 589.3 billion KRW at the end of 2021 to 433.2 billion KRW at the end of 2023.

As of the end of 2023, the National Pension Service was unable to recover 433 billion KRW (62 million USD, based on the exchange rate at the time) from the Russian stock market. The assets involved include investments in Sberbank (93 billion KRW), energy companies such as Lukoil (80 billion KRW), Gazprom (40 billion KRW), Tatneft (20 billion KRW), Rosneft (14 billion KRW), and platform company Yandex (14 billion KRW).

KIC also appears to have deferred liquidation of investments worth nearly 52 billion KRW (40 million USD, based on the exchange rate at the time) in the Russian stock market.

The National Pension Service responded to Ahn Do-geol's office, stating, "Due to Western sanctions and measures by Russian authorities, the inflow and outflow of funds are prohibited, and foreigners cannot sell or repatriate funds to their home countries," adding, "Recovery will be possible once the sanctions are lifted."

Assemblyman Ahn Do-geol pointed out, "There was sufficient time to liquidate positions in the Russian stock market, which had been declining due to rising tensions since the second half of 2021, until the invasion of Ukraine in February," and added, "Although it may be small compared to the total assets managed by the National Pension Service and the sovereign wealth fund, the opportunity cost of nearly 500 billion KRW of public funds being tied up is not insignificant." He further stated, "A proactive strategy that can respond immediately once sanctions are lifted should be established in consultation with asset managers."