JPMorgan Emerging Europe, Middle East & Africa (JEMA ) has again warned investors that it may not be able to realise any value from its assets trapped in Russia as JPMorgan appeals a lawsuit against Kremlin lender VTB Bank.

The chair of the former JPMorgan Russian Securities trust, Eric Sanderson, used the confirmation of an appeal hearing date for February to reiterate the uncertainty of clawing back its frozen assets.

‘Following the confirmation of the appeal hearing date in respect of the company and the company’s sub-custodian (JPMorgan Bank International), which are both included as defendants in the VTB case referred to above, I reiterate...the impact that these unprecedented circumstances may have on the company’s Russian assets which have created much uncertainty of these values ever being realisable by the company,’ he said. 

The appeal hearing will take place on 26 February, and no seizure of JPMorgan – or JEMA – assets under the judgement can take place until the appeal is heard.

Despite writing down the valuation of the Russian assets effectively to zero, the possibility of achieving some value from them has driven the shares in the £34m trust to a whopping 265% premium. 

Earlier this year, Kremlin-run bank VTB obtained a Russian court order to seize $440m in JPMorgan funds made up of dividends and other payments from Russian companies that are held in a neutral, or escrow, account in the US in line with global sanctions.

VTB has filed an additional two lawsuits, for $81.3m and $74.5m, against JEMA and other JPMorgan entites, which are also in progress. 

JEMA currently has 26 Russian securities and cash frozen in a custody account, also known as an ‘S’ account, in Moscow. The balance totalled £25.2m at the start of May in addition to £7.9m expected to be received. However, these assets were valued by the trust at just £1.5m in half-year results at the same time.

The Russian securities – which include the likes of Lukoil, Gazprom, and Sberbank – made up 7.8% of the portfolio but are no longer part of the reference index following exclusion and the closure of the Moscow Stock Exchange to overseas investors after the 2022 invasion of Ukraine.

In October, a Russian court ruled in VTB’s favour and stated that defendant JPMorgan had 30 days from the ruling to appeal, which it has now done.

JEMA has warned that the ruling could result in the insolvency of JPMorgan Bank International, the sub custodian of its Russian assets in Russia, or impact its ‘ability to continue to operate under instruction from JPMorgan’ and safeguard client assets.