LONDON (Reuters) - Austrian authorities have urged Raiffeisen Bank International to drop a deal linked to a Russian oligarch fearing a backlash from the United States, people familiar with the matter said, a blow to its plans to unlock funds stranded in Russia.
Raiffeisen (RBI), the biggest Western bank in Russia, wants to buy a stake in construction group Strabag linked to Oleg Deripaska for 1.5 billion euros ($1.6 billion), a contested deal that has renewed international pressure on the Austrian lender.
In recent weeks, Austrian central bank officials have warned Raiffeisen about the deal, cautioning that it could backfire if the U.S. penalises the bank, said one person with direct knowledge of those discussions.
The move had come under fire from the U.S. Treasury because Deripaska is sanctioned, exacerbating tensions between Washington and Raiffeisen, which is already under scrutiny from U.S. sanctions enforcement agency OFAC.
Other Austrian public officials have also privately cautioned the bank away from the sale, believing it could be declared a breach of sanctions, said two people with direct knowledge of those discussions.
A spokesperson for Raiffeisen said the "acquisition of Strabag shares remains subject to the compliance review of RBI", adding that it "will not buy the shares from Mr. Deripaska nor any other sanctioned person or entity".
A central bank spokesperson declined to comment.
A spokesperson for Deripaska said he had "had nothing to do with Strabag for a long time" and would not comment, describing Western sanctions against him as "totally misguided" and "based on false information".
($1 = 0.9321 euros)
(Additional reporting by Alexandra Schwarz-Goerlich in Vienna; editing by Elisa Martinuzzi and Tommy Reggiori Wilkes)
By Francesco Canepa and John O'Donnell
