(Adds comments from Sulzer, Credit Suisse)
By Rupert Pretterklieber and Oliver Hirt
ZURICH, April 11 (Reuters) - Big banks UBS and Credit Suisse halted trading shares in Swiss pumpmaker Sulzer, traders in Zurich said on Wednesday, amid uncertainty over U.S. sanctions on its largest shareholder, Russian billionaire Viktor Vekselberg.
Sulzer's U.S. bank accounts were frozen for certain transactions after sanctions were levied last week against Vekselberg and other oligarchs close to Russian President Vladimir Putin as punishment for alleged Russian meddling in the 2016 U.S. election and other "malign activity".
Chief Executive Greg Poux-Guillaume told Swiss newspaper Finanz und Wirtschaft he was working to free Sulzer from sanctions, actions that include a share buyback to reduce Vekselberg's 63 percent stake via his investment vehicle Renova to less than 50 percent.
"We can no longer do U.S. dollar transactions. The banks won't process these," a Sulzer spokesman said.
"There are some exceptions, like paying employees and suppliers. We can work on existing orders, but we can't do any new business."
The company is counting on the account freezes to be lifted within days, the spokesman added.
UBS said it was following current sanctions levied by Switzerland, the United Nations, the European Union and the United States, when asked about its Sulzer trading stop.
Credit Suisse said: "We are working to understand the extent of the impact of the new U.S. sanctions, and will take action accordingly."
Separately, MSCI Inc, a provider of research-based indexes and analytics, is considering whether to delete Sulzer from its MSCI Equity Indexes due to Renova's being slapped with sanctions. Without clarity by April 16, the Swiss firm would be deleted on April 18, MSCI said.
Sulzer shares have tumbled a fifth since the U.S. sanctions emerged last week, including Wednesday's 6.6 percent drop at 1130 GMT that sent the stock below 100 Swiss francs for the first time since 2016.
Shares of other Swiss companies in which Renova and Vekselberg own sizable shares, OC Oerlikon and Schmolz & Bickenbach, have also dipped. Both have said they are not subject to sanctions and do not expect significant impact.
Vekselberg, a collector of Faberge eggs dating to Imperial Russia, has been entangled in controversy for years with his Swiss holdings. [reut.rs/2GOSqqg ]
In 2010 he and other investors paid 10 million Swiss francs ($10.45 million) to end an investigation into whether they violated disclosure rules while building up a Sulzer stake. reut.rs/2HgCRqS
$1 = 0.9572 Swiss francs Reporting and writing by John Miller; Editing by Michael Shields