Billionaire Prokhorov to Tap Russia’s Growing Dissent in Bid Against Putin

Billionaire Mikhail Prokhorov is seeking to tap the dissent that sparked Russia’s biggest anti- government demonstrations in a decade, pledging to run against Prime Minister Vladimir Putin for the presidency next March.

“Society is awakening,” the New Jersey Nets basketball team owner told reporters in Moscow yesterday after announcing his candidacy in the wake of protests against fraud in a Dec. 4 parliamentary vote.

Prokhorov’s Onexim Group today said it’s seeking to buy fellow billionaire Alisher Usmanov’s Kommersant publishing house, which runs the country’s oldest business daily. Usmanov, who fired the editor of Kommersant Vlast for printing a photo of a ballot defaced with an obscenity against Putin, said through his press service that he has “no plans to sell” Kommersant.

Thousands of Russians took to the streets to protest the results of a parliamentary contest that observers from the U.S. and Europe said was neither free nor fair. Prokhorov, 46, Russia’s third-richest man with a fortune Forbes magazine put at $18 billion, said he plans to build grassroots support and that he opposes “revolution” and “populism.”

Venting ‘Channel’

“He could certainly act as a channel to vent out the frustration of many young professional voters,” Lilit Gevorgyan, a London-based analyst at IHS Global Insight, said yesterday by e-mail. “His entry could be a game changer in what otherwise seems to be a perfectly controlled vote.”

Onexim Group, the holding company for Prokhorov’s stakes in aluminum producer United Co. Rusal (486), gold miner Polyus Gold International Ltd., investment bank Renaissance Capital and the RBC television channel, is planning a bid for Kommersant, Chief Executive Officer Dmitry Razumov said by phone.

Maxim Kovalsky, editor of Kommersant Vlast, was dismissed because he published a photo containing “indecent language,” Usmanov’s press service said by e-mail from Moscow today. Andrei Galiev, general director of the media group that manages the weekly, ZAO Kommersant Holding, was also fired, it said.

Russia’s benchmark Micex Index (INDEXCF) of 30 stocks rallied for the first day in three, adding 2.1 percent to 1,378.56 at the close in Moscow after last week’s 7.3 percent decline, the biggest in almost three months. The ruble was little changed against the dollar after weakening for eight straight trading sessions against the U.S. currency.

Biggest Setback

Putin’s ruling United Russia party suffered its biggest setback since he came to power a decade ago, with its majority in the State Duma eroded to 238 of the legislature’s 450 seats from 315 in 2007 as stalling wage growth and the government’s shortcomings in curbing corruption repelled voters.

An opposition crowd of 25,000 people rallied in central Moscow on Dec. 10, according to police, in the city’s largest anti-government protest since Putin first became president in 2000. A same-sized demonstration occupied Red Square yesterday in support of United Russia, authorities said.

“This is the most important decision of my life,” said Prokhorov, who quit as leader of the Right Cause party on Sept. 15 after accusing President Dmitry Medvedev’s administration of blocking the group’s preparations for the parliamentary vote.

Prokhorov is seeking to be an “integrator” who can unite Russia’s liberal opposition, the billionaire told the Interfax news service yesterday in an interview.

‘Latest Wrinkle’

Prokhorov’s entry into the race “is simply the latest wrinkle in an astonishing election season,” Otkritie Financial Corp. analysts led by chief economist Vladimir Tikhomirov said in an e-mailed research note today.

“We expect that in a week’s time the Medvedev-Putin ruling tandem will announce another important decision regarding the tactics of the presidential campaign,” Otkritie said. “We do not rule out that President Medvedev could step down from the presidency, which would automatically transfer his duties to the prime minister, Vladimir Putin.”

Prokhorov may have the backing of ousted Finance Minister Alexei Kudrin, who told the Vedomosti newspaper in an interview published yesterday that he supports the creation of a new right-of-center party, a topic he has discussed with Prokhorov. Kudrin was the second longest-serving minister in the government when he resigned Sept. 26, citing disagreements with Medvedev over spending.

‘Right-Liberal’

The statements by Kudrin and Prokhorov reflect the growing need for a “right-liberal” party, said Olga Kryshtanovskaya, a sociologist who studies the country’s elite at the Russian Academy of Sciences and has been a member of the ruling party since 2009.

“I don’t rule out that Putin will move closer to the right,” she said. “Many people will welcome creating such a party and will join under Kudrin’s banner. People in the right flank have longed for unification.”

Russia needs a new party to accommodate “annoyed” city residents, Vladislav Surkov, Medvedev’s first deputy chief of staff, said of the protests in an interview posted on the Ekho Moskvy radio station’s website on Dec. 6.

Prokhorov’s candidacy may be a ploy to benefit Putin by legitimizing the March vote through the appearance of genuine competition, said Sergei Markov, a former United Russia lawmaker who heads the Institute of Political Studies in Moscow.

‘Glamorous Oligarch’

“There are two possibilities here, either it’s something agreed with Putin to bolster the legitimacy of the presidential elections after the recent protests or Prokhorov could be jumping on the bandwagon of the protests,” Markov said by phone in Moscow. “Prokhorov is a glamorous oligarch and he’s got plenty of money to spend on promoting himself.”

Stanislav Govorukhin, the film director Putin tapped to lead his presidential campaign, declined to comment on Prokhorov’s candidacy or Putin’s strategy for addressing the protesters, when Bloomberg reached him yesterday by phone.

Dmitry Peskov, Putin’s spokesman, said the premier is aware of Prokhorov’s political intentions, adding that it’s every Russian’s right to run for president, news services including state-run RIA Novosti reported.

Medvedev ordered an investigation into allegations of ballot-stuffing in the parliamentary poll as the swelling resentment threatened to weaken Putin’s Kremlin bid.

Putin served the maximum two consecutive terms from 2000 to 2008, when he stepped aside in favor of his protégé Medvedev. Putin said in September that he’d appoint Medvedev prime minister if he wins in March.

Longer Term

Parliament lengthened the presidential term to six years from four years after Medvedev came to office, giving Putin the opportunity to prolong his stay in power to a quarter century.

Prokhorov said Putin and Medvedev declined to meet with him to discuss his presidential bid and that he’ll spend 10 percent of his campaign criticizing Putin and the rest laying out his proposals. He also said he isn’t afraid of suffering the fate of jailed former Yukos Oil Co. billionaire Mikhail Khodorkovsky.

Khodorkovsky was Russia’s richest man when he was arrested at gunpoint on the tarmac of a Siberian airport in October 2003. He was sentenced to a total of 13 years in two separate convictions for fraud, tax evasion and oil embezzlement as Yukos was dismantled and sold at auction to cover more than $30 billion in back taxes. Khodorkovsky, who denies any guilt, says he was targeted by Putin for financing opposition parties.

Prokhorov said he’ll need about a month to file all the paperwork and collect the 2 million signatures needed to be included on the ballot as an independent.

“Prokhorov’s task is to help Putin get elected,” said Boris Nemtsov, a former deputy prime minister under the late President Boris Yeltsin. “A billionaire would never have taken such a risk if he hadn’t had an agreement with Putin.”

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Lyubov Pronina in Moscow at lpronina@bloomberg.net

To contact the editor responsible for this story: Brad Cook at bcook7@bloomberg.net

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