Billionaire Prokhorov Tempts Khodorkovsky Fate in Clash With Kremlin
Mikhail Prokhorov, Russia’s third- richest man, is jeopardizing his investments by accusing the Kremlin of orchestrating a “hostile takeover” of his political party before national elections, analysts said.
Prokhorov resigned as chairman of Pravoye Delo on Sept. 15 and blamed the first deputy head of the presidential administration, Vladislav Surkov, of blocking the pro-business party’s preparations for parliamentary elections in December. Yesterday, the Kremlin said it removed Prokhorov from a commission on modernizing the economy that includes Surkov.
“Being kicked off such a commission means losing access to the president and prime minister, which billionaires in Russia need to maintain their wealth,” said Mikhail Vinogradov, head of the Petersburg Politics Foundation, a research group based in the country’s second-biggest city.
The Kremlin yesterday replaced Prokhorov and two other members of the advisory body and appointed billionaire Viktor Vekselberg, Kaspersky Labs co-founder Natalya Kaspersky and two government officials. President Dmitry Medvedev, who on Sept. 24 said he’ll support Prime Minster Vladimir Putin’s return to the Kremlin in elections in March, is chairing a meeting of the commission today in the Ulyanovsk region on the Volga River.
Prokhorov said after resigning from Pravoye Delo, or Right Cause, that he wasn’t afraid of suffering the same fate as former Yukos Oil Co. billionaire Mikhail Khodorkovsky, who was convicted of fraud and tax evasion in 2005 and oil embezzlement in December 2010, charges he said were linked to his financing of opposition parties. Yukos’s main assets, now owned by state- run OAO Rosneft, were seized and auctioned off by the government to settle more than $30 billion of tax claims.
“I already know that they will try to create problems for me,” Prokhorov said in a blog titled “Game Over” that he posted Sept. 16. “They will crush us in a tough and uncompromising way. I am ready for this.” The investor’s fortune, which Forbes magazine puts at $18 billion, includes the New Jersey Nets basketball team in the U.S. and more than 36 percent of OAO Polyus Gold, Russia’s largest maker of the metal.
Such public criticism of the Kremlin could result in Prokhorov encountering “problems” with his businesses, though it’s unlikely he’ll lose everything as Khodorkovsky did unless he takes an even tougher anti-government stance, said Lilit Gevorgyan, a Russia analyst at IHS Global Insight.
“Clashes with the state never end in a victory for an oligarch, no matter how powerful they are,” Gevorgyan said by e-mail.
Masked law enforcement officers raided the headquarters of a Moscow-based lender partly owned by Prokhorov, MFK Bank, on Sept. 8, without saying what they were looking for, said Maxim Chizhov, a spokesman for Pravoye Delo, which has offices in the building, at the time.
Three years ago, during a trip to the Russian Far East, Medvedev threatened to strip Polyus of its license to develop Natalka, the world’s third-largest gold deposit, after its Chief Executive Officer Evgeny Ivanov complained of a lack of infrastructure in the region.
“If there are so many difficulties, if it’s so hard for you to work, then give up the project, let us take away the license from you,” Medvedev told Ivanov at a meeting then. “Otherwise work, we do not need whining.” Prokhorov was chairman of Moscow Polyus at the time.
Polyus, which still holds the license to Natalka, declined to comment on Prokhorov’s feud with Surkov. Polyus shares fell 0.4 percent to 1,850.40 rubles at 3:15 p.m. in Moscow, valuing the company at about $10.8 billion. That compares with a 3.4 percent gain, to 1,371.60, in the Micex Index of 30 stocks.
Surkov declined to discuss Prokhorov at a forum in Moscow yesterday that was organized by the dominant United Russia party. The Kremlin declined to comment beyond yesterday’s statement, as did Prokhorov’s press service.
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