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Inflation showing up everywhere -- except in the gold price
By John Helmer
Business Day, South Africa
Friday, April 30, 2004
http://www.bday.co.za/bday/content/direct/1,3523,1605241-6078-
0,00.html
MOSCOW -- Russia's stock market suffered heavy losses
amid rumours that billionaire metals magnate Vladimir
Potanin, controlling shareholder of Norilsk Nickel and the
new part-owner of Gold Fields, had been hauled in for
questioning or even arrested.
At the centre of the drama was Potanin's role in the
purchase by Norilsk last month of a 20 percent stake in
South Africa's Gold Fields. To finance the deal, he borrowed
$800 million from Citibank in apparent contravention of
Russian central bank regulations and spent $316 million in
Norilsk Nickel cash.
Shortly after Norilsk's purchase of Anglo American's 20
percent stake in Gold Fields, rumours surfaced that the
Russian central bank might intervene.
Doubts were cast on the deal after disclosures from Citibank,
financier to the deal, that flatly contradicted claims by
Norilsk Nickel executives in Moscow.
The deal, in which Norilsk Nickel is paying $1.16 billion to
AngloAmerican for the shareholding in Gold Fields, had not
been submitted to the Central Bank of Russia, which must
approve capital transactions of Russian companies offshore.
The now-confirmed official Russian probe of the Norilsk-Gold
Fields deal is viewed by analysts in Russia as part of President
Vladimir Putin's drive to roll back the power of the "oligarchs"
tycoons, who have amassed spectacular wealth on the back
of the post-Soviet privatisation drive.
Potanin, who is Russia's fourth richest man with an estimated
fortune of $4.9 billion, controls the world's largest nickel and
palladium producer, Norilsk Nickel. He also has a vast media
and energy empire.
A spokesman for the Interros holding group that owns Norilsk
said that contrary to a rumour that had swept Moscow, Potanin
had not been arrested, and that he was on "a planned business
trip." However, Interros was unable or unwilling to say where
exactly Potanin was, inside Russia or abroad; and when he was
expected to return.
Russia's general prosecutor's office declined to confirm or deny
whether an arrest warrant had been issued for Potanin.
But Ekho Moskvy, a credible news radio station in Moscow that
has always been close to the oligarchs, was reporting yesterday
evening that Potanin had been summoned for questioning by
prosecutors, and had left the country immediately afterward.
The Norilsk Nickel share price has been dropping sharply in the
Moscow market in part because of "growing rumours of an
imminent review of the metal giant's privatisation valuation,"
according to one analyst. There were no further details.
Speculation about Potanin's arrest sent shares in Interros
plunging 7 percent yesterday, dragging down the Moscow
stock market in its wake. The benchmark RTS index closed
down 5.14 percent.
Following the conclusion of the Gold Fields deal, Potanin's
deal maker, Leonid Rozhetskin, said in London last week that
Norilsk Nickel intended to buy more Gold Fields shares.
It has since become clear in Moscow that Potanin intends a
combination of a takeover of Gold Fields and a cash out of
Norilsk.
If he succeeds, Potanin would have achieved a bigger transfer
of Russian wealth offshore beyond the reach of the Russian
prosecutor, courts, tax authority, or the Kremlin than Mikhail
Khodorkovsky, Roman Abramovich, Boris Berezovsky,
Vladimir Gusinsky, or any other Russian oligarch has been
able to do so far.
Khodorkovsky was arrested last October; Berezovsky and
Gusinsky are subject to arrest and are in exile in the United
Kingdom and Israel.
Any such high-profile arrest of a Russian tycoon would deal
a blow to investor confidence in Russia after the detention
last October on fraud and embezzlement charges of
Khodorkovsky, whose prosecution is widely believed to be
a Kremlin crackdown on his political ambitions. Khodorkovsky,
the main shareholder in Yukos oil giant and Russia's richest
man, had been financing opposition parties prior to his arrest.
Potanin, like Khodorkovsky, was one of seven business barons
who took part in the infamous "loans for shares" scheme in
1995 that provided them with vast chunks of key Russian
industries at knock-down prices.
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Ted Butler silver commentary
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----------------------------------------------------
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----------------------------------------------------
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