The government approved on Thursday the sell-off of an estimated $29 billion in state assets over three years in what promises to be the country’s biggest privatization since the controversial loans-for-shares auctions in the mid-1990s. But investors beware. Russia’s legal system, including its protection of property, remains weak, as illustrated by a case unfolding at our company, . It involves the nonpayment of hundreds of millions of dollars by an entity controlled by a member of the Federation Council.
Prosperity Capital Management, or , has endured blatant legal abuses in its dealings with — one of the generation companies spun off during the wholesale privatization and restructuring of the country’s power sector after Unified Energy System was broken up in July 2008. The abuses are among the worst since the Yukos affair.
Read Full Article »