A Little Novatek Between Friends
Businessweek talks to two investors today about the risks of investing in Russia stocks, with one of them suggesting that, despite the benefits that may be had, corporate governance issues make the investments too risky. He focuses in particular on the recent string of Novatek share sales.
Investors have little confidence in the company’s management, Colliander says, because officials at Russia’s Energy Ministry use the company “for their own purposes.” Gazprom sold a 9.4 percent stake in Novatek, Russia’s second-largest gas producer, for $1 billion less than its market price last month. “Why in hell would you do that?”
Well, Yulia Latynina was wondering just the same thing in her column earlier this week. She writes that, not only were Novatek’s shares initially sold at a low price, but that the ensuing deals under which the same shares traded hands are indicative of careful and ‘murky‘ planning between powerful friends.