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Today in Russian Business – Oct 12, 2010

Hermitage Capital Management’s Bill Browder has responded to Arnold Schwarzenegger’s enthusiasm for Russia’s investor potential: ‘With all due respect, Governor Schwarzenegger has no idea of the risks of investing in Russia […] He won’t be there to wipe the blood off the floors.‘  Prosperity Capital Management writes in the Moscow Times today about one such bloody dispute, involving Kores and TGK-2, and here’s a private equity case study on the ‘nasty, even violent, battle for control of the St Petersburg hypermarket chain Lenta‘.  A member of the US delegation accompanying Schwarzenegger noted that ‘the political risk – or at least the perception of it – is pretty high.‘  Moscow’s government could reallocate ‘billions of dollars a year‘ by selling its company shares, says Finance Minister Alexei Kudrin in the wake of criticism of Moscow’s business affairs and the negative rating given to Bank of Moscow following former Moscow Mayor Yury Luzhkov’s dismissal.  Luzkhov insists that Bank of Moscow will not be affected because it ‘is not engaged in politics‘.  The decision on whether or not to bail out regional governments to avoid defaults is to be made on a ‘case-by-case basis‘.  The Health and Social Development Ministry has posted a tender offering $1.8 million to build a social networking website – with the stipulation that it must be completed within sixteen days.  Of all Sochi’s problems, funding is definitely not one of them.  Procter & Gamble is the latest US firm to come under fire from Russia; in this case over ‘sanitary regulations‘.  Anna Chapman is the new face of FondServisBank, hired ‘to bring innovation to its information technologies‘.