Gazprom scare for foreign investors
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Gazprom scare for foreign investors

Gazprom pipeline: for years foreign
investors have got around
restrictions on owning shares in the
Russian gas company through grey
trading schemes. News of a
crackdown hit its share price

Foreign investment sentiment was already being battered by the Yukos affair, the Kremlin's attack on what was Russia's biggest oil company. However, waning confidence was dealt a fresh blow in August when a Duma deputy officially called for an investigation into ?grey? schemes used by foreigners to hold billions of dollars-worth of Gazprom shares.

On August 17 the legislator, Yuri Savelyev from the Rodina (Motherland) party, sent a letter to head of the federal security service (FSB) Nikolay Patrushev, interior minister Rashid Nurgaliyev and prosecutor-general Vladimir Ustinov. It accused Russian investment bank United Financial Group (UFG) of running, ?a scheme under which anonymous foreign companies and individuals can own shares in Gazprom, bypassing a 1997 presidential decree that bans the ownership of Gazprom shares by foreign companies and individuals or Russian companies with more than 50% foreign capital?.

Gazprom's share price immediately plunged 12.5%, wiping more than $6 billion off the company's market capitalization in a day as investors ran for cover, fearing that the Kremlin was about to launch a crackdown on the schemes and confiscate their money.

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