October 25, 2011 / 12:40 PM / 6 years ago

UPDATE 2-Polyus London listing delayed by Russian government

* Gold miner co-owned by M. Prokhorov postpones listing plans

* Says has not received approval from Russian government

* Commission in charge of decision chaired by Putin

* Analysts speculate political motive behind the decision

By John Bowker and Megan Davies

MOSCOW, Oct 25 (Reuters) - Gold miner Polyus Gold , part controlled by tycoon Mikhail Prokhorov, said on Tuesday it had failed to win approval from the Russian government for its proposed move to London’s prestigious FTSE 100 index.

Polyus, controlled by Prokhorov and potash magnate Suleiman Kerimov, said in a statement the government commission that evaluates potential foreign investment in Russia had delayed a decision on whether to approve the plans.

Prokhorov, who once set his sights on becoming Russia’s next prime minister, suddenly left politics in September, accusing the Kremlin’s chief political strategist of sabotaging his political party.

Analysts said the decision to hold back Polyus’ hopes of gaining a full listing on the London Stock Exchange could be linked to politics after such public criticism of political strategist Vladislav Surkov.

“Some investors will wonder if the ”delay“ is a reaction to Mikhail Prokhorov’s quick entrance and exit earlier this year on the Russian political landscape,” said Robert Mantse, a mining analyst at Otkritie bank in Moscow.

“It’s very hard to know exactly what is going on behind the scenes but there may be a political angle. The company had thought it had dotted all the ‘i’s and crossed all the ‘t‘s,” he added.

Prokhorov, 46, Russia’s third richest man with an $18 billion fortune, started his business career selling jeans before making a fortune in nickel -- some of which he spent buying the New Jersey Nets basketball team.

The commission for foreign investment is chaired by Prime Minister Vladimir Putin, who is expected to return as Russia’s president following elections in March.


Polyus’s setback is unlikely to endear the company to UK institutional investors already wary of the political risks surrounding Russian companies.

Polyus is one of three Russian miners seeking the premium London listing in an attempt to increase its liquidity, attract foreign investment and improve its access to capital.

Gold and silver miner Polymetal , which also wants to raise around $500 million, and Roman Abramovich’s steel maker Evraz are the other two.

Valentina Bogomolova, an analyst at Uralsib, said the reason behind the delay could be one of many issues.

“It could be political... it could be because so many companies are looking to list (in the FTSE 100) at the same time, or it could be because of technical issues,” Bogomolova said.

Polyus said it would go ahead with an extraordinary general meeting (EGM) this Friday to approve the plans, which involve setting up a UK-based holding company that would then list in London.

If approved by shareholders, the scheme would remain conditional on consent from the Russian government.

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