April 2, 2018 / 10:15 AM / a year ago

Shares in assets of Russia's Summa group fall after billionaire owner detained

MOSCOW (Reuters) - Shares in Russian transport companies that are part-owned by Summa Group fell on Monday after its billionaire owner Ziyavudin Magomedov was detained on embezzlement charges.

FILE PHOTO - Ziyavudin Magomedov, the co-owner of Russia's Summa investment and trading group that was involved in construction of a soccer World Cup venue in Kaliningrad, attends a hearing on his detention at the Tverskoy District Court in Moscow, Russia March 31, 2018. REUTERS/Tatyana Makeyeva

Fesco (FESH.MM) was hardest hit, plunging 19.18 percent after Russian authorities arrested Magomedov and his brother on Saturday on charges of embezzling more than $35 million. It was one of the highest-profile prosecutions of a Russian tycoon in years.

Summa Group and U.S. private equity fund TPG own 49.9 percent of Fesco shares.

Summa also owns smaller stakes in Novorossiysk Commercial Sea Port Group (NCSP) (NMTP.MM), which was down around 1 percent, and Russia’s largest freight container operator Transcontainer (TRCN.MM) which dropped 0.61 percent.

They bucked a rise in Russian stock indexes.

Summa Group owns 25 percent of NCSP and is currently involved in a dispute with state-owned oil pipeline operator Transneft over control of Russia’s largest port operator.

Russia’s anti-monopoly regulator has given Transneft the green light to acquire control of NCSP but a final agreement has not been reached yet.

If Transneft does increase its stake in NCSP, “it could be a trigger for the stock and imply the prospect of higher dividends,” analysts at Alfa bank said in a note.

Transcontainer, meanwhile, is 25 percent owned by Fesco and analysts said Magomedov’s detention could give Russian businessman Roman Abramovich, a co-owner of Transcontainer, an opportunity to increase his stake in the company.

Russia's dollar-denominated RTS index .IRTS was up 0.69 percent by 1005 GMT at 1,256 points. The rouble-based MOEX Russian index .IMOEX was 0.90 percent higher at 2,291 points.

The Russian rouble weakened on Monday as many markets around the world were closed for Easter holidays and as investors fretted about geopolitical tensions between Russia and the West.

The rouble was 0.44 percent weaker against the dollar at 57.36 RUBUTSTN=MCX and had lost 0.45 percent to trade at 70.76 versus the euro EURRUBTN=MCX.

Oil prices rose, lifted by a drop in drilling activity in the United States. [O/R]

Brent crude oil LCOc1, a global benchmark for Russia’s main export, was up 0.55 percent at $69.72 a barrel.

Reporting by Polina Nikolskaya; Editing by Susan Fenton

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