Shares in Russia's Sistema plunge with billionaire chairman under house arrest

Wed Sep 17, 2014 10:36am EDT
 
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By Alexander Winning

MOSCOW (Reuters) - Shares in sprawling Russian holding company Sistema plummeted over 30 percent on Wednesday after its billionaire chairman was placed under house arrest, wiping more than $2 billion in value off the company.

Russian investigators accused Sistema's Vladimir Yevtushenkov of money laundering late on Tuesday in connection with his company's acquisition of up-and-coming oil producer Bashneft.

The charges against Yevtushenkov, one of Russia's richest men, raised fears of a return to the bad old days of asset grabs by the Russian state and drew comparisons to the fate of former oil tycoon Mikhail Khodorkovsky who was jailed for a decade.

It comes at a time when investor confidence in Russia has been damaged by Western financial sanctions imposed over the conflict in Ukraine.

Sistema, which also controls Russia's biggest mobile phone operator MTS, says it considers the accusations against its chairman baseless.

By 1040 GMT (6.40 a.m. EDT), Sistema's Moscow-listed shares were down 32 percent, slashing the company's market capitalization by some 100 billion rubles ($2.6 billion). In London Sistema's global depositary receipts fell 34 percent.

The incident dampened the wider mood for Russian shares somewhat. The rouble-denominated MICEX index was about 2 percent lower than Tuesday's close, with big companies Gazprom and Rosneft off about 1 percent and Sberbank flat.

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The logo of Sistema JSFC is seen on its headquarters building in Moscow, September 17, 2014.     REUTERS/Maxim Shemetov