Russian Govt. Investigating ALROSA Non-Core Asset Sales

The Moscow office of diamond miner ALROSA is being investigated by Russia's Federal Security Service (FSB) for sales of non-core assets between 2011 and 2013, reports Reuters.

The state-controlled firm is the world’s largest producer of diamonds in carat terms and together with De Beers, accounts for half the world’s rough diamonds.

During the tenure of then Chief Executive Fyodor Andreev, who held the post between 2009-2014 but died in 2015 after a long-term illness, ALROSA divested several non-core assets between 2011 and 2013.

The sales included a 51 percent stake in the Timir iron ore project to Russian steelmaker Evraz. ALROSA also entered into an agreement with oil major Rosneft to sell its natural gas assets, but the deal was inconclusive as both sides couldn’t agree on a price.

According to Reuters, the Interfax news agency cited a source as saying law enforcement officials were removing documents from ALROSA’s Moscow office following a request from investigators in Russia's far eastern Yakutia region, where its main production assets are based.

The federal government and Yakutia, together with its districts, each hold 33 percent of ALROSA’s shares. The Russian government sold a 10.9 percent stake in ALROSA last year, raising $813 million to cover a budget shortfall. It plans

to cut its stake in ALROSA further to 25 percent plus one share by 2019, but the finance ministry has said no sale is planned in 2017.

https://www.gemkonnect.com/news/russian-govt-investigating-alrosa-non-core-asset-sales