The managers of the highly performing Blue Planet International Financials investment trust have strongly criticised corporate governance in Russia after a run-in with Rosneft.
The fund held preference shares in TNK-BP Holdings, which Rosneft offered to buy for RUB55 (96p) each. Blue Planet managers David Mallia and Kenneth Christopher Murray claimed that such a price ‘seriously undervalues’ the shares.
‘However, given the lack of investor protection that exists in Russia we were left with no option but to accept Rosneft’s offer,’ they stated.
‘This is yet another example of minority shareholder abuse in Russia. The treatment of TNK-BP minority shareholders by Rosneft has done extraordinary damage to Russia’s and Rosneft’s reputation within the investor community and must surely be the final nail in the coffin so far as foreign investment in the country is concerned.’
Despite the setback Blue Planet International Financials has been a star performer over the past year, topping its AIC Global Equity Income sector with a share-price return of 38.5% and a net asset value appreciation of 22.5%.