That’s the question raised by the New York Times’ Richard Sandomir yesterday, noting the vetting process for Mikhail D. Prokhorov’s purchase of the New Jersey Nets has progressed rather quickly, with the NBA refusing to who actually investigated Prokhorov’s business history. “we™re dealing with a Russian billionaire with global business interests that are not as transparent as prospective owners with extensive public holdings,” admits Sandomir, who at the very least tackles the same thorny issued previously raised by Congressman Bill Pascrell Jr.(D-Passiac), to wit, a prospective NBA owner doing business with a repressive regime that’s currently under U.S. sanctions for human rights violations.
Onexim Group, the company through which Prokhorov (above) is buying the Nets, last year bought nearly 50 percent of an investment bank called Renaissance Capital, a division of Renaissance Group.
Quinn Martin, a spokesman for RenCap, as it is called, said it owned no Zimbabwean companies and that its only presence in the country was in stock research. Attempts to independently verify Martin™s claims were unsuccessful.
He pointed to the sister company Renaissance Partners as the division of the group that he said was active in Zimbabwe. It owns a substantial part of the Commercial Bank of Zimbabwe, which until 2003 was run by Gideon Gono, now the nation™s central banker. (Various reports at the time of the purchase of shares point to RenCap, not Renaissance Partners, as the purchaser.)
Gono, who is known as Mugabe™s banker, is himself on the sanctions list. Some Zimbabwean banks are on it. But the Commercial Bank of Zimbabwe is not on the list. Robert Reid, managing director of Renaissance Partners, said in a statement that his company œhas had no dealing with individuals or companies on the sanctions list.
Pascrell chooses not to draw distinctions between the different parts of Renaissance Group, believing they are intertwined and thereby complicit in possibly flouting sanctions in Zimbabwe. Last week, he said in a telephone interview: œProkhorov owns 50 percent of Renaissance, it™s actively invested in Zimbabwe, and it™s got a stake in CBZ, which is a chief prop for Mugabe.
He also said that Stern had not taken any of this seriously enough.
œHe jokes this off, Pascrell said. œThis is a big joke to him.
1 thought on “Is David Stern Unbothered By Nets’ Suitor’s Mugabe Ties?”
Here’s the issue with all this: the original Pascrell accusation was the RenCap helped run a conference in Harare last June. Problem is that Onexim didn’t buy its 50% less one share interest in RenCap until June 5.
As for all the other accusations, they relate to actions RenCap took in the YEARS prior to the Onexim acquistion and none of them appear to be with anyone on the list of Specially Designated Nationals, those individuals who have been sanctioned by the United States. That includes Gono, who is not an SDN. RenCap tried to carve out a sub-Saharan speciality investment banking business in recent years. Harare is one of several places where they have had offices.
Onexim is in the business of buying distressed assets at distressed prices (see Nets, New Jersey, May 2010). Onexim bought RenCap after the economic collapse drained it of most value and brought to the brink of bankruptcy. Onexim bought larger and larger shares of the more and more debt-ridden RusAl aluminum company, headed by a fellow oligarch who has had business relationships with very unsavory characters. They bought RBC, the big Russian media company and Kolmar coal, etc., etc., all of which needed infusions of cash, of which he has enormous reserves. He has made no secret of it.
No one is suggesting that Prokhorov is chaste, in any of his endeavors, but to blame him for the activities of companies before he bought them is a real red herring. Perhaps he will clean up RenCap, perhaps he won’t. Perhaps he will clean up RusAl, perhaps he won’t. But let’s wait til he has had the chance.