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September 27, 2009
Questions still remain about prospective NJ Nets owner Mikhail Prokhorov
The Star-Ledger
By Dave D'Alessandro
This rather in-depth look at Mikhail Prokhorov's background gives reasons why those who are overjoyed at the oligarch's offer for the Nets should not yet see transfer of Nets ownership as a done deal.
But there are incidents and business practices in Prokhorov’s past that need to be examined, because while the 6-7 Russian tycoon may be astute when it comes to basketball, nobody knows how he is at hurdling, or sprinting, against the clock.
The hurdles here, after all, aren’t like the ones he has vaulted so easily back home, where a favorable relationship with a repressive government can bury your competitors and make you a billionaire before you’re 32.
“The question arises, at least from here in Moscow: Does the NBA commissioner think it’s his duty to do what it considered due diligence?” asked John Helmer, a former Carter Administration official who has run an acclaimed business news service in Russia since 1989. “And in the United States — particularly in New York State — you have to believe that an oligarch is open to investigation.”
The investigation will be conducted by NBA commissioner David Stern’s own legal team, but given the league’s desperate need for investors with deep pockets who can also expand their fan base into new markets, cynics would suggest that Prokhorov will get the feather-duster treatment.
The government, meanwhile, will likely conduct an elaborate search through the byzantine maze of Prokhorov’s wealth and power for something that might create doubt about his suitability to own a professional sports team.
Can he hold up under the scrutiny of whatever agency has oversight responsibility? Will the overseers determine that it’s not the size of his bank balance, but where the money comes from, that bears closer inspection? Would an examination from the Treasury Department — and its Committee On Foreign Investment In The United States — turn up how much is actually in Prokhorov’s portfolio, and if he is borrowing for the Nets deal, what the Russian is offering for security?
And can Prokhorov overcome these hurdles and generate additional funding for Barclays Center by Dec. 31, which is the day Bruce Ratner’s Brooklyn dream turns into a pumpkin if the two partners cannot secure the financing for the $800 million arena?
Posted by steve at September 27, 2009 11:12 AM