« Local Group Works to Improve Community One Flower at a Time | Main | Sunday Comix: Our illustrator imagines Ratner’s ‘meditation room’ »
April 11, 2010
Tycoon's tyrant ties threaten Nets deal
New York Post
By Isable Vincent and Melissa Klein
A New Jersey congressman says he will demand a government inquiry into Mikhail Prokhorov, the Russian billionaire poised to buy the New Jersey Nets, for his extensive business dealings in Zimbabwe -- a bombshell that could blow up the $200 million team deal and threaten the future of Brooklyn's Atlantic Yards, The Post has learned.
Democratic Rep. Bill Pascrell Jr., a member of the powerful Ways and Means Committee, wants to know if companies controlled by Prokhorov in Zimbabwe violate federal rules that forbid American citizens and companies, and subsidiaries set up in the United States, from doing business with brutal strongman Robert Mugabe, his regime or associates.
"This is disgusting," Pascrell said. "Obviously, the Board of Governors of the NBA didn't do their job properly when they vetted this deal."
He said the project received tax-exempt bonds.
"It's being financed partly by the taxpayer, and the public has a right to know," he said.
Prokhorov's Renaissance Capital investment bank has interests in the Zimbabwean stock exchange, banks, a cellphone company, mining and a swanky, private big-game reserve. The company is intertwined with Onexim, the $25 billion Prokhorov-controlled investment fund behind the deal to bring the struggling NBA team to Brooklyn.
Pascrell said he will ask the Treasury Department, which oversees the sanctions, to investigate Onexim. In 2008, Onexim became a 50 percent owner of Renaissance Capital, which has been actively investing in Zimbabwe since 2007.
According to its Web site, Renaissance Capital has offices in Manhattan and was the financial sponsor of an economic forum in the Zimbabwean capital of Harare that provided foreign investors special access to government ministers in June 2009 -- which experts say is a violation of the sanctions.
In February, the company's Africa-based CEO, Andrew Lowe, participated in a business panel with a Zimbabwean official banned from entering the United States.
"Looks like sanctions-busting to me," said Usha Haley, an expert on US sanctions at the Economic Policy Institute.
...
If the department steps in to block the Net deal, it could cause major problems for developer Bruce Ratner's Atlantic Yards development project.
...
NBA Commissioner David Stern recently told "60 Minutes" that Prokhorov passed a background check and "nobody has come up with any reason why he shouldn't be an NBA owner."
"Mr. Prokhorov went through a very extensive and stringent vetting process," a league spokesman told The Post yesterday. "The background and financial investigations have been completed, and there was nothing that was disclosed that would cause us not to move forward with his application for Nets ownership."
But a spokesman for Renaissance Capital in Moscow told The Post that the question of Prokhorov's dealings in Zimbabwe did not come up during the NBA security checks.
Additional coverage...
Atlantic Yards Report, Prokhorov's business dealings in pariah Zimbabwe provoke requested federal investigation that could throw a wrench into pending Nets deal
It's not over 'til it's over, apparently.
The formal transfer of the New Jersey Nets to a new majority owner, Russian billionaire Mikhail Prokhorov, has been delayed from the previously-announced mid-April date because the state does not have "vacant possession" of the part of the Atlantic Yards site needed for the initial phase.
But there's a much bigger potential wrench into the deal. A New Jersey Congressman's request for an investigation of Prokhorov's business dealings in international pariah Zimbabwe, according to a New York Post exclusive, "could blow up the $200 million team deal."
That's hardly clear; we must see what the Treasury Department, which oversees sanctions regarding Zimbabwe, has to say.
Rep. Bill Pascrell has previously asked the National Basketball Association (NBA) to investigate Prokhorov's fitness to buy the Nets, but the NBA found nothing amiss. Of course, the NBA has reason to welcome a deep-pocketed owner who can help internationalize the game.
Posted by steve at April 11, 2010 7:53 AM