Mugabe, the Russian billionaire and basketball

By Lance Guma
12 April 2010

A Russian billionaire’s attempt to buy US basketball team the New Jersey Nets is now on the line, following demands for a government inquiry into his possible business links with the Mugabe regime. New Jersey lawmaker Bill Pascrell Jr is leading the campaign to have Mikhail Prokhorov and his companies investigated, for violating US targeted sanctions that forbid American citizens and companies from doing business with those in Mugabe’s inner circle.

The story has received huge headlines in the US given that Prokhorov, worth an estimated US$17 billion, was willing to plough in US$200 million to help the struggling basketball team. But Pascrell Jr wants Treasury Secretary Timothy Geithner to investigate Prokhorov's association with Mugabe’s oppressive regime, specifically the February business summit his company organized in Zimbabwe, in violation of United States targeted sanctions.

The Renaissance Capital investment bank owned by Prokhorov has interests in the Zimbabwean stock exchange, via holdings in banks, a cell phone company, mining and a private game reserve. This same company is connected with Onexim, the investment fund that is behind the deal to buy the New Jersey Nets. Pascrell Jr said; ‘This is disgusting. Obviously, the Board of Governors of the NBA (National Basketball Association) didn’t do their job properly when they vetted this deal. It’s being financed partly by the taxpayer, and the public has a right to know.’

In June 2009 Renaissance Capital sponsored an economic forum in Harare in which they organized special access to government ministers. In February this year it’s CEO for Africa, Andrew Lowe, is reported to have taken part in a business panel with a ZANU PF official, banned from entering the US. Usha Haley, an expert on U.S. sanctions at the Economic Policy Institute, told the New York Post; ‘Looks like sanctions-busting to me. It looks like this company is setting up administrative layers that are obfuscating (obscuring) the effects of the sanctions. It’s done all the time.’

Exiled investment banker, Gilbert Muponda, is familiar with Renaissance Capital’s involvement in Zimbabwe and told Newsreel; ‘They specialize in emerging markets that have a high return, but high risks, and they are experts at quantifying and spreading risk.’ He told us although the company did what any investment bank would do (i.e. seek opportunities) this was in violation of US targeted sanctions and the lawmakers in that country had a good case to charge them.