Nets ownership deal may be in trouble
A New Jersey congressman plans to demand a government inquiry into Mikhail Prokhorov, the Russian billionaire poised to buy the New Jersey Nets basketball team, for his extensive business dealings in Zimbabwe — a bombshell that could blow up the $200 million team deal, the New York Post reported Sunday.
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 notorious leader 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. It’s being financed partly by the taxpayer, and the public has a right to know.”
Prokhorov’s Renaissance Capital investment bank has interests in the Zimbabwean stock exchange, banks, a cell phone 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 U.S. sanctions at the Economic Policy Institute. "It looks like this company is setting up administrative layers that are obfuscating the effects of the sanctions. It’s done all the time.”
Prokhorov, 44, would become the first non-North American owner of an NBA team. The Russian is worth is more than $13 billion. The 6-foot-8 bachelor is a former amateur basketball player who leads a lavish lifestyle.