Abramovich Arrest?

Abramovich Arrest?

(RIA Novosti) – Shares in Russian metals giant Norilsk Nickel and steel maker Evraz plunged to a four-month low in Monday afternoon trading in Moscow and London on rumors that tycoon Roman Abramovich had been detained in the United States by the Federal Bureau of Investigation (FBI).

Norilsk Nickel shares fell by 2.3 percent to 5,045 rubles ($163) on the Moscow Exchange by 5:45 p.m. local time, close to the four-month low of 5,000 rubles in early December last year.

Shares in Evraz, which is part-owned by Abramovich, plunged by 4.7 percent on the London Stock Exchange (LSE) as of 1:38 GMT.

Rumors of the arrest were swiftly scotched by Abramovich’s spokesman.

“It’s not true,” spokesman John Mann told RIA Novosti.

An FBI spokeswoman in Washington confirmed by telephone that Abramovich had not been either arrested or detained, though she would not say whether he had been questioned.

Following denial of the arrest, Norilsk Nickel bounced back slightly, closing 2.02 percent lower at 5,055 rubles on the Moscow Exchange, which ended the trading day 0.89 percent down from Friday’s close. Evraz shares were trading 3.10 percent lower on the LSE as of 4:29 GMT.

Rumors of the arrest were originally reported by Russia's RBK TV about an hour before the Moscow Exchange closed.

While speculators may have made immediate gains from the fall in value of Norilsk and Evraz shares, the rumors of Abramovich’s arrest could have more long-term repercussions.

Traders believe the clamor could upset a reconciliatory deal between core Norilsk Nickel shareholders, RusAl and Interros, in which Abramovich has acted as a principal guarantor.

The deal, which is expected to be completed by late April, might have fallen apart had Abramovich been arrested in the US.

Abramovich has agreed to buy a minority stake in Norilsk Nickel through his Millhouse Capital investment vehicle in a cash-for-stock deal to help RusAl owner Oleg Deripaska and Vladimir Potanin, who controls the Interros holding company, end their long-standing shareholder feud and restore the balance of influence in the company.