The Malaysian Reserve

Russia’s richest lose RM12.7b on tax plan

MOSCOW • Russia’s super-rich tycoons lost more than US$3 billion (RM12.29 billion) in one day after a top economic aide to the president proposed raising taxes on the nation’s giant metal and mining firms.

In a letter to Vladimir Putin, aide Andrey Belousov named 14 companies that could pay more. The resulting investor exodus saw US$3.1 billion wiped off the fortunes of their affluent bosses, according to the Bloomberg Billionaires Index.

The companies that would be affected by the plan include MMC Norilsk Nickel PJSC, co-owned by tycoon Vladimir Potanin; Severstal PJSC, where magnate Alexey Mordashov is the largest shareholder; and petrochemical group Sibur Holding PJSC, controlled by Leonid Mikhelson and Gennady Timchenko.

The proposal could raise as much as 500 billion rubles (RM30.74 billion) a year to help fund Putin’s spending plans, according to Belousov’s letter, obtained by Bloomberg News. It would also affect chemical and fertiliser producers.

The proposition “looks like a promotion of inefficiency”, Vladimir Lisin, the controlling shareholder of Novolipetsk Steel PJSC and head of the Russian Steel Association, said in emailed comments. “The lower the profitability, the less taxes you will have to pay.”

Lisin lost the most among the affected billionaires as Novolipetsk Steel slumped 5.4% in Moscow trading last Friday. His US$832 million loss equates to about 4% of his net worth, according to the billionaires index. Viktor Rashnikov, owner of Magnitogorsk Iron and Steel Works PJSC, was the second-biggest loser as his company dropped 5.2%.

It’s not the first wealth decline which Russia’s richest people passed through last week. Last Wednesday, the US announced new sanctions on Russia over nerve-agent attack on former double agent Sergei Skripal and his daughter in the UK that caused ruble and stocks slump. — Bloomberg