Medvedev Asked to Intervene in 2 Utilities

Prosperity Capital Management, a fund with $3 billion in Russian shares, on Friday asked President Dmitry Medvedev to help minority investors in two utilities, saying controlling shareholders may back out of making a mandatory buyout offer.

Billionaire Mikhail Prokhorov, who controls TGK-4, and Leonid Lebedev's miner Sintez Group, which controls TGK-2, "are trying to avoid fulfilling their obligations by manipulating facts and using legal loopholes," the fund said in an open letter to Medvedev. "We ask you to take urgent measures to protect the foundations of the Russian stock market and its judicial system."

Prokhorov's Onexim Holdings ended an offer to buy the shares it does not already own in Tula-based TGK-4 on Oct. 13, saying the utility had been added to a list of "natural monopolies" by the Federal Tariffs Service. Prosperity Capital has a 20 percent stake in TGK-4.

"All actions of Onexim Holdings Ltd. fully comply with Russian laws," Onexim Holdings said in a statement.

Sintez spokesman Alexander Levin declined to comment.

TGK-4 is one of 19 generators sold by the state in the past two years to investors that include Gazprom and Enel. Onexim made its buyout offer July 30, valid for 80 days. The holding company held 48.4 percent of TGK-4 at the time.

Sintez bid with RWE, Germany's second-largest utility, for a stake in TGK-2 in March. RWE said Sept. 19 that it would not buy an interest in the generator because the price was too high.