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By John Helmer in Moscow

“Never apologize and never explain. It’s a sign of weakness”. That line comes from a 1949 film called “She Wore a Yellow Ribbon”. In that one, John Wayne played a cavalry commander on the verge of retirement who tries to beat his Cheyenne foes one more time. He fails at that, but ends up doing the right thing by the girl (white girl).

In the political history of Vladimir Putin, he follows the script, beats the redskins every time, doesn’t age, doesn’t have to retire. So why did the prime minister make the unprecedented concession yesterday that there has been a miscalculation over the takeover of Novorossiysk Commercial Seaport Company (NCMP)? Why claim the deal, first disclosed on September 15, is back to front when there isn’t a trader of NCMP shares in the market places who believes it?

Putin’s full statement does not appear on the official website of the prime ministry. Instead, there is a one-line quote from a much longer presentation at a Moscow investment conference called “Russia Calling!” The full answer by the prime minister to a question about the port deal appears instead in reports by Russian news agencies and a daily business newspaper. The timing suggests that Putin is trying to stem sharemarket losses, as the port’s share price continues to plummet and the market capitalization is down 15% over the past month.

The question for the prime minister came from someone who called himself “a portfolio manager and I also want to attract investors. My bonuses depend on whether I do.” He went on: “When Transneft, with major state participation, comes, shares plummet. We have no idea what the state wants. This is bad. How can you change this opinion and what can be done for minority holders to feel safe and be sure that the state will not come and take their stock?”

Conceding he had discussed the deal in advance of the announcement two weeks ago, Putin said the proposed takeover by state-owned Transneft, the pipeline company, and a syndicate of related investors in a group called Summa Capital was “not nationalization.”

Putin also claimed the initiative did not come from these buyers, but from the port company sellers. According to the prime minister, he had even tried to talk the NCSP stakeholders, Alexander Ponomarenko, Alexander Skorobogatko, and Arkady Rotenberg (image below), out of selling. “I had to persuade them not to do it, but they have a desire to place their capital in other industries.”

Referring to widespread speculation they are being forced out, Putin claimed the deal “is not aggression on the part of the state. No one is squeezing.”

He also claimed that with Transneft in charge of Novorossiysk port, the cargo volumes of the port will grow with fresh investment by the state into railway and other cargo handling capacity. Putin said the share price of NCSP will rise — “ït is a medical fact…Investors should be happy that Transneft is coming.”

By the end of the day’s trading in Moscow and London, the share price was down another 1.4%. Since September 14, the port company has lost $630 million of value.

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