Russian Prosecutors Seek to Detain Petropavlovsk Founder

Russian prosecutors are seeking to arrest Pavel Maslovskiy, a founder and former chief executive officer of gold-miner Petropavlovsk Plc, for two months on embezzlement charges.

“Prosecutors sent the request for arrest and it will be heard later today,” Olga Bondareva, spokeswoman for Moscow’s Tverskoy court said Friday by phone.

Maslovskiy is suspected of embezzling 90 million rubles ($1.2 million) from the company’s Pokrovsky mine, the Interfax news service reported Thursday, citing a statement from the mine. He says he’s not guilty, according to the state-run Tass news service.

Petropavlovsk was founded in 1994 by Maslovskiy and Peter Hambro. Maslovskiy, a former professor at the Moscow Aircraft Technology Institute, met the British banking scion during a visit to London to look for investors to develop a gold deposit near the Chinese border.

The miner was worth $3 billion a decade ago, but sinking gold prices and management missteps reduced it to a penny stock. After a debt-for-equity swap, a significant stake passed through the hands of billionaires from Russia and Kazakhstan, leading to shareholder battles.

Maslovskiy and Hambro’s team was forced out in 2017 by Viktor Vekselberg. The Russian billionaire sold his stake a year later to Kazakh tycoon Kenes Rakishev, who brought some of the team back.

Maslovskiy was most recently ousted in June when investors led by Russian businessman Konstantin Strukov’s privately held gold miner, Uzhuralzoloto Group of Companies, voted against the re-election of seven board members as the stock was benefitting from record-high gold prices, returning to its 2013 level. In August, the group blocked an attempt to reappoint Maslovskiy and the others, and ousted Hambro who was serving as the interim chairman.

Petropavlovsk’s press service didn’t immediately respond to calls for comment due to the Christmas holiday in the U.K.

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