Posted September 28, 2014 1:40 pm by Comments

Bloomberg says that traders are shorting Mobile TeleSystems OJSC (NYSE: MBT) with bearish bets at their highest levels in a year on speculation the Russian phone company’s controlling shareholder, Vladimir Evtushenkov, will tap it for cash to settle money-laundering charges.

Evtushenkov controls MTS, Russia’s biggest wireless carrier, through AFK Sistema which may be asked to pay back billions of dollars in dividends it received from OAO Bashneft, the billionaire’s oil company. According to Bloomberg data, the number of MTS ADRs borrowed for short selling to profit from a retreat was 4.95 million on September 24, after surging to 5.9 million shares over a week, the most since August 2013.

Slava Breusov, an analyst at Alliance Bernstein LP in New York, was quoted by Bloomberg as saying:

“It looks more likely that Sistema may need to raise cash to settle the situation. It would probably be able to raise several billion using MTS shares as a collateral. That increases risks for the shareholders.”

Its worth noting that Evtushenkov is the richest Russian to face criminal charges since Mikhail Khodorkovsky, the Yukos Oil Co. founder who was arrested in 2003 and released last year.

To read the whole article, Russia Billionaire’s Jailing Brings Out MTS Short Sellers, go to the website of Bloomberg. In addition, check out our list of Russia ADRs here.

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