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Last Updated: Thursday, 27 April 2006, 12:23 GMT 13:23 UK
LSE warns Russia on investor ban
Hermitage Fund manager William Browder
Mr Browder was deported from Russia last year
The head of the London Stock Exchange (LSE) has attacked Russia's decision to bar a top foreign investor from entering the country, a report says.

Clara Furse warned President Vladimir Putin he risked "significant damage" to Russia's reputation by banning William Browder, the Financial Times said.

The LSE confirmed a letter had been sent, but declined to comment further.

Russia justified the ban by saying it can deny entry to anyone deemed a risk to national security, order or health.

US-born Mr Browder, the son of the one-time leader of US communist party, now runs the Hermitage Fund, Russia's biggest equity fund.

He had been a long-time resident of Moscow until he was deported from the country in November last year.

According to a letter acquired and quoted by the FT, Ms Furse warned that Mr Browder's ban "could have a negative impact on Russia's image as a country that welcomes foreign investment, and on the ability of Russian companies to raise capital outside Russia".

"If the single largest investor in the Russian market can be arbitrarily denied entry into the country, that would send a very negative signal to other parties seeking to invest in Russian companies," she added.

Support campaign

The extraordinary letter from Ms Furse is the latest part of a campaign pushing for Mr Browder's ban to be lifted.

UK foreign secretary Jack Straw and Russian investors groups have also lobbied senior Russian figures about his case.

In a statement the LSE said that it "corresponds with legislators, regulators and other official representatives of the many countries whose companies choose to list on our markets".

"Notwithstanding the publication in today's FT of a letter sent to the Russian Federation, we consider the matter to be a private one on an area of mutual interest," it added.


Mr Browder controls $4bn (3.2bn) in his Hermitage equity investment fund.

Earlier this week he said he had not been given a reason for his ban, but suggested it may be because he had been critical of poor corporate governance within Russian firms.

Mr Browder has had a reputation for being a staunch defendant of Vladimir Putin's Kremlin, and had defended the government's actions in imprisoning former oligarch Mikhail Khodorkovsky.

The news also comes at a time when Russian companies are on the acquisition trail in Europe.

On Tuesday, gas monopoly Gazprom announced it was looking for takeover targets - admitting that British Gas owner Centrica was on its "watch list".

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