GAZPROM has come under attack from one of its most prominent shareholders, who has accused the Russian statecontrolled gas monopoly of squandering billions of dollars of shareholder money.

William Browder, the Moscow-based fund manager, accused Gazprom of destroying shareholder value through chaotic financial controls and the increased use of secretive intermediaries, whose relationships with the company remain unknown.

Mr Browder’s criticism comes after Gazprom’s net profit for the nine months to September last year, the latest available figure, fell 1.5 per cent to $4 billion (£2.2 billion) and operating cashflow for the same period dropped 46 per cent to $2 billion. The decline came amid soaring global oil and gas prices.

Gazprom’s shares, when valued according to its level of reserves, trade at a 96 per cent discount to BP, and at less than half the value of Lukoil, another Russian company.

Mr Browder, chief executive of Hermitage Capital Management and one of the most outspoken foreign investors in Russia, has compiled a dossier listing allegations of poor performance, ranging from asset stripping to money siphoned off to unknown parties.

He points to the cost of the Blue Stream gas pipeline project linking Russia and Turkey via the Black Sea, and the fact that Gazprom paid $2.95 million a kilometre of pipeline compared with Turkey’s $1.35 million. The Turkish costs, despite being less than half of Gazprom’s, caused indignation in Turkey where inquiries resulted in criminal convictions.

Mr Browder has also taken issue with Trubni Torgovi Dom, a shelf company set up with $350 of capital two years ago and which bought $700 million worth of pipes for Gazprom last year. Trubni Torgovi’s only known shareholder is Elena Russkaya, whose surname translates as “Russia”.

Mr Browder’s attack, only three weeks before Gazprom’s annual meeting and after the Yukos scandal, is likely to embarrass President Putin. The Government has already scrapped plans to merge the state-owned Rosneft oil company, which acquired Yukos’s biggest asset, with Gazprom. Instead, the Kremlin wants to keep Rosneft separate and invest $7 billion to raise its stake in Gazprom from about 38 per cent to just over 50 per cent.

Gazprom could not be reached for comment.

Hermitage, which has $1.7 billion of mostly Western funds invested in Russian companies, will not reveal the size of its Gazprom stake. Gazprom is worth $66.7 billion.

Analysts have put its holding at about 1 per cent, but point out that Hermitage has attracted support from just under 7 per cent of Gazprom’s shareholders in the past.

John Bates, a credit analyst at WestLB, said that it was almost impossible to judge Gazprom’s operational efficiency, but said that the company’s cashflow-to-interest cover was a solid 16 times. He said: “From my point of view, financially, Gazprom is not too bad but at the same time there’s a strong propensity for a lot of cash to disappear from the balance sheet and it is impossible to see exactly where it is going.”

LOST PROMISE

Gazprom fails to capitalise on a strong market:

Operating costs up 28% to $17.2bn

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax