Petropavlovsk Founder Arrested on Embezzlement Charges

Pavel Maslovskiy, co-founder and former chief executive officer of gold-miner Petropavlovsk Plc, was put under arrest by a Moscow court for two months on embezzlement charges.

Maslovskiy will be held through Feb. 23, Interfax reported, citing Olga Bondareva, spokeswoman for Moscow’s Tverskoy court. She didn’t immediately respond to a request for comment from Bloomberg after the court decision. The decision is expected to be appealed, the news service said.

Maslovskiy is suspected of misappropriating about 95 million rubles ($1.3 million) from the company’s Pokrovsky mine in 2018, Interfax reported. He says he’s not guilty, according to the state-run Tass news service. Petropavlovsk’s press service didn’t immediately respond to calls for comment during the holiday in the U.K.

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 on a visit to London looking 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, with shareholder battles erupting over the past three years.

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, ending Hambro’s brief return as interim chairman.

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