Mikhail Prokhorov is a Russian billionaire and owner of the American basketball team, the Brooklyn Nets. After graduating from the Moscow Finance Institute he made his name in the financial sector and went on to become one of Russia's leading industrialists in the precious metals sector. While he was running Norilsk Nickel, the company became the world's largest producer of nickel and palladium. He is the former chairman of Polyus Gold, Russia's largest gold producer, and former President of ONEXIM Group. He resigned both positions when he entered politics in June 2011.
In December 2011, Prokhorov capped a year of higher-profile political activity in Russia with the December declaration that he would run as an independent in the 2012 presidential elections. In June 2012 he declared the establishment of new political party "Party of Civic Platform".
He is the seventh richest man from Russia and the 57th richest man in the world according to the 2012 Forbes listing with a fortune estimated at US$13.2 billion.
In a flash quote Mikhail Prokhorov told ForUm about the business and attitude to Ukraine.
- Mikhail Dmitriyevich, Russia's economy keeps growing, but its dynamics slows down against the background of the general reduction of GDP growth of BRICS countries. What do you think about it?
- The situation seems grotesque. On one hand the figures speak about the growth of economy and industry, but on the other hand the development is slow, even static.
During the latest economic forums in Russia we came to the conclusion that the country needs serious changes, and first of all in the power branch. The monopoly of the central power restrains the economy, puts pressure on enterprises and creates monopoly clots in the economy's blood stream.
Business needs competition, and for this we must 'clean' the official departments. We also need to set solid game rules for investors.
- The majority of your assets are not in the real sector. So, what are your main bets in business?
- I don't mind industrial sector. "Polyus Gold" is a traditional mining asset. I still have stocks in "RusAle". Then, there is a promising company "Inter-geo", which should bring first metal by 2016. Some capital must be secured in productive assets, especially during the crisis. Strong productive industry is a factor of stability. In Germany, for example, 30% of the population is engaged into production, and the country survives the crisis relatively better.
In addition, we must develop servicing business. At the same time we should understand that about 20% of the world population is unfit for servicing business due to physiological factors. These people are ready to work at plants and factories. They have skills in this field and are used to corporative culture. In Russia this percentage is higher. About 40% of our population, including state officials, is not ready to work in servicing.
I also stand for diversification. At least 20% of assets must be available for immediate cash out in order to sustain your business in crisis times. I've had such situations in my practice. Besides, in such moments it is relatively cheap to take in a rival.
- What are your criteria for new projects?
- The main principle is a possiblity to do big business. If a project does not have chances to capitalize at least one billion dollars I am not interested.
- Do you let go your assets easily?
- The law of business states that if your get too close to something it is no longer business but a hobby. Hence, if someone offers you a good price, you should sell without doubts. It's better to have diversified assets to keep the aggregate basket intact. But I have difficulties with firing people. Every time I have to set up my mind before telling a person I don't take him for another project. Everything depends on individual characteristics and skills. A perfect fit for one project may not be the same for another one. Such things are better to be told in person.
- What is Ukraine for you?
- Together we can do better than apart. The level of our current economic relations lags far behind the level of affinity between our people and of potential of mutually beneficial development.
This is the matter of political will, nothing else. As for the European integration, all we have to do is assist. Russia needs allies in Europe. Ukraine is 'our people'. If you get in Europe before us we will be happy, and if we get their first we will give a hand.
- But what about the idea of EuroAsian union, which is being promoted as an alternative to the EU?
- There is no real alternative. For 20 years we have been trying to put together the pieces of the broken Soviet Union and... nothing. After all these years we should know better. Our reunion path goes through All-European mechanisms. Europe is a value choice for both Moscow and Kyiv. It is more solid platform than the nostalgia for USSR.
- To sum up please tell us an interesting episode from your life connected to Ukraine?
- On the occasion of the opening of Kyiv branch of our bank in 1995 we had a party. In the end we all ended up in my hotel room. When the party was over and people started leaving I saw a girl standing alone. I was tired and was going to sleep, so I simply asked 'Who are you?' She said: 'I was invited but then they left. I'll be going now, have to grab a taxi.' Well, word after word we started a conversation. I found out she was a single mom from Kyiv renting an apartment because she did not have enough money to buy her own. And then, just like that, I said: 'Do you believe in fairy tales?' She stared back at me, a little bit freaked. 'No'. Then I took out a pack of banknotes and gave her a half.
The most interesting that after some time my new unexpected friend invited me to her housewarming party and wedding. With her own apartment she was back on the market and a groom did not make her wait long. So, yes, I personally took part in the fortune of one Ukrainian citizen.
In December 2011, Prokhorov capped a year of higher-profile political activity in Russia with the December declaration that he would run as an independent in the 2012 presidential elections. In June 2012 he declared the establishment of new political party "Party of Civic Platform".
He is the seventh richest man from Russia and the 57th richest man in the world according to the 2012 Forbes listing with a fortune estimated at US$13.2 billion.
In a flash quote Mikhail Prokhorov told ForUm about the business and attitude to Ukraine.
- Mikhail Dmitriyevich, Russia's economy keeps growing, but its dynamics slows down against the background of the general reduction of GDP growth of BRICS countries. What do you think about it?
- The situation seems grotesque. On one hand the figures speak about the growth of economy and industry, but on the other hand the development is slow, even static.
During the latest economic forums in Russia we came to the conclusion that the country needs serious changes, and first of all in the power branch. The monopoly of the central power restrains the economy, puts pressure on enterprises and creates monopoly clots in the economy's blood stream.
Business needs competition, and for this we must 'clean' the official departments. We also need to set solid game rules for investors.
- The majority of your assets are not in the real sector. So, what are your main bets in business?
- I don't mind industrial sector. "Polyus Gold" is a traditional mining asset. I still have stocks in "RusAle". Then, there is a promising company "Inter-geo", which should bring first metal by 2016. Some capital must be secured in productive assets, especially during the crisis. Strong productive industry is a factor of stability. In Germany, for example, 30% of the population is engaged into production, and the country survives the crisis relatively better.
In addition, we must develop servicing business. At the same time we should understand that about 20% of the world population is unfit for servicing business due to physiological factors. These people are ready to work at plants and factories. They have skills in this field and are used to corporative culture. In Russia this percentage is higher. About 40% of our population, including state officials, is not ready to work in servicing.
I also stand for diversification. At least 20% of assets must be available for immediate cash out in order to sustain your business in crisis times. I've had such situations in my practice. Besides, in such moments it is relatively cheap to take in a rival.
- What are your criteria for new projects?
- The main principle is a possiblity to do big business. If a project does not have chances to capitalize at least one billion dollars I am not interested.
- Do you let go your assets easily?
- The law of business states that if your get too close to something it is no longer business but a hobby. Hence, if someone offers you a good price, you should sell without doubts. It's better to have diversified assets to keep the aggregate basket intact. But I have difficulties with firing people. Every time I have to set up my mind before telling a person I don't take him for another project. Everything depends on individual characteristics and skills. A perfect fit for one project may not be the same for another one. Such things are better to be told in person.
- What is Ukraine for you?
- Together we can do better than apart. The level of our current economic relations lags far behind the level of affinity between our people and of potential of mutually beneficial development.
This is the matter of political will, nothing else. As for the European integration, all we have to do is assist. Russia needs allies in Europe. Ukraine is 'our people'. If you get in Europe before us we will be happy, and if we get their first we will give a hand.
- But what about the idea of EuroAsian union, which is being promoted as an alternative to the EU?
- There is no real alternative. For 20 years we have been trying to put together the pieces of the broken Soviet Union and... nothing. After all these years we should know better. Our reunion path goes through All-European mechanisms. Europe is a value choice for both Moscow and Kyiv. It is more solid platform than the nostalgia for USSR.
- To sum up please tell us an interesting episode from your life connected to Ukraine?
- On the occasion of the opening of Kyiv branch of our bank in 1995 we had a party. In the end we all ended up in my hotel room. When the party was over and people started leaving I saw a girl standing alone. I was tired and was going to sleep, so I simply asked 'Who are you?' She said: 'I was invited but then they left. I'll be going now, have to grab a taxi.' Well, word after word we started a conversation. I found out she was a single mom from Kyiv renting an apartment because she did not have enough money to buy her own. And then, just like that, I said: 'Do you believe in fairy tales?' She stared back at me, a little bit freaked. 'No'. Then I took out a pack of banknotes and gave her a half.
The most interesting that after some time my new unexpected friend invited me to her housewarming party and wedding. With her own apartment she was back on the market and a groom did not make her wait long. So, yes, I personally took part in the fortune of one Ukrainian citizen.
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