"Transneft Says Higher Dividends Would Deprive Orphans, Sick"

To know them is to love them.

From Bloomberg:

OAO Transneft, Russia’s monopoly pipeline operator, says paying more dividends would curtail aid to orphans and other charity work.

Transneft made 3.2 billion rubles ($112 million) of charitable contributions in 2009, 7.8 times more than the dividends it paid to private investors, according to the company’s financial reports. That spurred preferred shareholders such as Prosperity Capital Management Ltd. and East Capital to demand more information as they seek a larger slice of profit.

Higher dividends would reduce money destined for “the sick, supporting sport, renovating churches and monasteries,” Moscow-based Transneft said in a document dated March 16 and filed as part of the company’s appeal against a ruling requiring it to release board minutes.

Alexey Navalny, a shareholder activist who filed the suit to uncover details of the state-owned company’s philanthropy, put the appeal on his website today. Russian President Dmitry Medvedev seeks to improve safeguards for minority shareholders to lure foreign capital and plans to set up a $10 billion fund to co-finance international investment in Russian companies.

“It’s a nice piece of Soviet propaganda,” said Alexander Branis, chief investment officer at Stockholm-based Prosperity, which manages about $5.6 billion of assets. “But its charter says the company’s main aim is to make money for its shareholders, not raise money for worthy causes.”...MORE

I'm not sure what to make of Prosperity. They are quoted, after the jump, as saying:

...Giving investors a say would make Transneft a “proper company” with shareholder meetings and analyst calls, and improve its price-earnings ratio, according to Prosperity. 

HT: Streetwise Professor who comments:

...Given that Transneft is one of the most corrupt companies in the galaxy, I’m guessing that the widows, orphans, and monks who are getting the cash not going to shareholders have numbered Swiss accounts, and are driven to and from vulgarly luxurious dachas in gated communities in black Mercedes with flashing blue lights, chauffeured by neckless men in black turtlenecks....

As I said, to know them is to love them.