Russian Stock Market Slides Following Conviction Of Prominent Dissident Navalny

A few hours ago, in a somewhat ironic development, Russia's most prominent opposition campaigner - whom some have likened to the US' own Edward Snowden in terms of his whistleblowing aspirations - was found guilty of embezzlement and sentenced to five years in prison, some 19 months after leading the biggest protests to challenge the Kremlin's rule since the Soviet Union's collapse. This immediately hit none other than the local "wealth effect" with RIA reporting that "Russia's stock market fell sharply on Thursday according to Moscow Exchange data, after investors took in the news that opposition blogger Alexei Navalny had been found guilty in a controversial fraud trial and sentenced to five years in jail."

The market's immediate response was clear:

More from RIA:

The court in the city of Kirov, about 900 kilometers (560 miles) east of Moscow, found the vocal Kremlin critic guilty of organizing the embezzlement of about $500,000 worth of lumber from state-owned company KirovLes.

As of 1:21 p.m. Moscow time (9:21 a.m. GMT), the ruble-denominated MICEX index plunged by 1.51 percent on Wednesday’s close to 1,410.22 points while the dollar-denominated RTS index plummeted 1.50 percent to 1,372.15 points.

The conviction, unless overturned upon appeal, will prevent Navalny from running for public office, just a day after he registered his candidacy to stand in September elections for the Moscow mayor's post.

Never heard of Navalny? You should - he may soon be living indefinitely in the transit terminal of JFK, if he manages to escape from Russia first of course.

Navalny, a whistle-blowing blogger well-known for leading mass protests against Russian President Vladimir Putin, has denounced the charges as politically motivated.

The founder of the anti-graft website Rospil and a shareholder rights campaigner, Navalny has in recent years sought to obtain documents via court rulings from a number of state-run companies, in a bid to make their activities more transparent. As a minority shareholder in state-run oil major Rosneft, Navalny attempted to get the company’s minutes of board meetings for 2009, and also copies of agreements on crude oil supplies to China.

The Navalny verdict will seriously affect the investment climate in Russia, political experts polled by RIA Novosti said on Thursday, adding the verdict was politically motivated.

“Naturally, the verdict was politically motivated - this is my personal opinion,” political analyst Vladimir Slatinov said, adding Russia’s investment climate would worsen after the verdict.

“No doubt, this will affect the investment climate. We have a whole number of similar high-profile cases and this is an extremely negative signal for investors,” he said.

That view was shared by Alexei Mukhin, head of the Center for Political Information think-tank.

“Navalny will hardly become a second [Mikhail] Khodorkovsky but this will nonetheless cause an explosion in political life,” he said, also adding the investment climate in the country would be worse as a result.

To be sure there is a modest irony with Snowden seeking refuge from political persecution in Russia even as Putin unceremoniously manhandles all political opposition in the only way he knows. The WSJ adds more:

Alexei Navalny, a 37-year-old activist and anticorruption blogger who has described the trial as a politically motivated attempt to silence him, looked solemn as Judge Sergei Blinov read the sentence at Kirov's Leninsky District Court. Mr. Navalny was immediately taken away into custody by guards in the courtroom as some in the gallery cried, while others including his wife remained stoic. Mr. Navalny's lawyer announced plans to appeal the verdict, which caused Russia's Micex index to fall more than 1.5%.

"OK, now don't get bored here without me," Mr. Navalny wrote on Twitter just as he was led out of the courtroom. "And more importantly, don't procrastinate. A toad won't throw itself off an oil pipe on its own." The message was a reference to toppling a Russian government deeply reliant on hydrocarbon funds.

The ruling marks the low point for an anti-Kremlin opposition movement that galvanized tens of thousands of mostly middle-class Muscovites in late 2011 and early 2012 but has since buckled amid fair-weather support, limited funding and a crackdown by Russian authorities that has landed many of its leaders in court.

Mr. Navalny was the most charismatic new face to come out of those demonstrations, which exploded in the wake of parliamentary elections in late 2011. He accused President Vladimir Putin of running a "party of crooks and thieves," a slogan that became the rallying cry of the anti-Kremlin movement, and began raising money online, a relative rarity in Russia. For many, he was seen as the leader with the best chance to broaden the makeshift opposition's appeal beyond Moscow's urban elite.

The bottom line message political empires from the US to the USSR Russia are sending across the world: dissent will not be tolerated, and those who expose the rot below the surface will be handled appropriately and swiftly.