Leading Russia-dedicated investment fund Prosperity Capital Management has lashed out at the decision by Russian supermarket giant Magnit’s founder Sergei Galitsin to sell almost all his shares to state-owned banking titan VTB, calling it “a spit in the face of investors” on February 16.

“This is absolutely ugly and worst behaviour on the part of the state bank,” the director of Prosperity Capital Management Alexei Krivoshapko said in remarks reported by Vedomosti.

“From the point of view of corporate governance, the purchase by VTB Bank of 29.1% in the retailer Magnit is structured in an ugly way, said Krivoshapko.

Magnit has been a favoured stock with international investors for years and PCM has been one of the largest independent shareholders in the company, using the 2008 crisis as an opportunity to increase its stake, the fund told bne IntelliNews at the time.

Krivoshapko complained that the structure of the deal gives VTB de facto control of the company, but as the transaction comes in at under 30% the automatic obligation to make an offer to minority shareholders (including PCM) is not triggered.

"They specifically bought a little less to not do it,” Krivoshapko told the Russian daily. “This is absolutely ugly and worst behaviour on the part of the state bank," Krivoshapko said. “This suggests that he wanted to spit on the market and on minority shareholders, it's a spit in the face of all investors. This is unacceptable, and this, I think, will still come to them."

PCM has been investing into Russia for more than two decades and currently has $4.3bn of assets under management (AUM). It has also been an aggressive and proactive investor, frequently taking Russian oligarchs to court if it feels its shareholder rights have been abused.

“We used to lose all our cases in the 90s,” co-founder Mattais Westmann told delegates at a MOEX investment conference in New York last year. “Now we win most of them.”

In the most recent run-in with a powerful investor, PCM sued Oleg Deripaska in September who it accused of funnelling RUB11.5bn ($199mn) out of the GAZ car plant, where PCM was a minority investor.

So far Krivoshapko says the fund is studying the situation with the Magnit deal worth RUB138 ($2.4bn), which was announced earlier the same day as he made his comments. VTB will become the largest shareholder of Magnit with 29% of the retailer Magnit, with Galitsky retaining 3% of the company.