Norilsk shares fell on 11% on Tuesday, after the announcement – the biggest drop in a month, and dragging the Micex down by 3% – after the office of Deputy Prime Minister Igor Sechin wrote to the company seeking information on its share buyback, asset purchases, and sale of mining permits to a company controlled by former CEO Mikhail Prokhorov in 2008. On Wednesday they edged lower again as the RTS and Micex climbed.

Marat Gabitov, UniCredit Metals Analyst, says the probe comes as billionaire Alisher Usmanov tries to broker a deal between his company, Metalinvest, and NorNickel.

“The investigation that was recently launched is connected with Alisher Usmanov – He did not like all the deals that were carried out last year, which led to an outflow of cash from NorNickel, and he did not participate in them.”

The probe follows in the wake of last Decembers reopening of an investigation into Uralkali’s 2006 Berezniki mine flooding which rocked the share price of the company.  Investigations into companies, and criticisms by senior political and administrative figures, hurt Russia’s investment profile according to Uralsib Chief Strategist, Chris Weafer.

“Events like the investigation of NorNickel following last year’s investigation of Uralkali and the comments against Mechel. Essentially because of the legacy of Yukos investors are always concerned that these events will hit the agenda and that there can be something more to it, that will hurt value for shareholders.”

Their first reaction was to sell – despite the recent gains in Russian stocks and a return to focus on emerging markets in general.

However the country-specific risks for investors – a high dependence on oil prices and political factors – still remain for heavy-weight international players that are currently neutral but looking for signs on whether to enter or leave the market.