* Rosneft not "a charity fund" - CEO Sechin
* Committee formed to liaise with minorities
By Katya Golubkova and Vladimir Soldatkin
MOSCOW, June 6 (Reuters) - Rosneft will not pay adividend for 2012 to minority shareholders in TNK-BP,the oil company it bought earlier this year, in another blow toinvestor confidence in Russia.
Minority shareholders own around 5 percent of TNK-BP Holdingwhich was acquired by Rosneft along with its parent TNK-BP in a$55 billion deal to create the world's largest publicly tradedoil company by output.
The minority shareholders had received generous dividendsunder TNK-BP's previous owners - BP and a consortium ofSoviet-born billionaires. Portfolio investors were attracted tothe company's small free float by a double-digit dividend yield.
But Rosneft said on Thursday its dividend policy could onlybe extended to TNK-BP from the closing of the acquisition, whichwas on March 21.
Rosneft CEO Igor Sechin, a close ally of President VladimirPutin, has said that Rosneft is not "a charity fund", has noobligation to TNK-BP Holding's minorities and would not offer tobuy them out.
The harsh treatment of minority shareholders has damaged investors' confidence in the Russian stock market, which tradesat a valuation discount of around half to other emerging marketsin part due to weak corporate governance.
"Of course it's not a good decision - shareholders wereexpecting profits to be paid. It's a very bad sign for theRussian investment climate," one minority shareholder toldReuters.
It has also raised concerns about the position of BP, theBritish oil major, which sold its one-half stake in TNK-BP in acash and stock deal that left it holding a stake of nearly 20percent in Rosneft.
TNK-BP Holding's shares, down by over 30 percent since thestart of the year, fell by as much as 8 percent beforerecovering to trade 2.4 percent lower in a flat overall market.
FORMER CASH COW
But in a sign that minorities, which include FranklinTempleton's emerging markets group, could get payouts in future,Rosneft also said it planned to create a special committee towork with them.
"Rosneft decisions relating to TNK-BP Holding dividendpolicy will be announced after the issue is considered by theTNK-BP Holding minority shareholders committee that is beingestablished," it said.
The committee, to be chaired by vice-presidents SvyatoslavSlavinskiy and Igor Maydannik, will discuss the issue afterTNK-BP Holding's annual general meeting on June 27.
Based on TNK-BP Holding's current market capitalisation of$19.8 billion, buying out minorities would cost Rosneft around$1 billion.
Investors would be happy to be bought out but also to bepaid a dividend.
"It would be a good outcome and also a good thing for Russia- it's not a big deal for Rosneft," one portfolio manager at alarge foreign fund said, referring to a buyout. "But, if we arepaid 25 percent of Rosneft's profit in dividends, we would behappy too."
Last month, Rosneft's board proposed paying 25 percent ofits net profit under international standards in 2012 dividends,or 85.3 billion roubles ($2.7 billion) in total - in line with aminimum payout ratio required for state firms.
But instead of returning cash accumulated by TNK-BP duringlast year's takeover talks through a dividend, Rosneft opted toborrow $9.7 billion for five years in the form of inter-companyloans, leaving TNK-BP minorities empty-handed.
BP (BP.)
