Russia energy firms to see board changes as Medvedev targets ministers
Moscow (Platts)--31Mar2011/548 am EDT/948 GMT
Russian energy firms like Rosneft, Gazprom and Transneft are set to
see board-level changes as President Dmitry Medvedev has ordered his
government to remove ministers who supervise certain industries, from
the boards of companies in those spheres, in order to eliminate
"excessive influence" of state-run companies on the country's investment
climate.
This means, among others, Russia's Deputy Prime Minister Igor Sechin,
who supervises the oil industry, will have to leave his post as the
chairman of the board of Russia's biggest oil producer Rosneft by middle
of this year.
Medvedev announced his plans to improve the investment climate in the
country, which includes a total of 10 steps, on Wednesday at a
governmental meeting on modernization of Russia's economy in the city of
Magnitogorsk, in the south of the Urals region.
To improve the investment climate and eliminate excessive influence of
state companies, the government is "to initiate taking decisions by
shareholder meetings; and to replace ministers and deputy prime
ministers with independent directors by the middle of this year,"
Medevedev said, according to minutes of the meeting posted at the
Kremlin's website.
Besides Sechin, Russia's First Deputy Prime Minister Viktor Zubkov,
who chairs the board of the national gas monopoly Gazprom, will also
have to go.
Others who will have to go include Energy Minister Sergei Shmatko, the
chairman of the board of oil pipeline monopoly Transneft. He is also a
director at Gazprom and power utility RusHydro.
Minister for Economic Development Elvira Nabiullina is also a Gazprom
board director.
General shareholder meetings of many state-run companies traditionally
take place in June.
Analysts viewed the development mostly as neutral.
"In itself, the move is unlikely to change anything, as the exclusion of
ministers and deputy prime ministers from [the boards] does not
necessarily mean they will lose their influence over the companies'
actions or ability to support them," analysts with Alfa-Bank said in a
note.
"Allowing government officials to serve on the boards of companies in
industries they regulate formally limits competition, but we doubt
potential changes would alter the nature and not just of the form of
state involvement," agreed Ildar Davletshin from Renaissance Capital.
Davletshin also noted that the move could be positive for inefficient
companies such as Gazprom and Transneft, as it could potentially help
improve transparency and corporate governance. At the same time, the
move was seen as neutral for Rosneft, which is more efficient than most
of its private peers, he added in a note.
Among other measures aimed at improving the business climate, Medvedev
ordered authorities to "fix and announce" the schedule of privatization
of major stakes in state-run companies for the next three years, reduce
taxes, strengthen the fight against corruption and ease administrative
barriers.
Russia needs to drastically boost investments in the national economy in
order to modernize it, Medvedev said.
"We need trust and interest from domestic and foreign investments. But
what do we see today? Unfortunately, we see a shortage of this trust,"
Medvedev said at the meeting, adding that the investment climate has
remained "very bad" in Russia and this year it has worsened further for
many, especially, "small- and medium-sized businesses."
--Nadia Rodova,
nadia_rodova@platts.com
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