Russia MinFin opposes Russian Tech expansion

Deals

Russian Finance Minister Alexei Kudrin has attacked plans by one of Prime Minister Vladimir Putin's allies to gain control over hundreds of state-owned stakes in firms.

Sergei Chemezov, a close Putin ally, has asked the Kremlin to transfer the state's stakes in hundreds of firms to the Russian Technologies state corporation he heads. Media reports have said the plan is then to sell stakes in some of them.

But the plan has been opposed by an unusual alliance of liberals and hardliners who say Chemezov is trying to wrestle too much power for Russian Technologies, already one of Russia's biggest industrial groups.

Kommersant newspaper reported that Kudrin, a leading supporter of market reforms, has opposed plans by Russian Technologies to sell on some of the state-owned stakes. Kudrin said the plans amounted to hidden privatization.

“Carrying out such a proposal is a hidden form of privatization,” the newspaper quoted Kudrin as saying in a letter to a fellow minister. The finance ministry confirmed the letter existed but gave no further details.

“(It) also assumes non-transparent sales mechanisms for the assets as well as the absence of control over the use of such revenues by the state corporation itself,” Kudrin said.

Such a practice “was directed towards taking from federal revenues using the sale of state assets,” the letter said, according to Kommersant.

Russian Technologies declined immediate comment.

The firm is based on the assets of arms exporter Rosoboronexport and has stakes in AvtoVAZ, Russia's top carmaker, and VSMPO-Avisma, the world's largest titanium producer.

It is one of several state corporations set up by Putin while he was president in an attempt to foster the non-resource sector of the economy.

But critics say some of the state corporations distort the market and have used their influence to snap up assets, boosting the state's presence in the economy. (Reuters)

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