Publication: Monitor Volume: 4 Issue: 45

Boris Brevnov, the 29-year-old president of Russia’s UES energy monopoly and ally of First Deputy Prime Minister Boris Nemtsov, seems to have strengthened his position in the run-up to the company’s general stockholders’ meeting next month. In so doing, however, Brevnov questioned the propriety of privatization decisions concerning UES made during the 1992-96 period. This could further unnerve investors already shaken by Brevnov’s near removal at the hands of board chairman Anatoly Dyakov last month.

Brevnov’s February 27 announcement that certain aspects of UES’s privatization were "inconsistent" with the relevant 1992 presidential decree followed a letter issued by the state prosecutor to other government officials on February 23, alleging a "series of serious shortfalls in the activities of the previous UES leadership". (Russian agencies, February 26) Brevnov described the destruction of UES’s Federal Network Company as one of these shortfalls. (Russian agencies, February 27) He argued that this company must be rebuilt from scratch before competition can be introduced into the generation of electrical power, as was called for by a series of presidential decrees issued last year.

These charges are seen as being directed at Dyakov, who prior to Brevnov’s appointment is alleged to have diverted UES revenues into private accounts and firms in which he held equity positions. Dyakov’s attempt to remove Brevnov last month was seen as having the support of Prime Minister Viktor Chernomyrdin, but was ultimately thwarted by First Deputy Prime Minister Nemtsov. Brevnov’s survival was confirmed by the meeting of government officials on February 23, where the decisions associated with Dyakov’s attempted putsch were formally annulled.

Attention now shifts to UES’s next shareholders’ meeting, which is to be held on April 4 in the Tver region. Nemtsov remarked last month that both Brevnov and Dyakov would be punished for their "scandalous" behavior: "Brevnov should be stripped of the right to use the company jet, Dyakov of the right to be the founder of dozens of companies". (Moskovskie novosti, February 15-22) Possible changes in UES’s 15-member board of directors, which at present consists exclusively of government officials and representatives of the power industry, are also of interest. While federal and regional governments own 52 percent of UES equity, foreign investors own 27.8 percent, and have long argued that they are entitled to representation on the board of directors. (Russian agencies, February 27)

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