Publication: Monitor Volume: 5 Issue: 124

Anatoly Chubais, who has been fired and re-hired by President Boris Yeltsin many times, not only survived the June 26 shareholders’ meeting for United Energy Systems (UES), Russia’s electricity grid, but has come out stronger. Earlier this month, rumors had circulated that Chubais might be ousted from his position as head of the company’s board of governors (UES’s top managerial position). But, on June 24, in a clear vote of confidence in Chubais, President Boris Yeltsin ordered the government’s representatives on the UES board of directors to amend the company’s charter so that it will be possible to change the company’s management only if 75 percent of the shareholders agree to the change. The state owns about 52 percent of UES’s shares, while foreign backers of Chubais own 33 percent of the remainder (some 16 percent of the whole) (Russian agencies, June 24).

According to one account, Chubais managed to cut a deal with the Kremlin administration that he keep his job in return for lobbying on behalf of Kremlin administration chief Aleksandr Voloshin to become the chairman of the UES board of directors (Novoe izvestia, June 26). Indeed, in a television interview aired yesterday evening, Chubais said that Voloshin may be elected to chair the UES board of directors, adding that the cabinet of Prime Minister Sergei Stepashin had made it clear that they want Voloshin in that position (NTV, June 27).

Some observers believe that Chubais’ success in hanging on at UES, and his apparent lobbying of Voloshin for the position of board of directors chairman, suggests that the Kremlin inner circle, also called the “Family,” has split. According to this view, the tycoon Boris Berezovsky, Sibneft oil chief Roman Abramovich and Yeltsin’s daughter and adviser Tatyana Dyachenko had tried to get Chubais removed from UES. Voloshin, however, broke ranks. Yeltsin’s apparent support for Chubais suggests that the head of state has turned back to his time-honored strategy of dividing and ruling the political-financial elite.

The new voting rules for UES shareholders means that Chubais can remain the company’s top manager essentially for life, making him one of Russia’s leading “oligarchs.”