Publication: Monitor Volume: 8 Issue: 52

Rumors continue to circulate that Aleksei Miller, the head of Gazprom, the 38-percent state-owned natural gas monopoly, may be on his way out after less than one year as the gas giant’s CEO. On Tuesday (March 12), an official from the Moscow department of the Tax Police revealed that Gazprom was under investigation for tax evasion to the tune of 30 billion rubles (some US$1 billion) and that the company could be formally charged by the end of this month (see the Monitor, March 13). The revelation sparked talk that Miller, who is currently on vacation, would not return to his post, and the rumored impending changes caused Gazprom’s shares to lose 8 percent of their value.

The press–in particular, one of Russia’s leading daily newspapers–added fuel to the fire today. Vremya Novostei reported that the government had reacted with “shock” upon learning recently that the draft budget which Gazprom’s managers will present to its board of directors tomorrow has a deficit of more than US$5.6 billion and that the company intends to plug this hole not only by selling shares, but also by receiving tax breaks. “I cannot even say that the request for privileges was the last thing which was expected from Miller; such a request was not even on the list of what was expected,” the paper quoted an unnamed source inside the government as saying.

President Vladimir Putin and his team chose Miller last year to replace Rem Vyakhirev as Gazprom’s CEO and reportedly gave him the brief to eliminate the corruption and nontransparent practices with which the gas giant became associated in the 1990s. Vremya Novostei reported that, while the Kremlin was “more or less” satisfied with the way Miller had regained control over renegade Gazprom affiliates like the petrochemical giant Sibur, which were allegedly used to strip assets belonging to the gas monopoly, it has also been forced to admit that company’s problems have only grown in number during Miller’s tenure. According to Vremya Novostei, his tenure has also seen a leap in the number of special services veterans in top positions at Gazprom. Miller has lost both Putin’s 100-percent backing and the support of those Kremlin insiders who originally lobbied for his accession as Gazprom’s CEO, the paper reported. Vremya Novostei even named Miller’s likely replacement–Sergei Bogdanchikov, the head of the state oil company Rosneft and a business partner of Sergei Pugachev, a close Putin associate. Pugachev was board chairman of Mezhprombank until last December, when he was named to represent the republic of Tuva in the Federation Council, the upper chamber of Russia’s parliament. The paper quoted its government sources as saying that the only remaining question was whether Miller would be removed as Gazprom’s CEO prior to the company’s annual shareholders meeting in June (Vremya Novostei, March 14).