Publication: Monitor Volume: 2 Issue: 77

The Russian government plans to buy back some of the shares in leading industrial enterprises that it sold in last autumn’s controversial "shares for loans" auctions. At issue are said to be the state’s holding in three of Russia’s leading oil companies and in Norilsk Nickel, Russia’s largest producer of nickel and platinum, where the sale of shares to Oneksimbank has been fiercely resisted by the incumbent management. (Itar-Tass, April 18; Financial Times, April 19) Prime Minister Viktor Chernomyrdin told a meeting of the Russian government yesterday that the government would backtrack neither on privatization nor on the practice of auctioning shares, but that mistakes had been made in the privatization process and the government would in the future proceed with greater caution. The "shares for loans" auctions have been widely suspected of masking a series of cut-price insider deals.

First Deputy Chairman of the State Property Committee Alfred Kokh told Russian television last night that privatization would continue, but would in the future concern "only about ten individual enterprises a year." (ORT, April 18) Economics minister Yevgeny Yasin was more outspoken. He told Interfax April 17 that privatization had been "virtually suspended" and that he found this "discouraging." Yasin predicted that this week’s decisions would discourage further investment in Russian industry. "I am suspicious about what is being done," Yasin concluded.

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