RUSSIAN OIL COMPANY SHARE ISSUE REVOKED.

One gesture towards more open corporate governance came on February 17, when the Federal Securities Commission announced it was annulling the December 17 issue of convertible bonds by the Sidanko oil company (which is 85 percent owned by Oneksimbank). Foreign investors who owned four percent of Sidanko complained that they were excluded from the deal, which was diluting their share in the company. British Petroleum itself paid $571 million to buy ten percent of Sidanko on December 31, and has formed a joint venture with Sidanko, Russia Petroleum, for exploitation of the Kovyktinsk gas deposit in Irkutsk. (Russky telegraf, February 19) The emergence of vertically integrated oil companies is bad news for minority investors in their subsidiary companies, but suits Western oil giants who want to make deals with a few major players.

Another positive development was the February 20 appointment of US citizen Semyon Kukes as director of the troubled Tyumen Oil Company (TNK). This company has been the center of a protracted boardroom battle since Alfa group bought 40 percent of its shares last July. Kukes left the Soviet Union in 1979 and worked for Philips Petroleum and Amoco, before transferring to Amoco’s partner Yukos as vice president for marketing in 1996. (Russky telegraf, February 21)

Tax Exemptions for Russian, Ukrainian Auto Industries Come Under Attack…