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Thread: Putin may fine tycoons for low utilities investment

  1. #1
    A Self Important Senior Contributor troung's Avatar
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    03 Aug 03

    Putin may fine tycoons for low utilities investment

    Putin may fine tycoons for low utilities investment
    By Gleb Bryanski Gleb Bryanski Wed Feb 24, 9:40 am ET

    SAYANO-SHUSHENSKAYA DAM, Russia (Reuters) Russian Premier Vladimir Putin threatened on Wednesday to slap heavy fines on some of the country's top tycoons for not investing enough in the power sector, while praising Western investors.

    In one of his classic appearances, Putin, who has a lengthy track record of market-moving attacks on the nation's business elite, said he was particularly upset by four oligarchs - Vladimir Potanin, Leonid Lebedev, Mikhail Prokhorov and Viktor Vekselberg.

    If they fail to fulfill their investment obligations, taken before the crisis when the state agreed to privatize power assets, they will not only face fines but will also be banned from selling power at market prices.

    Putin said state-run power firms and foreign power companies, such as Enel, Eon and Fortum, were sticking to investment obligations. "Meanwhile, our domestic investors have run away," Putin said as he chaired a meeting on the power sector in Siberia.

    "During the crisis we did everything we could to support you. The crisis is fading away so I ask you to fulfill your obligations," Putin said after overseeing the restart of the giant Sayano-Shushenskaya hydropower plant.

    The dam was restarted after being halted last August following an accident that killed 75 workers.

    Dark memories of that accident, that also resulted in higher-than-expected nationwide power price hikes and prompted calls for a new overhaul of the power sector, could have made Putin particularly angry on Wednesday.

    He not only mentioned the names of the oligarchs but spent a fair amount of time describing their fortunes and mistakes.

    Speaking of Prokhorov, Putin said: "Economically, he feels quite well. As some say, he cashed out. So he is visiting now different offices, he saw me the other day. I have very good relations with him. He is looking how to invest his funds but he must fulfill his (power investment) obligations".

    Prokhorov had topped Russia's rich list in 2009 as he sold most of his assets before the crisis peaked. He remains Russia's second richest man with personal wealth of $17.85 billion.

    Speaking of Potanin, Putin said: "He took giant assets for free... But nothing has been done as far as his investment program is concerned".


    Putin, Russia's President between 2000 and 2008, brought a large chunk of oil assets under state control as part of his drive to tighten the Kremlin's grip over the economy following chaotic sell-offs of the 1990s.

    By contrast, the power sector of the world's largest energy producer was almost fully privatized earlier this decade as Russia sought to attract new funds in the largely outdated industry to power the then booming economy.

    Potanin controls OGK-3, Prokhorov owns TGK-4, Leonid Lebedev controls TGK-2 while Viktor Vekselberg controls Complex Energy Systems.

    Putin's sharp criticism did little to move the shares as TGK-2, OGK-3 and TGK-4 outperformed the broader index, and traders said the firms' scarce free-float served as a cushion against deeper falls.

    "The statement was of course tough but it (investments) was agreed long before and he (Putin) simply reminded that obligations must be met... As far as fines are concerned, the companies are used to them," said Dmitry Solovyov, trader at Alfa Bank.

    Putin said only 38 out of 100 power plants planned for construction this year were currently being built while work has not yet started at 45 power plants.

    Investment in power become especially crucial as January power consumption returned to the pre-crisis level of 103 billion MW due to cold weather, he said.

    ($1 = 29.99 roubles)

    (Writing by Dmitry Zhdannikov; Editing by Louise Heavens)
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    To sit down with these men and deal with them as the representatives of an enlightened and civilized people is to deride ones own dignity and to invite the disaster of their treachery - General Matthew Ridgway

  2. #2
    Official Thread Jacker Senior Contributor gunnut's Avatar
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    27 Jan 06
    DPRK, Demokratik People's Republik of Kalifornia
    I'm actually surprised that we haven't tried this here in America. Wait...we'll just tax rich people to pay for everything.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  3. #3
    Global Moderator
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    ArmchairGeneral's Avatar
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    04 May 06
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    I saw the name Prokhorov and did a double take, because I've got the Wiki page on the Battle of Prokhorovka open right now. Funny meaningless coincidence.
    I enjoy being wrong too much to change my mind.

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