16 OGK-2 Execs Quit For Payout

Sixteen senior managers at power generator OGK-2 have quit en masse to collect a combined payoff of $23 million in a step that has enraged its owners, Gazprom and Unified Energy System.

The managers resigned after the company's board on May 27 approved the resignation of its general director, Mikhail Kuzichyov, Gazprom and UES said in a joint statement late Tuesday.

The managers are now eligible for compensation packages totaling 557 million rubles ($23.4 million).

The board installed the company's executive director, Stanislav Neveinitsyn, as the new general director.

In their statement, Gazprom and UES condemned the managers' actions, which they said had "not been coordinated with the shareholders."

The managers had caused "significant financial and image risks" to the company and could hurt its credit rating, investment program and secondary share sale, the statement said.

Gazprom, which owns 52.4 percent of OGK-2, said it "would use all legal measures to prevent financial damage."

A source close to Mezhregiongaz, the Gazprom subsidiary that manages its power assets, described the managers' actions as a "multimillion [dollar] fraud."

"Kuzichyov organized a huge bank loan for the company without the knowledge of Gazprom, [which] was subsequently spent on the compensation packages," the source said late Tuesday. "Kuzichyov later accepted the resignations of his management colleagues without getting the board's approval, helping them get the maximum payoffs.

"We are now conducting an investigation," the source said.

Spokespeople for OGK-2, UES and Mezhregiongaz were not immediately available for comment Tuesday evening.

Alexander Kornilov, a utilities analyst at Alfa Bank, said the managers were cashing in on a special compensation package offered by UES, which gives managers who resign a payoff of up to two to three years' salaries.

The system had been created to help UES managers who would be left out of a job July 1, when the former electricity monopoly ceases to exist, Kornilov said.