Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

GKI's Kokh Said to Be Thrown Out Of Dacha

In a move echoing Soviet-era practices of stripping privileges from disgraced government officials, Alfred Kokh, the overseer of last fall's controversial loans-for-shares scheme, has reportedly been thrown out of his state dacha.

Kokh, now first deputy chairman of the State Property Committee, or GKI, has been cited as a possible target of a criminal probe as prospects for some form of renationalization mount within parliament and the government itself.

Pavel Bunich, head of the State Duma's property and privatization committee, told a press conference his committee is drafting a new law on nationalization that could override the results of the loans-for-shares auctions, which saw government stakes in prized blue-chip companies transferred to banks in return for emergency cash.

Kokh, according to the newspaper Segodnya, was served with a one-day notice to leave his state dacha operated by the presidential administration. When he did not comply with the order, his be Kokh's office and other officials at GKI would neither confirm nor deny the report Thursday.

The government was expected to discuss privatization results and strategy Thursday but delayed a top-level meeting until next week for technical reasons, GKI spokesman Igor Plotnikov said. Earlier this week, GKI chairman Alexander Kazakov suggested the government might try to repay some loans by September, as permitted by the terms of the deal, thus retaining its stake in five oil companies.

Meanwhile, Prime Minister Viktor Chernomyrdin on Thursday appointed Kokh to represent the state's interests on the board of the Sidanko oil company, one of the firms in the loans-for-shares scheme, Interfax reported.

A spokeswoman at the Prosecutor General's Office said a decision on whether to press charges against Kokh and other GKI officials would be made at the beginning of May.

"We are investigating the course of privatization, and the name of Kokh is featured prominently," Natalya Veshnyakova said in a telephone interview.

She added that rumors of imminent charges against Pyotr Mostovoi, chief executive of the Federal Bankruptcy Agency, are "unfounded."

The prosecutor general is acting on the basis of a report put together by the Audit Chamber, a parliamentary watchdog group, last month. Excerpts of the report, concluded last week, were published Thursday by the communist Sovietskaya Rossia newspaper.

In the conclusion of the report, as quoted by Sovietskaya Rossia, the chamber writes that "the management of GKI, the Russian Federal Property Fund, and the Federal Bankruptcy Agency ... have in one way or another allowed the appropriation [of property], financial infringements that demand investigation on the part of the authorities."

Bunich said it was clear that the loans-for-shares process had gone awry and that the Duma would seek in its draft law to specifically outline the terms of any future sales.

"Auction terms were clearly violated when there was only one bidder," he said, referring to such cases as Uneximbank's acquisition of a 38 percent stake in Norilsk Nickel and Bank Menatep's uncontested bid for a 45 percent stake in the Yukos oil company.

"Privatization is a large-scale splitting of public property that attracts the interest of many groups, including the mafia, so we cannot leave it without control," Bunich said. Results of auctions of Norilsk and as many as 20 other enterprises would be reviewed, he said, adding that compensation would be paid if parliament voted by a veto-proof margin to reverse the results.

Bunich's committee will be acting on the results of a special parliamentary inquiry, headed by Communist deputy Mullanor Ganeyev, into the selloffs of Norilsk Nickel and other companies.

But while the potential scope of the Duma's review is sweeping, Bunich suggested last year's selloffs may be safe from parliamentary hands.

"We don't want anyone to think we'll reverse the process," he said.

At the same time, the government is drafting its own renationalization law, largely geared toward setting the rules for any future auctions.

"This doesn't mean that the law [on nationalization] will cancel the results of privatization," said Vladimir Palutin, deputy head of the property and privatization department in Chernomyrdin's office. He added that the legislation would provide compensation for any property reclaimed by the state.

However, one scenario mooted by both Bunich and Palutin is confiscation of property without any restitution if intentional breaches of privatization rules were uncovered.

"It's not just those who offer bribes who should be punished, but those who accept them as well," Palutin said.

A meeting of the GKI's board Wednesday drew up a series of measures to put its practices into line with the recommendations of the Audit Chamber, Interfax reported. In future, all interdepartmental documents will be registered with the Justice Ministry, a procedure not followed in connection with the loans-for-shares auctions.

One analyst saw all the machinations leading to eventual exposure of loans-for-shares as a deeply flawed process.

"This is not only an attempt to win votes in the elections by the government, but also the time when the truth has to be spoken," said Viktor Levashov, acting director of the Institute of Social and Political Research.

"In any case, this privatization chaos should be put into some kind of order sooner or later," he said.