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. Last Updated: 07/27/2016

Boiko Stands by Insurer's Sell-Off Despite Delays

Russia will sell its biggest insurer, Rosgosstrakh, but due to lawsuits and confusion over the legality of state sell-offs, this sale will take some time, State Property ministry officials said Tuesday.

"We are going to privatize Rosgosstrakh in a new way, without breaking the law," State Property Minister Maxim Boiko told government officials. "We must review our own decisions. If they are wrong, we must acknowledge the mistakes we have made, the way we did with Rosgosstrakh."

Last week Boiko cancelled Rosgosstrakh's original privatization plan. Under that scheme, employees bought 20 percent of shares, a nine-member managers team RGS-Trust had a priority right to buy a 30 percent stake at bargain prices and the remaining 50 percent was to be sold at an auction this year.

But a regulation approving the plan was cancelled by Boiko's predecessor, Alfred Kokh, in June. A State Property Ministry official, who asked not to be identified, said Russia's current privatization law only covered companies, which excluded Rosgosstrakh from a normal sale because it was an organization under the Finance Ministry before the economic reforms started.

But the ministry has not yet come up with a formula that will overcome the legal obstacles.

"New terms have not been worked out," the official said. "We shall start working them out only after all legal procedures around Rosgosstrakh are over."

Earlier this month, RGS-Trust won a suit that overturned the ministry's decision to cancel the disposal, but the government plans to appeal.

"We expect a long legal process," the official said. "The government's position is firm. We are not going to give in."