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. Last Updated: 07/27/2016

Kiriyenko Rules Out Top Post for Chubais




Acting Prime Minister Sergei Kiriyenko has dismissed the possibility of former First Deputy Prime Minister Anatoly Chubais becoming chairman of the board of Russia's national electricity company Unified Energy Systems, saying a government representative needs to fill the post.


But a source from the Fuel and Energy Ministry said Chubais may replace Boris Brevnov as the company's chief executive, Itar-Tass reported.


Chubais was dismissed in a Cabinet shake-up last week but was still considered a top contender to take over at UES, Russia's largest company by sales. Before the Cabinet reshuffle, the government had nominated Chubais to be elected chairman of the board of directors at a shareholders meeting April 4.


But Kiriyenko told NTV television Sunday that Chubais would not be allowed to stand as chairman of the board because he no longer holds a government post.


"The chairman of the board must be a representative of the state," he said.


The government owns a controlling stake in UES, where reformers and Soviet-era directors have clashed in recent months over management of the company. The government is looking to replace the current chairman of the board Anatoly Dyakov, the former UES director who tried to oust Brevnov from his post as chief executive last January.


Brevnov, a young banker brought in by acting First Deputy Prime Minister Boris Nemtsov to clean up UES last year, has been weakened by allegations of corruption. He has denied the charges, saying they were sparked by his moves to root out abuses at UES.


Kiriyenko, formerly fuel and energy minister, did not say whether the government might consider Chubais for chief executive at UES, but analysts said he had all but locked up the appointment.


Chubais, speaking on Russian television Sunday, said he still had the support of President Boris Yeltsin to take the reins at UES. "UES does exist as a possibility," he said.


Chubais accused business tycoon Boris Berezovsky of making "hysterical" comments regarding plans for him to take over at UES. "This is understandable because the president and the government are adopting decisions that are not to Berezovsky's liking," he said. "Regardless of my future position, the president views me as a member of his team."


Many analysts said the government is likely to appoint Chubais as chief of UES this week before the general shareholders meeting scheduled for Saturday.


"The decision has already been taken to propose Chubais as CEO," said one analyst who asked not to be identified. "It is now up to Chubais to decide whether he wants the position."


UES, a benchmark on Russia's stock market, has been crippled by debts stemming from the web of nonpayments in the economy. Analysts said if Chubais took over as chief, it could speed up reforms at the energy giant.


Brevnov's efforts to reduce energy tariffs for industry and reduce the company's debts have been applauded, but Chubais is expected to have more authority to push through key reforms.


With Chubais out of the running for chairman of the board, the field is now open. Shareholders have nominated 30 candidates to the 15-member board of directors, but the government is expected to have the final say on who becomes chairman.


Sergei Bubnov, a utilities analyst at CS First Boston, said possible candidates to take over the chairmanship include Deputy Economics Minister Nikolai Shamrayev, Deputy State Property Minister Alexander Beloyusov, and Deputy Fuel and Energy Minister Viktor Kudryavy.


Several analysts said Kudryavy, who worked under Dyakov when he was the head of UES, might be considered a compromise candidate.


"The government needs to be careful to have a balance between conservatives and reformers in the company," one analyst said.