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. Last Updated: 07/27/2016

EDITORIAL: Gazprom Must Give State Its Due




To watch Gazprom chief executive Rem Vyakhirev last Friday basically telling the government - the biggest single shareholder in his company as best we can tell - to get lost was to realize yet again just how badly the various administrations installed by President Boris Yeltsin have mismanaged this country.


While the Russian state has become weaker and weaker, Gazprom has moved from strength to strength.


Having prospered at least partially thanks to kind government treatment, Gazprom has joined numerous of the nation's richest and most powerful companies in tax delinquency. Its recent increased willingness to pay a significant proportion of its taxes in cash probably has more to do with the ruble devaluation and its advantageous effects for exporters like Gazprom than with any great sense of civic duty.


Meanwhile, Gazprom has regularly defied attempts by the government to have a say in the running of a company in which it owns a 37.5 percent stake.


When the company was privatized - outside of voucher privatization - shadowy management structures were allowed to grab 35 percent while the state retained just 40 percent, out of which a 2.5 percent stake has since been sold.


Soon after, the government's stake was signed over to Vyakhirev, an astonishing surrender of the state's interest in one of the world's most valuable companies. This bizarre state of affairs has been seriously challenged only once, in 1997 by then First Deputy Prime Minister Boris Nemtsov. He failed miserably.


Now, at last, Russia's government is again trying to get that stake back.


The motives behind this move are, to say the least, highly suspect. As Vyakhirev himself pointed out, this question tends to come up when elections loom.


Furthermore, with numerous plausible allegations flying that recent appointments at the State Pension Fund, the Customs Service and elsewhere are part of a series of frantic moves to give the Kremlin access to major cash flows, the moves against Vyakhirev may well be part of the same pattern. Be that as it may, it would still be good to see the state's stake back in the state's hands.


For one thing, how can Russia act to defend shareholders' rights when it cannot defend its own.


For another, whether or not the current regime abuses its control of the 37.5 percent stake in Gazprom - worth about $10 billion based on the price Ruhrgas paid in December for a 2.5 percent stake - some day a Russian government interested in using that stake and others for the good of the people may come to power.