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. Last Updated: 07/27/2016

FSB Man Tapped for Aeroflot Board

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Aeroflot on Wednesday released the list of candidates for its new board of directors, with the surprise inclusion of the FSB's economic crime chief.

The new board is to be elected at an extraordinary shareholders meeting in September, at the request of new shareholders linked to Sibneft owner and Chukotka Governor Roman Abramovich.

The 13-person list for the nine seats in the majority state-owned airline includes the deputy head of the Federal Security Services, or FSB, Yury Zaostrovtsev, along with state officials, company managers and new shareholders.

Zaostrovtsev, whose candidacy was put forward by the state, is reportedly linked with Siberian Aluminum. Analysts said Wednesday he could be a compromise figure between the interests of the state and new shareholders.

The extraordinary shareholders meeting, due Sept. 6, was called by offshore company Carroll Trading, which owns a 10 percent stake in Aeroflot.

The new shareholders, who have managed to accumulate up to 29 percent of the airline, include other offshore companies besides Carroll Trading and are all allegedly connected with Abramovich. They did not manage to put forward their representatives in time for Aeroflot's annual shareholders meeting on May 19 and only voiced their intention to be represented on the board afterward.

The new shareholders' nominees are Aeroflot deputy general director Alexander Zurabov; director of corporate relations at Russian Aluminum Alexander Komrako; and two other businessmen close to the aluminum giant, Prospect Brokerage's Mikhail Vinchel and Profit House brokerage's Alexander Nemtsov.

Industry analysts said the new shareholders could win board seats for three of their candidates. Five are expected to go to the state, which, in addition to Zaostrovtsev, nominated First Deputy Property Minister Alexander Braverman, Transport Ministry department head Vladimir Goryachev, Economic Development and Trade Minister German Gref, Deputy Property Minister Sergei Molozhavy, Transport Minister Sergei Frank, Deputy Finance Minister Vladimir Chernukhin, and presidential assistant Yevgeny Shaposhnikov. The last spot is expected to go to management's candidate, the airline's general director, Valery Okulov.

When asked Wednesday about Zaostrovtsev's candidacy, the secretary of Aeroflot's board, Anatoly Brylov, said there was nothing strange about the state nominating an FSB official.

"It's in the competence of the state to decide who should represent its interests on the board," Brylov said by telephone. "The board is renewed by one-third every year with various ministries being represented."

Brylov added that for four years starting from 1994, a member of the security services had been on the Aeroflot board, but then this practice was abandoned. He would not say why the practice is now being reinstated.

The FSB refused to provide information on Zaostrovtsev on Wednesday. Local media earlier reported that Zaostrovtsev left the FSB in 1993 after serving in its department of economic counterintelligence. Novaya Gazeta reported last month that he had worked for a number of companies, including Medoks, part of Siberian Aluminum. Siberian Aluminum, a major shareholder in Russian Aluminum, denied Wednesday that Zaostrovtsev ever worked for the company.

Zaostrovtsev joined the presidential administration in 1998 and later that year returned to the FSB, Novaya Gazeta reported. Having received secret service training in St. Petersburg, Zaostrovtsev is said to be connected with President Vladimir Putin.

Government board members were unavailable for comment.

Industry analysts said Zaostrovtsev has a strong chance of being elected to the new board, but his role is not yet clear.

"It could be a compromise … between the government and Russian Aluminum," said United Financial Group transport analyst Yulia Zhdanova.

Zhdanova said Zaostrovtsev's nomination could indicate the government wants to ensure better control of the company, to avoid a repetition of the scandal in which hundreds of millions of dollars were allegedly funneled out of Aeroflot via two Swiss companies.

Yelena Sakhnova of Aton brokerage said that if indeed Zaostrovtsev is connected with Siberian Aluminum, it may lead to cooperation between the government and new shareholders. "It may be positive," she said.

Earlier, Molozhavy said the government did not expect the new shareholders' policies would run counter to Aeroflot's course of development.