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. Last Updated: 07/27/2016

State Enters Moscow's Power War

The federal government stepped into the heated battle for control of Moscow?s electricity and heat supply Thursday, throwing its weight behind Anatoly Chubais? efforts to strengthen his grip on Mosenergo ahead of a controversial shareholders vote.

Chubais, head of Unified Energy Systems, which owns 52 percent of Mosenergo, accuses the utility?s director, Alexander Remezov, of financial mismanagement and wants him sacked at an extraordinary shareholders meeting scheduled for Friday.

But Remezov, who has been cleared of any malfeasance in two external audits, has the support of Moscow Mayor Yury Luzhkov and City Hall, which owns just under 3 percent of Mosenergo and publicly railed against UES this week and threatened to initiate bankruptcy proceedings against it.

Energy Minister Igor Yusufov chimed in Thursday, accusing City Hall of trying to exceed its authority. ?Moscow authorities have no right to initiate bankruptcy procedures against UES,? he said. ?[And] the question of replacing the management of UES units is an internal corporate matter and must be solved according to legislation,? Interfax quoted him as saying.

When asked about the government?s position concerning the battle for Mosenergo, Yusufov said that UES is a state company and that ?principal decisions regarding UES are made in accordance with directives from the government.?

Despite the full weight of the government and the national power grid bearing down on him, however, Remezov won?t go quietly.

With less than 24 hours before the vote, he took to the air waves to defend himself, reiterating his contention ? backed by court rulings ? that Friday?s meeting is illegal, and hinted that he may try to physically block UES representatives from convening at Mosenergo?s headquarters.

?If UES would tell me ?you?ve done a good job, but we have different plans,? I would obey its decision [to sack me],? Remezov told Ekho Moskvy. ?But when accusations of mismanagement have been distributed I will defend myself,? he said.

Remezov took charge of Mosenergo in May 2000, a year the company posted revenues of just 13,901 billion rubles ($489 million). Through the first half of this year, however, revenues have already reached 21,968 billion rubles or 56.2 percent more then all of 2000.

?The problem is not in being replaced ? UES wants to discredit me as a manager,? Remezov said.

When asked if representatives of UES would be let into Mosenergo?s building on Friday, he said, ?Yes, but it depends on who,? Interfax reported. He did not elaborate.

?The conflict is that UES has slandered me and because of that it wants to sack me,? he said. ?I am ready to obey the order of the shareholders meeting, but only a legitimate one.?

The two-month long battle has seen a flurry of legal activity, with numerous lawsuits and countersuits from various courts around the country.

UES said Thursday that a court in the Siberian city of Kemerovo had upheld a shareholder?s complaint that Remezov wasn?t carrying out the directive of Mosenergo?s board and declared Friday?s meeting valid.

On Wednesday, Remezov said UES was plotting to remove him by force with the help of court bailiffs so as to avoid being blocked from entering Mosenergo headquarters for the meeting.

He also said law enforcement authorities, including the Federal Security Service and the Prosecutor General?s Office, had been notified about the plan and the police patrols had been stationed around the building, an appearance he said was tied to a decision by anti-terrorist police.

?Strange cars have been seen near the company?s premises, and photographs have been taken,? Remezov said.

There were two security guards armed with AK-47s stationed in front of Mosenergo?s building in central Moscow, but as of late Thursday no bailiffs had come.

?We are waiting for the bailiffs to come any minute with a court order,? said company spokeswoman Vera Vinogradova.

But Remezov has his own court orders ? he told Ekho Moskvy three of them ? banning the meeting. ?One court?s decision does not revoke the decision of another court,? Interfax quoted him as saying Thursday evening.

One of the court victories mentioned by Remezov came as a result of a suit brought by Luzhkov?s deputy, Boris Nikolsky, who also represents the city on Mosenergo?s board.

A local court ruled the meeting illegal on Tuesday, but the Moscow arbitration court reversed that decision Thursday.

Another Luzhkov deputy, Valery Shantsev, added his two cents Thursday. He called the way UES was ignoring the opinion of the city ?abnormal.?

?It is an abnormal situation when the opinion of a subject of the Russian Federation is not taken in account when replacing the of a regional energy system,? said Shantsev.

Moscow ?would like to participate in the appointment of the head of Mosenergo,? he added.

Mosenergo is Russia?s largest power company, producing 8 percent of the nation?s electricity and 6 percent of its heating.

It is has a monopoly in Moscow and the surrounding region and controls more than 20,000 kilometers of high- and low-voltage grids that service 16 million people.