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. Last Updated: 07/27/2016

Fyodorov: State Influence Must Match Stake

In a turnabout from his earlier stance, Gazprom board member Boris Fyodorov is asking the state to give up one of its seats to achieve a more accurate reflection of ownership on the gas monopoly's board.

Fyodorov said the government should cut the number of seats it holds on the board from six to five, the Financial Times reported Tuesday. Although the state owns only 38 percent of Gazprom shares, it has a majority on the 11-seat board.

"I am apprehensive about the government's influence," Fyodorov said. "Shareholders' rights should now be put in a different perspective. Now that we don't have to fight management, it would be very good for the government to make a show of confidence and reduce its seats to five."

When the Russian government gained a majority on the board after a shareholders meeting last June, Fyodorov and other minority shareholders heralded the vote as the beginning of a new era for the notoriously opaque gas giant.

While making strides in increasing Gazprom's market capitalization, CEO Alexei Miller -- installed by President Vladimir Putin in May -- is still in the process of bringing back lost assets into the company's fold. Since Gazprom's privatization in the early 1990s, assets worth billions of dollars were siphoned off the balance sheet for nominal sums.

In its latest attempt, Gazprom is trying to force the bankruptcy of petrochemical holding Sibur and the return of $2.9 billion in debts from its scandal-ridden subsidiary. Sibur's management has threatened to dilute Gazprom's 51 percent stake through an additional share emission.

In addition to his Gazprom position, Fyodorov also sits on the board of Sberbank -- a government-controlled monopoly in retail banking -- which other minority investors say causes a conflict of interest.

William Browder, managing director of Hermitage Capital Management, said that Fyodorov agreed to a diluting Sberbank share emission last year, and in exchange, Sberbank became a registered dealer for the UFG-managed Pyotr Stolypin mutual fund. Fyodorov is honorary chairman of the United Financial Group brokerage.