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. Last Updated: 07/27/2016

Kasyanov to Investors: All Going Well at UES

Prime Minister Mikhail Kasyanov waded into the growing public debate on Anatoly Chubais' handling of the national power grid on Monday, telling foreign investors they have nothing to worry about.

"I don't see any evidence of shareholder rights violations against minorities [by the management of Unified Energy Systems]. ... Shareholder rights will be defended," Kasyanov told the Brunswick UBS Warburg investment conference.

Chubais has come under increasing pressure as fears mount of massive asset stripping at UES, driving the company's stock to a 52-week low.

Last week, influential presidential advisor Andrei Illarionov, in a three-day barrage of criticism from Austria to Irkutsk, called on Chubais to quit, saying he has turned UES into a "national disgrace."

But Kasyanov tried to assuage these fears Monday: The restructuring of UES will commence "only after a consensus is reached among the government, the State Duma and regional leaders," he said. "This is such a sensitive area that the slightest mistake can cause a political outburst of emotions," he added.

Later, at the same conference, Illarionov picked up where he left off, this time, however, attacking not just Chubais, but seemingly Kasyanov as well.

More and more assets are leaving UES, Illarionov said. "Moreover, management now intends to get support for this policy from the country's executive power," he added.

When asked if he still believed Chubais should resign, however, Illarionov balked.

Brunswick Capital Management head David Herne, who represents minority shareholders on the UES board, said Monday that he had sent a letter to Chubais urging him to reassure shareholders by halting the sale of assets "pertaining to the core activities by UES or its subsidiaries until after the restructuring process is completed in 2004."

Herne said by telephone Monday that the point of the letter was to be constructive. " I think that Chubais is ready now and does want to listen to what shareholders are saying," he said.

UES spokesman Andrei Yegorov said the company's management is studying the letter -- and the wishes of other minority shareholders -- very carefully. "We understand that shareholders are worried, especially by the situation on the stock market. We are also worried," Yegorov said.

Internet news site quoted Chubais as telling reporters in Bashkortostan on Monday that he has no intention of resigning.

"I would remind [my critics] that three years ago UES had losses of 17 billion rubles [$537 million]," Chubais said.

"And last year, according to the official report, confirmed by an international auditor, for the first time the energy sector of Russia had a net income of 42 billion rubles -- an absolutely fantastic result," he said.

"Therefore, if someone tends to be politically hysterical, it's [due to] his family problems. I am going to do business and I do not intend to leave."

Staff Writer Valeria Korchagina contributed to this report.