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Russia: Shareholders Elect Chubais To Board Of Energy Giant

  • Stephanie Baker



Moscow, 6 April 1998 (RFE/RL) -- Russia's former First Deputy Prime Minister Anatoly Chubais was elected to the board of Russia's national electricity company Unified Energy Systems over the weekend, which could boost his chances of becoming the energy giant's chief executive.

Chubais was elected to a new board of directors at an extraordinary shareholders meeting on Saturday in the Russian city of Konakovo, northwest of Moscow.

The meeting did not resolve the key question of who would take over as chief executive at UES, a more hands-on job than the post of board chairman. Chubais is considered a top contender for the CEO position, but analysts say the post is likely to be used as a bargaining chip in the formation of a new Russian government.

Boris Brevnov, the 29-year old banker and ally of acting First Deputy Prime Minister Boris Nemtsov, stepped down as CEO on Friday after months of high-profile clashes with Soviet-era directors in the company which were seen as part of the jostling for power in Russia's cabinet. Shareholders, however, elected Brevnov to the board of directors on Saturday.

The government, which owns a controlling stake in UES, is not expected to choose a chief executive for the company until after the State Duma approves a new prime minister. Yeltsin has nominated former Fuel and Energy Minister Sergei Kiriyenko as prime minister, but deputies are not scheduled to vote on his candidacy until Friday.

Shareholders Saturday elected a Kiriyenko ally, Deputy Fuel and Energy Minister Viktor Kudryavy, to become chairman of the board.

Kudryavy replaced Anatoly Dyakov, the Soviet-era boss of UES who led a failed attempt to oust Brevnov as chief executive in January after charging him with corruption.

Kudryavy, a career electricity specialist, worked briefly as Dyakov's deputy at UES before moving to the Ministry of Fuel and Energy, where he crossed paths with Kiriyenko. Analysts say he has advocated a slower approach to reform at the energy giant, but he is not considered a Dyakov ally.

Derek Weaving, an analyst at Deutsche Morgan Grenfell, said Kudryavy is probably not the chairman of choice for foreign investors.

But Kudryavy is considered a compromise candidate who might be able to appease different factions within the company and balance a more reform-minded candidate such as Chubais as chief executive.

Chubais was sacked last month after President Boris Yeltsin decided to reshuffle his cabinet, but he had been considered the government's candidate to take over as chairman of the company's board before the political shake-up. Kiriyenko had ruled out Chubais becoming chairman, saying the post needed to be filled by a government representative.

Western investors, who own about a quarter of UES shares, had helped elect Chubais and Brevnov to the board at Saturday's shareholders meeting. Also elected to the 15-member board were Pyotr Rodionov, deputy head of the gas monopoly Gazprom and Yevgeny Yasin, minister without portfolio.

With a new board, the government has stepped up its control over UES, Russia's largest company by sales. But Brevnov's decision to resign from the post of chief executive is likely to intensify a political battle over who will be put at the helm of UES, Russia's largest company by sales.

Brevnov was severely weakened by the corruption charges, which came right after his mentor Nemtsov lost responsibility for reforms in Russia's debt-ridden energy sector.

Many analysts believe Chubais is likely to be appointed as chief executive, which would be considered an important sign of where the government is heading.

But parliamentary opposition to Chubais retaining any government-appointed role remains strong.

Hartmut Jacob, an analyst at investment bank CAIB, said the government would hold off on appointing Chubais until Kiriyenko is approved by the Duma. He said putting Chubais in charge at UES would only complicate Kiriyenko's confirmation hearings.

The Russian press has speculated that Chubais is after the top job at UES to tap the company's vast resources for the upcoming presidential election. Nezavisimaya Gazeta, which is controlled by financial tycoon Boris Berezovsky, charged last week that Chubais is unqualified for the job, saying his experience in the electricity sector is limited to "knowing how to change a light bulb."
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