The Russian gas trader Itera has tried to appease critics by listing the names of some shareholders. But analysts continued to suspect links to giant Gazprom, adding to outcries about the gas monopoly's media moves. Our correspondent Michael Lelyveld reports.
Boston, 24 April 2001 (RFE/RL) -- Russian authorities suffered from two credibility problems at the same time last week because of deals involving the powerful gas monopoly Gazprom.
While the public was tuned in to Gazprom's takeover of NTV and other media outlets of financier Vladimir Gusinsky, business focused on new disclosures by Gazprom's trading partner, Itera.
After years of doubts about Itera's astonishing growth, the company issued the first details about its ownership last week. Analysts have raised suspicions that giant Gazprom has secretly shifted its assets to Itera to benefit insiders and hide profits from the public and the government.
For the first time, Itera tried to silence its critics by publishing the names of some of its shareholders, while continuing to insist that Gazprom managers have no stake in the company.
Itera listed six individuals as owners of 13 percent of its stock. The other 87 percent is said to be held by trusts and employees, including 26 percent for Itera Group chairman Igor Makarov.
Makarov and other Itera executives have previously resisted calls to name its shareholders on privacy grounds. But the question of Gazprom's finances have become a major test for Russian reforms.
Gazprom, which is 38-percent-owned by the Russian government, is also its biggest taxpayer. But while Gazprom's production has been dropping, Itera's sales and output have been steadily growing, thanks to privileges and properties acquired from Gazprom. Itera bought one gas field from Gazprom for as little as $300, according to the "Moscow Times."
The company, founded in 1992, now has some 120 subsidiaries in 24 countries. Itera has largely taken over Gazprom's exports to nations of the CIS.
Despite its disclosure, Itera failed to satisfy financial analysts last week.
The Reuters news agency quoted Konstantin Reznikov of Russia's Alfa Bank, saying, "They have a long way to go as far as transparency is concerned." Reznikov said, "You can benefit (from deals) even if you are not a shareholder."
Experts have long noted that Russia's patchwork of laws leaves many ways to reap a profit without appearing on shareholder registers. The skepticism last week was similar to that encountered last October by Itera Holding president Valery Otchertsov at a conference in the United States, when an analyst in the audience yelled out, "No one believes you."
The "Moscow Times" reported last week that the ownership details were only for the holding company and not for any of Itera's subsidiaries.
The responses to Itera's statement were also remarkably similar to those that greeted Gazprom's media moves against Gusinsky last week.
Gazprom and the government stuck to their arguments that the NTV takeover was strictly a business issue. But the U.S. State Department said it was concerned by "the lack of open and transparent process" and the effect on freedom of the press. Spokesman Richard Boucher said Gazprom's action "certainly has a political motivation."
In both cases, the problem for the Russian authorities is that they have still gained little credit since the Soviet breakup for respecting human rights and enforcing the rule of law. The effects are being seen in both the political and business spheres. It is probably no coincidence that both controversies involve Gazprom, the richest and most powerful of Russia's "natural monopolies."
Clearly, Russian companies and officials feel the pressure to respond to critics of their practices. But they still seem out of touch with the standards that must be met to establish credibility.