Moscow press review for February 25, 2014
MOSCOW. Feb 25 (Interfax) - The following is a digest of Moscow newspapers published on February 25. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Ukraine is on the verge of an economic crisis. There is no money in the treasury even for current payments, and acting Deputy Prime Minister Alexander Vilkul has ordered the infrastructure and regional ministries, and the national railway and roads companies to stop all payments except wages. The country's Finance Ministry will ask the European Union, United States and IMF for $35 billion in aid (Vedomosti, p. 1).
The new authorities in Ukraine are trying to restore the system of government that fell apart after President Viktor Yanukovych fled. Yulia Tymoshenko's Batkivshchyna party has assumed the role of main center of power, with its representatives taking key posts. But the party has to constantly look over its shoulder at the radical opposition, so the new authorities have declared rapid European integration their main goal and issued an arrest warrant for Yanukovych (Kommersant, p. 1).
Given the Kremlin's campaign against offshore tax havens, the Finance Ministry is again considering giving tax authorities access to audit secrets. A new version of a bill would require auditors to share with the tax authorities information about clients obtained in the course of providing audit and support services. This would make it easier to untangle tax optimization schemes but also undermine trust between auditors and clients (Kommersant, p. 1).
The leader of the LDPR, Vladimir Zhirinovsky proposed Monday to amend the Russian constitution to allow the president to appoint an additional 16 members of the Federation Council who would serve life terms. Kremlin officials see the proposal as a "reasonable idea" but experts say it would undermine the principles of federalism and separation of powers (Kommersant, p. 1; Vedomosti, p. 1).
The eight protestors being tried for rioting and assaulting police in the May 2012 Bolotny Square rallies were found guilty Monday and seven of them were sentenced to prison terms of six months to two years. However, having already spent over a year under arrest, they will be eligible for parole by summer and the sentences are seen as mild (Vedomosti, p. 2; Kommersant, p. 3).
Big business in Russia has again managed to block the expansion of minority shareholder rights. Criteria for affiliation of shareholders, companies and their managers, a fundamental issue for corporate disputes, will not be expanded dramatically (Vedomosti, p. 4).
Interview: Masahiro Sakane, Chairman of the Public-Private Coordination Meeting for Promoting Japan-Russia Relationship, former CEO of Komatsu (Vedomosti, p. 8).
OIL & GAS
Russneft and its founder Mikhail Gutseriev's new oil company Neftisa might carry out a reverse merger. While the companies operated separately in 2013, Russneft paid off the debt that was constraining its development and Gutseriev managed to consolidate the company, buying out shares from Sistema and Sberbank (Kommersant, p. 9).
METALS & MINING
Belaruskali, which has been feuding with Russian potash giant Uralkali since last summer, has managed to hit its rival on its home turf. The Belarusian company has secured a contract to supply potash to the biggest Russian consumer, PhosAgro, by offering a lower price. Belaruskali could poach other Uralkali customers, as it has sent offers to all major potash buyers in Russia (Kommersant, p. 9).
BANKING, FINANCE & INSURANCE
Igor Makarov will put part of the $3 billion-$4 billion earned from the sale of gas company Itera to state major Rosneft into Pangeo Capital, a private equity fund founded by VEB Capital head Yury Kudimov. The latter is leaving the state company to manage the $1 billion fund for investment in undervalued Russian assets in the telecoms, finance and real estate sectors (Kommersant, p. 7).
RETAIL & CONSUMER MARKET
State Duma Deputy Speaker Sergei Zheleznyak has submitted amendments to Russia's anti-piracy law that would extend it to all types of content, including music, books and software, not just films and TV shows. The bill would allow holders of rights to all types of content to petition to block websites where their content is posted illegally (Vedomosti, p. 10).
The Russian division of Germany's Metro Cash & Carry has reported financial results for the first time, showing sales up 11.3% to 182.244 billion rubles in 2013. The German company's EBITDA margin was 12.4%, a record for the Russian market that surpassed even top Russian retailer Magnit (Vedomosti, p. 11).
REAL ESTATE & CONSTRUCTION
Real estate developer Vadim Moshkovich is proposing a partnership to Moscow in which the city would build subway lines to his projects, and he would compensate part of the cost, up to 40 billion rubles, from profits. Moshkovich's company Masshtab has 2,586 hectares of land in new Moscow that it wants to develop (Vedomosti, p. 10).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
A Moscow court on Monday ruled to strip LTE operator Osnova Telecom of its 2.3-2.4 GHz frequencies after finding that the State Radio Frequencies Commission decision to allocate the resource to the company was illegal. The ruling could frustrate Prime Minister Dmitry Medvedev's recent orders to the defense and communications ministries to ensure Osnova's 4G network starts operating by mid-April (Kommersant, p. 7; Vedomosti, p. 11).
TRANSPORTATION
Russian Railways plans to ask the government for another 16 billion rubles for the program to develop the Baikal-Amur Mainline and Trans-Siberian Railway. The extra money is needed to expand railway capacity to accommodate export shipments of an additional 39.3 million tonnes of coal from the Kuznetsk Basin by 2020 (Vedomosti, p. 12).
