Moscow press review for July 31, 2012
MOSCOW. July 31 (Interfax) - The following is a digest of Moscow newspapers published on July 31. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The "tandem" power structure of President Vladimir Putin and Prime Minister Dmitry Medvedev has swelled the ranks of the Russian bureaucracy. After switching places following the presidential elections, both Putin and Medvedev required more staff. Funding for federal salaries could increase by 140 billion rubles over three years, and pay might be linked to performance (Vedomosti, p. 1).
For the first time since the revival of Russia's road funds, the government will increase spending on roads in order to keep President Vladimir Putin's election promises. The Finance Ministry is prepared to increase funding for roads by 26.7 billion rubles in 2014 and 63.2 billion rubles in 2015, and is proposing to increase gasoline excises in order to raise the money (Vedomosti, p. 3; Kommersant, p. 2).
Former Tatar government official Alexander Timofeyev, who was fined 300 million rubles in January for demanding a bribe of 5 million rubles, managed to transfer his assets to relatives and has paid the government just 0.61 million rubles. A court on Monday sentenced him to four years in prison, but Timofeyev is still walking free as he has ten days to appeal (Vedomosti, p. 1).
OIL & GAS
Former United Shipbuilding Corporation (USC) president Roman Trotsenko has become an adviser to Rosneft head Igor Sechin, who chaired USC's board for several years while he was deputy prime minister. The state oil major might need Trotsenko's experience for offshore projects, which will require a large amount of specialized marine equipment, analysts said (Kommersant, p. 7).
Russian oil company TNK-BP will continue to not pay what were once very generous dividends to its shareholders, who are locked in a bitter dispute. BP raised the issue of dividends, but Russia's AAR consortium has officially rejected it, arguing that the situation on the market and at the company is too unstable and the money should be left with TNK-BP (Kommersant, p. 9).
BANKING, FINANCE & INSURANCE
The sale of retail loans to collection agencies could cause problems for Russian banks even if such a provision is included in the loan agreement. If a borrower can show in court that such agreement was given under pressure from the bank or unknowingly, the whole loan contract should be considered invalid, the Federal Consumer Rights Protection Service believes. It has already issued such recommendations to its regional branches (Kommersant, p. 1).
A small Moscow financial company is offering what it calls deposits at 17.5% annual interest in rubles. On closer scrutiny it turns out that this is not a deposit at all, but a trust management contract. However, the company is not breaking any laws (Vedomosti, p. 7).
Interview: Willem Buiter, Chief Economist at Citigroup (Vedomosti, p. 5).
RETAIL & CONSUMER MARKET
The Russian subsidiary of France's Auchan has shown that retail chains can be even more generous to shareholders than resource companies. The company paid out more than 80% of net profit in dividends, even more than oil companies (Vedomosti, p. 7).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Altimo, the telecom arm of Russia's Alfa Group, could follow Telenor's example and start buying up shares in Vimpelcom Ltd. Ukraine's Antimonopoly Committee has given the green light for the company to increase its stake in the mobile services provider to more than 25%. This allows Altimo to recover a 5.995% stake sold in June 2011 and maintain a third of seats on Vimpelcom's board (Vedomosti, p. 7).
Deputy Communications Minister Naum Marder, who was previously in charge of the cellular services market, is in talks to take a position at Vimpelcom, one of Russia's top three cellular operators (Kommersant, p. 1).
AUTOMOTIVE & ENGINEERING
The Industry and Trade Ministry is proposing only a symbolic recycling levy on automobiles imported by private individuals. The levy is needed to offset the reduction of import duties on vehicles following Russia's accession to the World Trade Organization, however, Russia did not promise to lower import duties for private individuals (Vedomosti, p. 1).