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DADDY WARBUCKS
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Discussion Starter · #1 ·
This is pretty big stuff and not getting much attention. It should be on the front page....


Putin adviser slams Yukos takeover as "swindle of the year"

Tue Dec 28,11:53 AM ET Top Stories - AFP



MOSCOW (AFP) - A top economic adviser to Russian President Vladimir Putin (news - web sites) slammed the government's takeover of the main asset of the Yukos oil giant as the "swindle of the year" and warned of growing state interventionism.


AFP Photo



In an unprecendented criticism of the destruction of Russia's top oil company by someone within the government, Andrei Illarionov accused the Putin administration of using "the money of Russian citizens" to strip Yukos of its core asset.


"This year in the category of swindle of the year, the winner is the sale of Yuganskneftegaz to a mystery company (...) and then the acquisition of this firm by Rosneft," the state-run oil producer, the ultra-free market Kremlin economic adviser told reporters.


Illarionov said that "the enigma of the year" was to know "where the money came from" for the takeover of Yukos' main production arm, which was sold in a secretive December 19 auction for 9.35 billion dollars (seven billion euros).


But he immediately answered by saying that the almost 10 billion dollars could "only have come from the state budget because no other company had the sufficient funds".


Illarionov charged: "The money was taken from the citizens of this country."


Gazprom, the state-controlled gas monopoly, had been seen as the likely winner of the forced auction, but it withdrew from the bidding because of a US legal injuction barring it from participating.


In the end, Yuganskneftegaz, a company that pumps a million barrels a day and owns 17 percent of Russia's vast oil reserves, was sold to the previously unknown Baikalfinansgroup.


Rosneft, which is to merge with Gazprom shortly into a new state-run energy corporation, subsequently announced that it had bought Baikalfinansgroup.


Analysts said that the sale, officially to pay off 27.5-billion-dollar tax claims levied against Russia's biggest oil producer, was a means for the Kremlin to reassert control of the strategic energy sector and crush a powerful political opponent, Yukos' imprisoned founder Mikhail Khodorkovsky.


The attack on Yukos and Khodorkovsky is believed to have been orchestrated by Igor Sechin, a senior Kremlin official who is part of an influential group of ex-KGB hardliners who surround Putin, himself a former spymaster.


Illarionov lamented the "destruction of the most efficient oil company in Russia" and described it as "expropriation".


The economist did not rule out that other Russian companies might suffer the same fate as Yukos.


He said Russia had abandoned the path of economic liberalism and "has moved to an interventionist model".


Comparing the effective nationalisation of Yukos to that of the Venezuelan oil sector in 1976, Illarionov predicted a slowdown in Russia's current fast growth "because of the intervention of incompetent bureaucrats in the economy."


He said the aim fixed by Putin to double Russia's GDP (news - web sites) in 10 years "is not possible in a populist and interventionist political context."


Reformist members of the Russian government have been privately aghast at the campaign of destruction against Yukos, which they have been powerless to stop.





And now other firms have come under fire as analysts warn that government officials appear to have a green light to abuse their authority and go after the private sector.

One of them is Russia's largest cell phone operators, VimpelCom, which faces 157 million dollars of tax claims that are seen as the result of a commercial dispute between the company's owners and a government minister.
 

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Yep, this is some pretty scary stuff. After our buddy Putin is done deconstructing any and all of the reforms that took place after the collapse of the Soviet Union, do you think he's going to opt for the title "Czar" or "Dictator of the Proletariat"?
 

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DADDY WARBUCKS
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19,433 Posts
Discussion Starter · #3 ·
Tax and fine a private enterprise to such a major extent that the government takes it over to auction it to collect fines and taxes.

I worry about that happening here, too. We already have property confiscasion laws that are increasingly being used. I can see this being done to industries or activities in disfavor here. The taxing power is almost unlimited in scope and reach and I think more US officials are warming up to it as the best regulatory technique.

As far as Russia, this is one way to convert private property to state controlled property with officials lining their pockets in sham auctions and sham ownership.

Interestingly enough, this is being fought in a US Bankruptcy Court in Texas. I have no idea how this could come out but it could get quite ugly. It can go beyond business quite quickly and become major world power politics.
 
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