SOURCE: The St. Petersburg Times
DATE: Issue #1461 (23), Tuesday, March 31, 2009
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TITLE: Kadyrov Foe Gunned Down In Dubai
AUTHOR: By Nabi Abdullaev
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Sulaiman Yamadayev, a former Moscow-backed strongman and member of a clan that challenged Chechen President Ramzan Kadyrov’s authority, was gunned down in Dubai on Saturday in an apparent assassination, Dubai police said, local media reported. 
Dubai police chief Dalfan Tamim said in a statement Sunday that a Chechen victim, identified as Sulaiman Madov, 36, was shot dead in the parking lot of the apartment building where he was living. 
Citing unidentified sources, the English-language Abu Dhabi newspaper The National reported on its web site Monday that the victim’s identity had been confirmed as Sulaiman Yamadayev, a Chechen who had been in Dubai for four months.
Police sources said Yamadayev was shot as he walked to his car parked at the luxury Jumeirah Beach Residence in Dubai Marina, The National reported. 
A spokeswoman at the Russian Embassy in Abu Dhabi said Monday morning that the embassy had “no official information” on Yamadayev’s attack. 
“And what we do have is being verified,” she said. The spokeswoman referred inquiries to the Russian consulate in Dubai. 
Repeated calls to the consulate went unanswered Monday. 
Dubai authorities attempted to detain a Russian citizen in connection with the attack, but the suspect was able to flee, Kommersant reported Monday. 
The chief ruler of Dubai, Sheikh Mohammed bin Rashid al Maktoum, is to arrive in Moscow on Monday on invitation from Prime Minister Vladimir Putin and will meet with President Dmitry Medvedev, the Kremlin press service said. 
Yamadayev and his brothers Ruslan and Badrudi headed a powerful clan that had a falling out with Kadyrov after enjoying warm relations with Kadyrov’s father, former Chechen President Akhmad Kadyrov, who was assassinated in Grozny in 2004. 
Ruslan Yamadayev, a former State Duma deputy from Chechnya and member of its United Russia faction, was gunned down in central Moscow in September. It is unclear whether any suspects have been detained in connection with his slaying. 
Suliman Yamadayev is the fifth Chechen exile killed abroad over the past six months in apparent assassinations. Three former rebels were killed in Turkey, while another was shot dead on the streets of Vienna, Austria, where he had received political asylum. 
Like the Kadyrovs, Yamadayev and his brothers initially supported Chechnya’s independence from Russia in the 1990s. They fought against federal troops during the first Chechen war but switched sides during the second military campaign and supported Kremlin efforts to end Chechnya’s de facto independence. 
With Akhmad Kadyrov, the Yamadayevs arranged for their stronghold — the Chechen city of Gudermes — to be taken over by federal troops without a fight. In return, a grateful Kremlin allowed the Yamadayevs to use their commandos to form the elite Vostok battalion under the auspices of the Defense Ministry. 
Both Suliman and Ruslan Yamadayev were awarded Hero of Russia medals for fighting with federal forces against Chechen rebels. 
Suliman was made commander of Vostok, while Ruslan was elected to the State Duma on the pro-Kremlin United Russia ticket in 2003. He was not re-elected in December 2007 in what insiders said was a sign that Chechen authorities no longer wanted him in such a high-profile post. 
The Yamadayevs were believed to be the only political and military force in Chechnya capable of acting independently of Kadyrov, who became president in February 2007. 
A standoff between the two clans culminated in April 2008 when a Vostok convoy failed to yield to Kadyrov’s motorcade. A furious Kadyrov subsequently ordered a crackdown on the Yamadayevs. 
Chechen prosecutors opened an investigation into Suliman Yamadayev on murder charges, and he was subsequently put on a wanted list. Kadyrov’s press service distributed a flurry of statements accusing the brothers of organizing extrajudicial killings, torture, extortions and kidnapping. Among the allegations, the brothers were accused of raiding a St. Petersburg company owned by a Chechen businessman and then kidnapping his relatives. 
Suliman Yamadayev had lain low ever since the conflict with Kadyrov and was believed to have been living in Moscow for several months. 
His killing would hardly mark a change in the Chechen political landscape dominated by Kadyrov, who stood to gain little from this death, said Nikolai Silayev, a Caucasus analyst with the Moscow State Institute of International Relations.  
“But this murder could be a demonstrative revenge by any of Yamadayev’s enemies, and he had plenty of them,” Silayev said. 
Kadyrov’s efforts to undercut the clan, however, did not stop Suliman Yamadayev from commanding the Vostok battalion during Russia’s military operation to push Georgian troops out of South Ossetia in early August. He even granted interviews to the Russian media in South Ossetia. 
Shortly after the Georgian war, he was fired from the Vostok battalion, but his arrest warrant was also canceled by Chechen prosecutors.

TITLE: Police Arrest Anti-Xenophobia Activists
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: The 15-day Xenophobii.NET (No to Xenophobia) Campaign ended in arrests, when viewers leaving a film screening at Rodina film theater in the center of St. Petersburg were dispersed by the police on Sunday. But while the Russian media, from RTR television to Fontanka.ru news portal, reported a mass fight between Antifa activists and neo-Nazis, both the police and detained film-goers deny any fight took place.
“There was no fight, it was prevented,” police spokesman Vyacheslav Stepchenko said by phone on Monday. 
“It seems to be a provocation; the Antifa activists and neo-Nazis never came into contact,” an anti-Nazi activist who only gave his first name, Denis, said by phone on Monday.
“We tried to walk to the metro in an organized way so as not to be attacked by neo-Nazis, when on Karavannaya Ulitsa we were jumped from behind by policemen with batons. They started to throw us to the ground and drag us into their vehicles.”
While the French documentary “Antifa — Chasseurs de skins” (Antifa: Skin Hunters), the final screening of the “Open Your Eyes! International Film Event Against Racism and Xenophobia” and the last event of the anti-xenophobia campaign, was being shown, a group of neo-Nazis reportedly attempted to attack the packed film theater, which drew more than 500 viewers.
The attempt failed when the police arrived and detained several attackers, according to Yevgeny Konovalov, chairman of the Russian Social-Democratic Union of Youth and one of the campaign’s organizers.
“Around 30 beefy young men looking like boneheads (Nazi skinheads) attempted to storm Rodina film theater with sticks and stones, but they were scared off by the policemen,” Konovalov said by phone on Monday.
“Having seen the police, [the attackers] retreated immediately to Nevsky Prospekt, but the police had time to detain three men. When I came out to see what was happening, I saw two handcuffed men being put into a police vehicle.”
According to Konovalov, Antifa scouts later reported that a large group of neo-Nazis had gathered on Nevsky. 
“In my view, it’s very strange,” he said.
“On the one hand, thanks to the police for preventing a nationalist attack, but on the other hand, it’s not clear how they allowed them to come in a large group to the film theater, and then to gather in a large group, 40 or 50 men, on Nevsky Prospekt waiting to attack the people returning from the film theater.”
A group of film-goers, mostly anarchists and Antifa activists, formed a 80-to-100 people formation to walk to the nearest metro along Karavannaya Ulitsa to Nevsky, when the police attacked the group, detained around 20 and drove them to police precinct 79, while the rest ran away. 
On Friday, a march held by anarchists in St. Petersburg in support of the workers who took control of their plant in Kherson, Ukraine on Feb. 2, was brutally dispersed by the police who detained dozens of participants. Some of the detained complained of being beaten, while two policemen at precinct 79 where the detained demonstrators were taken allegedly made Nazi salutes and shouted “Slava Rossii!” (Glory to Russia!), the slogan used by neo-Nazis.
The police said 19 participants were detained and charged with violating the rules for holding a public event. No comment on the beatings was given.
But Konovalov denied early reports on Antifa web sites that said that the neo-Nazis and the police had acted in concert on Sunday. 
“That’s not quite true, at least the police didn’t touch Antifa activists as they arrived or during the show,” he said.
“The thing is that there are several branches of the police,” he said. “There is the usual police, which is a patrol service that doesn’t get to the heart of anything; what they really do is protect public order; and then there is the former 18th Department of RUBOP (anti-organized crime police agency), which has been turned into the Anti-Extremism Department — it is often involved in unlawful activities and attacks on Antifa activists.
“I think they were instrumental in the detainments, because we saw some RUBOP men in police precinct 79, and among them one was recognized as the same policeman who made a Nazi salute and shouted ‘Glory to Russia’ on Friday.”
Konovalov said that he and other activists had visited the precinct and stayed there for some time to prevent possible beatings of Antifa activists by the police officers. 
“I think we influenced the situation, because when we arrived, 20 Antifa representatives had already spent an hour standing with their faces to the wall and hands behind their heads, and we demanded that [the policemen] either start compiling reports or do something else, because people should not be treated like this.”
Most of those detained were released after 1 a.m., when the metro was no longer open, while three spent the night at the precinct. The police said 18 were detained and charged with “disorderly conduct.”
Nevertheless, Konovalov described the campaign against xenophobia as a “success.” 
“Everything that happened [during the campaign] has only made our ranks closer, while society was been shown that boneheads are not an invention, these people do exist, they do have gangs and they are ready to go to absolute extremes.”

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A two-person demonstration in defense of the Russian Constitution near Gostiny Dvor on Nevsky Prospekt only lasted for seven minutes before both the participants were detained and their posters with quotes from the Constitution and the Law on the Police were taken away and torn up by police officers on Sunday.
Local activists from Garry Kasparov’s United Civil Front (OGF) and the Yabloko Democratic Party attempted to hold a rally after it was not authorized by City Hall, despite an application having been submitted properly. 
When the policemen, of whom there were many present on the site, approached, OGF activist Denis Vasilyev explained that the demonstrators were acting in accordance with the Russian law and Constitution, and said that they considered the authorities’ refusal to authorize the rally “illegitimate.” Both were detained, however, and after spending three hours at a police station, they were charged with violating the rules for holding public events.
Five minutes after the detentions, five activists held another demo on Malaya Sadovaya Ulitsa, close to Gostiny Dvor, where they held posters urging Prime Minister Vladimir Putin to pray for forgiveness, accusing Russia’s main television channels of Joseph Goebbels-style propaganda, and demanding freedom for imprisoned businessman and Putin’s political opponent Mikhail Khodorkovsky. The police were not present at the second demo.

TITLE: Nemtsov Registered to Run for Sochi Mayor in Election
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Opposition politician Boris Nemtsov was registered to run for mayor of Sochi on Saturday, his campaign said, a day after a mysterious campaign contribution from a New York car dealer threatened to derail his bid. 
“Boris Nemtsov has been registered as a candidate for the post of Sochi mayor,” his spokeswoman Olga Shorina said in an e-mailed statement. 
The acceptance of Nemtsov’s application came as the race in the Black Sea resort, which will host the 2014 Winter Olympics, grew increasingly bizarre, with a list of nearly two dozen candidates including billionaire Alexander Lebedev, ballerina Anastasia Volochkova and Russia’s top Freemason, Andrei Bodganov. 
In the latest controversy, the Sochi election committee announced Friday that Nemtsov’s campaign had received a potentially illegal $5,000 contribution from a business registered near the Brighton Beach neighborhood in Brooklyn, New York. 
Nemtsov’s campaign called the donation a “Kremlin provocation” to keep Nemtsov off the ballot under an election rule forbidding candidates from accepting contributions from abroad. 
Nemtsov sent the money back to the United States on Friday afternoon, his spokeswoman said. 
A scanned copy of the invoice obtained by The St. Petersburg Times showed that the money was transferred to Nemtsov’s account with Sberbank on Wednesday from a Brooklyn-registered company called GBR Business Consulting. 
According to New York state public records, the company is registered to an apartment near Brighton Beach, which is home to a large Russian-speaking community. 
The Internet telephone directory www.whitepages.com lists the apartment under the name Boris Glickstein, the same name given as a contact for a nearby Brighton Beach car dealership called Kings Jaguar. 
Reached by telephone Friday at Kings Jaguar, Glickstein confirmed that he had wired money to Nemtsov’s bank account after he was “asked to make a contribution” by Nemtsov’s campaign. 
“Yes, I transferred the money,” said Glickstein, speaking in Russian. “Don’t discuss it with me, discuss it with them.” 
Asked what he meant by “them,” Glickstein said he meant Nemtsov’s campaign team. “I was asked to make a contribution,” he said, adding that he did not remember when or by whom. 
When told that candidates are not allowed to use campaign contributions from abroad, Glickstein said, “Well, let them return it then.” 
“I do not have time to talk,” Glickstein said tersely before hanging up. 
Nemtsov, a Sochi native, said in a telephone interview that he had never heard of Boris Glickstein. 
“I don’t know this person. It is a provocation,” Nemtsov said. 
The wire transfer came from an account with the bank JPMorgan Chase, according to the scanned copy of the invoice. Nemtsov said his campaign would ask JPMorgan Chase to investigate the origins of the money. 
Nemtsov said complaints would be filed with any bank that made similar transfers to his bank account. 
Shorina, Nemtsov’s spokeswoman, said the mysterious money was “absolutely a Kremlin provocation.” 
A woman who answered the telephone at the Kremlin press service on Friday said she would not comment on the allegation. 
Shorina said Nemtsov’s campaign first learned of the donation from a report on Yuga.ru, a news web site for the Sochi region. 
Yuga.ru editor Anton Smertin said his report was based on a news conference given Friday by the head of the Sochi election committee, Yury Rykov, who showed a copy of the invoice. 
A spokeswoman for the Sochi election committee gave few details about the donation, saying only that election officials were aware of it and that no election laws had been broken if Nemtsov did not use the money. 
The campaign of Lebedev, the billionaire candidate, said over the weekend that it had received three donations — each amounting to 1,000 rubles — from juveniles, also a violation of election law. The money was deposited in Lebedev’s account on Tuesday, the day he filed his registration papers. 
Opposition politicians have repeatedly accused election officials of manipulating election registration documents to keep them from running. A common tactic, Kremlin critics say, is to rule invalid signatures from supporters that prospective candidates are often required to submit to get on the ballots. 
Mayoral candidates in the April 26 Sochi election, however, had the option of submitting a deposit of 282,000 rubles ($8,400) to join the race, which Nemtsov said he did in order to avoid being kept out of the election on a technicality. 
The next Sochi mayor will have a strong say over how the government will spend billions of dollars to build infrastructure for the Olympics. Deputy Prime Minister Dmitry Kozak, who oversees the preparations for the games, said recently that the Olympics budget amounts to more than 200 billion rubles ($5.7 billion). 
The election could be a test for Solidarity, a loose umbrella opposition group formed in December and led by Nemtsov. After gubernatorial elections were canceled in 2004, mayoral elections allow the opposition perhaps its only chance to participate in big politics. 
Unidentified assailants ambushed Nemtsov last Monday, pouring ammonia over him as he made his way to a news conference in Sochi, the candidate and his supporters said. Nemtsov blamed the attack on the pro-Kremlin youth group Nashi, which is notorious for similar guerilla political stunts.

TITLE: Central Bank Sees Cut in Rate
AUTHOR: By Courtney Weaver
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Central Bank has been taking flak from all sides lately over its insistence on maintaining what critics call “crippling” and “bankrupting” interest rates, a policy endorsed by the prime minister to keep lenders operating above the level of inflation. 
But in a reversal that could mollify bankers and borrowers — not to mention VEB chief Vladimir Dmitriyev and Mayor Yury Luzhkov, who both took digs at the Central Bank’s monetary policy last week — First Deputy Chairman Alexei Ulyukayev said Friday that the bank could begin cutting rates as soon as next quarter. 
The comments, made in an interview on Ekho Moskvy radio, reflect a growing confidence that inflation will begin to subside as production plummets and the devalued ruble starts to regain ground against a falling dollar. Prime Minister Vladimir Putin said earlier this month that setting interest rates below inflation would “destroy the economy” — a position that few have publicly challenged. 
A notable exception is Luzhkov, who in recent months has rarely missed an opportunity to criticize the Finance Ministry and Central Bank for keeping interest rates high, a policy he says has fed inflation rather than being a product of rising prices. 
The country’s benchmark rate, the refinancing rate, has been at 13 percent since Dec. 1, although interbank rates have fluctuated wildly since then, at times passing 20 percent. The government forecasts full-year inflation of 13 percent to 14 percent, roughly the same as in 2008. 
“I think it’s entirely reasonable to expect a lowering of the refinancing rate in the second quarter, along with majority of our other instruments. ... It’ll be a little step, but it’s important for us to define the tendency,” Ulyukayev said, RIA-Novosti reported. 
The comment was not included in a transcript on Ekho Moskvy’s web site. 
Ulyukayev said he was certain that Finance Minister Alexei Kudrin’s predictions that inflation, which has jumped to about 15 percent in recent months, would fall were “absolutely” correct. 
But the financial crisis may not be solved quite yet. 
Economists say any easing of key interest rates would also pave the way for further speculation against the ruble, which banks made a profitable sport of during its three-months of controlled devaluation, as well as renewed capital outflows. 
The high interest rates were, in part, intended to make ruble deposits worthwhile for investors who had been rapidly switching to foreign currencies to take advantage of higher post-inflation rates. But now that the Central Bank is starting to buy back dollars to prevent the ruble from rising too rapidly, critics of the rates say it’s time to start cutting. 
One particular concern, analysts and market participants say, is that high interest rates could spell trouble when loans come due this fall. Bad loans are expected to compose a double-digit percentage of credit portfolios this year and are made even more difficult to repay by the high rates that commercial banks are charging. 
Finance Minister Alexei Kudrin estimated last week that the figure could hit 10 percent, and Alfa Bank president Pyotr Aven said the figure could hit 15 percent to 20 percent in an interview with the Financial Times. 
In the interview, Aven joined the ranks of bankers canvassing for lowered interest rates, which would reduce the number of bankruptcies when loans are due in the third quarter, he said. 
Dmitriyev, chief of state-owned Vneshekonombank, the supervisory board of which is chaired by Putin, also came out against the high rates last week, calling them “clearly and inevitably crippling.” 
Putin said on March 12 that the Central Bank could not afford to reduce rates below inflation and that cutting rates by more than a couple of percentage points may be impossible for a number of other reasons, economists said. 
If the currency remains stable and outflow stagnates, the Central Bank will likely stick to its word to reduce interest rates in April, said Yevgeny Nadorshin, chief economist at Trust Investment Bank. The cut, however, would likely be as little as half a percentage point, he said, hardly what banks would like to see. 
At the moment, Central Bank interest rates can run high as 15 percent to 19 percent, a striking contrast with the rates in the United States and Russia, which are now lower than one percentage point. 
Ulyukayev took issue with “my kindly comrade” Aven’s characterization of the Central Bank’s lending, contending that the refinancing rate was 13 percent and that “most of the funds we offer banks we offer through repo operations and secured loans at 11 to 12 percent, up to 13 percent. It’s yours for a year, be my guest. 
“And the respected Alfa Bank comes and takes these funds. Unsecured loans are another matter, they’re the one instrument where we really are taking 16 percent for five weeks and 18 percent for loans of three to six months. ... We limit the amount of funds we give through such instruments, and we plan to do so in the future,” he said.

TITLE: In Brief
TEXT: <b>Driver Opens Fire</b>
ST. PETERSBURG (SPT) — Police arrested a driver outside St. Petersburg on Saturday for opening fire after he was stopped for speeding, said the Central Internal Affairs Directorate.
According to the press release, traffic police tried to stop the driver of an Audi A6 for speeding in the village of Kuyvozi in the Vsevolozhsky region of the Leningrad Oblast, Interfax reported. After initially refusing to stop, the driver pulled over, got out of the car and shot at the police car with a hunting weapon. Police subdued the suspect when he attempted to flee into the nearby forest.  
Officers confiscated the car, a Winchester hunting weapon, a dagger, one bullet casing and 95 pairs of jeans. The suspect has been charged with using force against a law enforcement official. 

<b>Toyota Takes Week Off</b>
ST. PETERSBURG (SPT) — Japanese carmaker Toyota halted production Monday at its St. Petersburg factory until April 6 as a result of the financial crisis, the company said in a press release.
The release said the decision was made “in connection with the continuing difficult economic and market situation,” Inferfax reported. The factory’s 750-plus workers will receive two-thirds of the average wage until April 7, when the factory is set to resume full production.
Toyota opened the factory in December 2007 and planned to manufacture 16,000 cars there in 2008 and to increase production to 50,000 cars within two years. In the first half of 2008, however, only 1,500 cars were produced.

<b>Gogol Exhibition</b>
ST. PETERSBURG (SPT) — An exhibition of lithographs depicting St. Petersburg in the work of Nikolai Gogol opened Monday at the National Pushkin Museum, according to a museum press release.
The exhibition, which is titled “Improvisation on the Theme of Gogol’s St. Petersburg,” features the work of Russian artist Viktor Vilner and is timed to coincide with the 200th anniversary of the writer’s birth on Wednesday, Interfax reported.
The lithographs illustrate scenes from Gogol’s St. Petersburg tales, including “The Nose” and “The Overcoat.” The occasion also marks the first time an entire series of lithographs by Vilner has been shown in St. Petersburg.
Gogol made his name in St. Petersburg and set many of his most famous works in the city.

<b>Reptile Trafficker Busted</b>
ST. PETERSBURG (SPT) — Customs officials prevented a citizen of Uzbekistan from smuggling 600 tortoises into Russia by train, Interfax reported Friday.
Customs officials in the Astrakhan Oblast detained a passenger on a train from Tashkent to St. Petersburg for trying to illegally bring 600 tortoises into the country, according to the report. The smuggler said he planned to sell the tortoises to restaurants in St. Petersburg, a customs official said.  
Officials detained the passenger for not having the proper documentation for the cargo. Both the smuggler and the tortoises were sent back to Uzbekistan.

<b>New Arms on Subs</b>
MOSCOW (AP) — The Defense Ministry said new submarines will be armed with improved nuclear-tipped cruise missiles, Itar-Tass reported Friday.
The first in a series of six nuclear submarines, the Severodvinsk, will join the Navy in 2011, the ministry said. At least five other submarines of the same type will be built by 2017, it said.

TITLE: Top Court Supports Chaika on Dismissal
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — In another twist to a standoff between senior law enforcement officials, the Supreme Court has upheld the dismissal of Moscow’s top investigator, casting into doubt the criminal cases that he had been conducting. 
The judges ruled that Prosecutor General Yury Chaika was right to fire Anatoly Bagmet, the head of the Investigative Committee’s Moscow branch, for “oath-breaking and discrediting misconduct of office,” overturning decisions by two lower courts, Interfax reported. 
Chaika fired Bagmet, a former Chelyabinsk investigator, in December 2007 for purportedly falsifying his academic records while previously working as a university lecturer in Chelyabinsk. 
Investigative Committee head Alexander Bastrykin, mired in a power struggle with Chaika, appointed Bagmet to head the Moscow branch when the Investigative Committee was formed in September 2007 and finally succeeded in installing him in June 2008. 
Bagmet said after the Supreme Court ruling Thursday that he would appeal to the court’s presidium and continue in his job “as long as Bastrykin does not decide otherwise,” Kommersant reported Friday. 
An Investigative Committee spokeswoman said Friday that she would not comment on the case. “This is a civil case between the prosecutor general and Mr. Bagmet,” she said. 
Calls to the prosecutor general’s press service went unanswered Friday. 
Analysts called the decision a victory for Chaika in the long-standing conflict with Bastrykin and said it highlighted the tension between the two since the Investigative Committee was created. 
“Each uses every possibility to criticize the other and show his independence. There is an extremely destructive relationship between the two,” said Alexei Mukhin, an analyst with a Moscow think tank, Center for Political Information. 
Mukhin also said the court’s ruling that effectively declared Bagmet’s tenure illegal raised the possibility that his decisions while in office might face legal challenges. “I fear that this is so,” he said. 
Yelena Liptser, a prominent lawyer currently defending businessman Platon Lebedev, agreed. “If an official’s holding of office is declared illegal, his decisions also can be seen as illegal,” she said, adding that Bagmet had never overseen Lebedev’s case or that of his business partner, former Yukos CEO Mikhail Khodorkovsky. 
In another wrinkle to the infighting, Moskovsky Komsomolets reported Friday that unknown intruders recently broke into Bastrykin’s apartment in St. Petersburg while he was out of town. The report, citing police sources, said Bastrykin refused to authorize an investigation, possibly because he did not want to reveal “dirt” about his personal life. The report, authored by muckraking journalist and State Duma Deputy Alexander Khinstein, said Bastrykin is an avid antiques collector. Khinstein last year accused Bastrykin of illegal real estate activities in Prague.

TITLE: Military Spy Charged in Sex Slave Ring
AUTHOR: By Natalya Krainova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — An official with the Defense Ministry’s intelligence branch has been charged with leading an international crime ring trafficking women as sex slaves, a senior investigator said Friday.
The official, a colonel in the ministry’s Main Intelligence Directorate, or GRU, led a crime syndicate that trafficked more than 130 women from Russia and former Soviet republics to work as prostitutes from 1999 to 2007, said Alexander Sorochkin, head of the Investigative Committee’s military investigations directorate, RIA-Novosti reported. Sorochkin did not release the official’s name.
A total of 13 suspects in the case stand accused of human trafficking, running prostitution rings, forgery, organizing illegal migration and forcing women and minors to work as prostitutes under the threat of violence, Sorochkin said.
Ten of the suspects have been placed under arrest, while the remaining three have been released after it was determined that they were not flight risks, he said.
Repeated calls to the Investigative Committee’s military investigations spokesman, Sergei Zhukov, and to the GRU press office went unanswered Friday. Defense Ministry spokesman Alexander Drobyshevsky said he had no information on the case.
The crime syndicate sold women from Russia, Uzbekistan, Moldova, Ukraine and Belarus into sex slavery in several European and Middle Eastern countries, including Israel, Italy, Germany, Greece, the Netherlands and United Arab Emirates, Sorochkin said, RIA-Novosti reported.
The countries where the women were purportedly trafficked to are major destinations for sex slaves from former Soviet countries, Afsona Kadyrova, a lawyer with the Angel Coalition, an umbrella organization of anti-trafficking NGOs operating in nine Russian regions, told The Moscow Times.
In the past two years, the number of women trafficked from former Soviet countries to work in the sex trade has decreased due to rising living standards and increased awareness by potential victims about plots to lure women into forced prostitution, Kadyrova said.

TITLE: Soyuz Glitch Prompts Manual ISS Docking
AUTHOR: By David Nowak
PUBLISHER: The Associated Press
TEXT: KOROLYOV, Moscow Region — A cosmonaut was forced to dock a Soyuz capsule carrying U.S. billionaire tourist Charles Simonyi manually at the international space station Saturday after a sensor monitoring the engines apparently malfunctioned.
Engineers played down the incident, but it renewed recent questions about Russia’s otherwise famously reliable spacecraft.
Vladimir Solovyov, flight director for the Federal Space Agency, said that just a few minutes before the docking time an autopilot signal went off showing that one of Soyuz engines might have failed.
Cosmonaut Gennady Padalka reported that the engines were operating normally, and he took manual control of the capsule to keep an emergency computer program from thrusting the engines and sending the craft backing away from the station.
“We took the decision not to allow that,” Solovyov told a news conference at mission control in Korolyov, on Moscow’s outskirts.
“We have to figure out what happened,” he said.
The docking by Padalka appeared otherwise smooth and was slightly ahead of schedule, roughly two days after the capsule blasted off from the Baikonur Cosmodrome in Kazakhstan’s barren steppe. Applause broke out among space officials and crew relatives gathered at mission control after the hookup was announced.
Cosmonauts typically receive extensive training in the event that Soyuz’s autopilot fails or some other problem pops up.
“Everyone worked wonderfully, on the ground and on the spacecraft. There were no uncontrolled situations,” said Vitaly Lopota, chief engineer with Soyuz manufacturer RKK Energia.
Padalka and U.S. astronaut Michael Barratt are joining the station’s current crew, while Simonyi, who is making his second trip as a paying customer to the space station, returns to Earth on April 7 along with cosmonaut Yury Lonchakov and NASA astronaut Michael Fincke.
Some three hours after docking, the crews opened the hatches and Padalka, Barratt and Simonyi floated in to greet the station’s occupants — Japanese astronaut Koichi Wakata, NASA astronaut Michael Fincke and cosmonaut Yury Lonchakov — with hugs, smiles and handshakes.
“We had a great ride up here, and the docking was a little bit of excitement, but we’re very glad to be here and the station looks great,” Barratt said later in a video hookup with mission control.
“It was an awfully fun ride,” he said after wishing his wife Michelle a happy anniversary.
Simonyi, a Hungarian-born software designer, exchanged greetings with his brother in Hungarian. Padalka’s daughter sang a small song while Padalka played with a small stuffed animal that floated about the station’s compartment.
Saturday’s incident was the latest of several mishaps in recent years to hit Russia’s spacecraft, which otherwise have a reputation for reliability and safety.
Last year, a Soyuz capsule returning from the station landed hundreds of kilometers off target in Kazakhstan after hurtling through Earth’s atmosphere in a steeper-than-normal descent that subjected the crew to severe G-forces.

TITLE: President Medvedev Says He, Not Putin, Is In Charge
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — President Dmitry Medvedev has assured a BBC reporter that he is in charge of Russia even as his predecessor, Prime Minister Vladimir Putin, continues to wield enormous influence. 
“I am leading the state, I am the head of state and the division of power is based on this,” Medvedev said in an interview released Sunday in answer to a question about who was the boss. “It’s the president who makes major decisions on behalf of the state. It’s evident.” 
Medvedev, inaugurated in May, is finishing his first year as president after Putin endorsed him for the post. Medvedev had long served as Putin’s chief and deputy chief of staff. 
Medvedev declined to say whether he would run for another term in 2012.

TITLE: Azeris Plan Talks With Gazprom
PUBLISHER: The St. Petersburg Times
TEXT: Gazprom won an agreement from Azerbaijan on Friday to begin talks on buying Azeri gas in a deal that looks set to undermine the prospects of supply diversification for Europe. 
Gazprom and the State Oil Company of Azerbaijan, or Socar, will discuss the terms of deliveries, which are to start next year, Gazprom said in an e-mailed statement after a meeting between Gazprom chief Alexei Miller and Socar chief Rovnag Abdullayev. 
Gazprom and Socar will jointly inspect a 200-kilometer pipeline from Baku, the Azeri capital, to the border point of Novo-Filya, in Dagestan, to determine the extent of upgrades required for the shipments to begin. 
Gazprom first offered to buy Azeri gas in June. Initial talks with Socar began the next month. Azerbaijan, which bought gas from Gazprom until 2007, became a gas exporter after BP-led fields began production that year. 
The European Union has been backing the Nabucco pipeline to broaden its choice of suppliers. 
Gazprom’s purchase of Azeri gas would reduce the likelihood that there will be enough gas to fill Nabucco, said Tatyana Mitrova, director of the Center for the Study of the Global Energy Markets at the Russian Academy of Sciences, Interfax reported.

TITLE: Gazprom Likely to Reduce ’08 Dividend
PUBLISHER: Reuters
TEXT: MOSCOW — Gazprom said Friday that it was likely to cut its dividend payout for 2008 following a fall in its annual net profit, the first decrease in this decade.
But the company will not change its dividend policy based on market capitalization and profits, and it will continue to invest in its main projects, chief financial officer Andrei Kruglov said.
“Since 2008 net profit was not as much as in 2007, there will be a change in the payment, but it will only be connected to the profit level and will not be the result of a change in the dividend policy,” Kruglov said.
Gazprom said Friday that it swung to a 259.87 billion ruble ($7.76 billion) loss, under Russian accounting standards, in the fourth quarter of 2008 from a 147.2 billion ruble profit in the third quarter.
Denis Borisov, an analyst at Solid brokerage, said the loss implied that its 2008 net profit was 173 billion rubles, a drop of more than 50 percent year on year.
Gazprom’s net profit has grown every year since at least 2000.
Kruglov said Gazprom’s board would consider the dividend payment at a meeting later this year and that the firm was standing by its dividend policy, which was adopted in 2003.
The policy provides that the firm should pay annual dividends of not less than 2 percent of its market capitalization but not more than 10 percent of its net profit under Russian accounting standards.
Borisov said that if Gazprom paid 10 percent of its net profit, the payout might amount to about 73 kopeks (2.1 cents) per share, nearly a quarter of the 2.66 rubles per share paid in 2007.
Gazprom said the fourth-quarter loss resulted from the revaluation of its assets.
Gazprom’s shares on the MICEX closed down 3.3 percent on Friday, largely in line with the exchange’s oil and gas index.
Kruglov reiterated that Gazprom was likely to cut its 2009 capital expenditure program after the first quarter, but the board has yet to review specific figures.
“After the first quarter, the investment program will be revised. This is because consumption is falling. It is our rule to produce as much as we can sell,” he said.
But Kruglov added that the company would not cut down development programs at its main projects, such as construction of the North Stream gas pipeline to Europe and development of gas deposits on the Yamal peninsula.
Gazprom’s total investment program — which consists of capital expenditure and long-term financial investments — is set at 920.5 billion rubles for this year.

TITLE: RusAl Expects Aluminum Prices to Recover in 2011
PUBLISHER: Combined Reports
TEXT: MOSCOW — United Company RusAl, controlled by billionaire Oleg Deripaska, said Friday that aluminum prices were bottoming out and that a very significant recovery was expected in 2011.
Artyom Volynets, director of corporate strategy, said in an interview after a presentation to analysts in London that aluminum prices, currently at about $1,420 per ton, would remain volatile this year before rising $200 to $300 in 2010 ahead of a “big” improvement in 2011.
“It feels very bad now, but it also means that we shall start seeing the light at the end of the tunnel because we are finding a bottom,” Volynets said. “If the production costs were to stay at last year’s levels, none of the global smelters would be profitable.”
In February at the World Economic Forum in Davos, Deripaska said he expected aluminum prices to average $1,600 per ton over the next seven years, shortly after RusAl chairman Viktor Vekselberg said he was “100 percent sure” that the price per ton could hit $2,000 by the end of the year.
London Metal Exchange inventories, now at record levels above 3.4 million tons, are set to peak in the third quarter before falling as industry cutbacks take effect, Volynets said, adding that 17 percent of global aluminum capacity had already been cut. 
“We are open to the possibilities of making further cuts, but that all depends on global demand and the supply situation,” Volynets said. “We may consider bringing our production cuts up to 20 percent, but the decision has not been made.”
Helping to lift prices from 2010, Volynets highlighted economic stimulus packages announced in China and the United States, combined with a weaker dollar, which makes metals priced in dollars less expensive for holders of other currencies.
RusAl is also taking steps to cut costs as it faces peak debt repayment of $8 billion this year. The unlisted company has been in talks with Western and Russian banks to restructure billions of dollars of debt. Volynets said the debt talks were progressing well but would not involve surrendering its major stake in Norilsk Nickel. He also said RusAl had not discussed using any smelters or mines as collateral against foreign loans and maintained that the aluminum producer would not be asking for any financial assistance from the government.
He said all five smelters in Siberia continued to produce and are part of a strategy to centralize such activities.
“We are in a cyclical business,” Volynets said. “Pressures go up and pressures go down — but if you keep your costs low, you’ll be fine.”

¦?United Company RusAl said Friday that it had no plans to close its Bogoslovsky Aluminum Plant after workers said they had been asked to agree to salary cuts or risk the plant’s closure.
“We do not have current plans to close production at the Bogoslovsky Aluminum Plant,” RusAl’s press office said by e-mail. “At the moment we are seeking the support of the staff for the tough but forced measures.” 
Bogoslovsky’s union and workers told The St. Petersburg Times on Thursday that the plant’s management told them that the smelter might be closed if they did not accept salary cuts of up to 30 percent by April 10.

(Reuters, STP)

TITLE: In Brief
TEXT: <b>Business Lobby Critical</b>
MOSCOW (Bloomberg) — The Russian Union of Industrialists and Entrepreneurs, a lobby for the country’s biggest companies, said the government’s plan for dealing with the financial crisis is too vague and short-sighted.
 “The measures recommended by the government are for a sprint, when in fact we’ll have to run a marathon,” the union said in a research paper obtained by Bloomberg News that billionaires including Vladimir Yevtushenkov and Vagit Alekperov discussed with officials in Moscow on Monday.

<b>Car Market May Plunge</b>
MOSCOW (Bloomberg) — Russia’s car market may contract by as much as 60 percent this year in comparison with last year, Interfax reported, citing Industry Minister Viktor Khristenko.
An analysis of car sales in the first two months of this year shows that the market may contract as much as 60 percent, Khristenko told a meeting on the automotive industry in Togliatti on Monday, according to the news service.

<b>New Currency Planned</b>
MOSCOW (Bloomberg) — Russia and China are coordinating attempts to introduce a new currency that would replace the U.S. dollar as the dominant medium of exchange in global trade, Kremlin economic adviser Arkady Dvorkovich said.
Russia has received the Chinese proposal and “our positions are very close,” Dvorkovich told reporters in Moscow on Monday before leaving for the Group of 20 summit in London, where the issue will be discussed. “We have similar ideas.”

<b>VTB-24 Gets Loan</b>
MOSCOW (Bloomberg) — VTB-24, a unit of Russia’s second-biggest bank, received a $150 million loan from the European Bank for Reconstruction and Development to increase lending to small businesses outside the country’s biggest cities. 
VTB-24 will use the five-year loan to offer longer-maturity credits of less than $200,000 to enterprises in cities of less than one million people, the EBRD said in an e-mailed statement Monday, without giving an interest rate for the loan.

<b>Deripaska’s Deadline</b>
VIENNA (Bloomberg) — Oleg Deripaska has until December to decide whether he’ll keep his 25 percent stake in Austria’s Strabag, Vienna’s WirtschaftsBlatt reported, citing Raiffeisen Zentralbank Oesterreich head Christian Konrad.
Raiffeisen, which helped finance Deripaska’s stake in the construction company, wants the Russian businessman to remain a shareholder and will have a scheduled conversation with him on Friday, the newspaper reported. 

<b>Kazakhstan Aids HSBC</b>
ALMATY (Bloomberg) — The Kazakh government will help a unit of HSBC Holdings Plc, Europe’s biggest bank by market value, to expand its loan portfolio by attracting competitors’ clients who seek to refinance mortgages.
HSBC Bank Kazakhstan, the country’s 15th-largest lender by assets, will use $300 million of its own funds to refinance mortgages under an agreement with the National Wellbeing Fund Samruk-Kazyna, the primary conduit for the state’s economic anti-crisis program, fund spokeswoman Fatima Kosayeva said by telephone from Astana.

TITLE: Sistema Ups Stake In Bashneft
PUBLISHER: Bloomberg
TEXT: MOSCOW — AFK Sistema, billionaire Vladimir Yevtushenkov’s holding company, agreed to pay $2.5 billion for control of Bashkortostan’s main oil producer, as well as three refineries, a petrochemicals plant and an oil-product trader in the Russian region.
Sistema will raise its stake in producer Bashneft to 77 percent from 25 percent and will also take majority interests in the Ufaneftekhim, Ufimskiy NPZ and Novoil refineries, the company said Monday in a statement. Sistema will increase its holdings in trader Bashkirnefteprodukt and the Ufaorgsintez petrochemicals plant to 73 percent apiece.
Energy industry investors are considering acquisitions as tumbling crude prices and sliding equity values make assets more affordable. The number of global oil and gas mergers and takeovers climbed 51 percent to 2,134 last year, Freshfields Bruckhaus Deringer said earlier this month.
Bashkir energy companies are “a mature asset, which generates serious cash flow,” said Yevgeny Golossnoy, an analyst at Troika Dialog in Moscow who has a “buy” recommendation on Sistema shares. “Prices for assets are falling now, and it’s the most favorable time for acquisitions.”
The Moscow-based company agreed to take a $2 billion, seven-year loan from VTB Group, backed by shares in the acquired companies and a 17 percent stake in Russia’s Mobile TeleSystems, according to a web site presentation. Sistema is in talks with local and foreign banks to borrow another $1 billion, spokeswoman Yulia Belous said Monday by telephone.
Bashneft accounts for 3 percent of Russian oil output, according to Sistema. The three refiners make up 10 percent of the country’s oil refining, while Ufaorgsintez is the nation’s largest producer of synthetic ethyl spirit. Bashkirnefteprodukt supplies oil products in the Volga region. The companies will require funding of about $1 billion over five years, CEO Leonid Melamed said on a conference call.
Sistema will pay $2 billion when the transaction is completed and another $500 million on a “deferred basis” after 14 months, according to the statement.

TITLE: World Bank Predicts Poverty for Russia
AUTHOR: By Paul Abelsky and Torrey Clark
PUBLISHER: Bloomberg
TEXT: Russia’s economy will probably shrink 4.5 percent this year after oil prices slumped and global contagion spread, driving up unemployment and pushing more people into poverty, the World Bank forecast.
 “As the crisis continues to spread to the real economy around the world, initial expectations that Russia and other countries will recover fast are no longer likely,” the bank said in a report Monday. In November, it saw growth of three percent, based on oil prices of $75 a barrel and global expansion.
The slump may last longer and be deeper than in the aftermath of the 1998 government’s $40 billion debt default and 70 percent ruble devaluation, which triggered bank runs and wiped out citizens’ savings. A contraction may be prolonged by a drop in household consumption and a “second wave” of non-performing corporate loans, Zeljko Bogetic, the World Bank’s Moscow-based lead economist, said Monday in Moscow.
 “There is a risk of further deterioration in the world economy and in Russia,” Bogetic said. “The real economy has deteriorated more than expected. I’d call it a silent tsunami, a more gradual tsunami than the one we’ve seen, with the steady increase of non-performing loans that will be potentially damaging for the global economy and Russia.”
Russia’s government says the economy will shrink 2.2 percent this year after a decade-long expansion. The Cabinet this month approved a revised budget with the first deficit in 10 years of 2.98 trillion rubles ($88.2 billion), or 7.4 percent of projected gross domestic product.
“We disagree with the World Bank forecast, it’s too pessimistic for Russia,” First Deputy Prime Minister Igor Shuvalov said in Moscow on Monday.
The revision was calculated on an average price of $41 a barrel and an inflation rate of about 13 percent. The budget contains 1.6 trillion rubles in anti-crisis spending.
Inflation will be between 11 percent and 13 percent this year as higher import prices offset falling consumer demand, the unavailability of loans and capital outflow, the bank said. 
Net capital outflow may reach $170 billion as Russian banks and companies pay off more than $130 billion of external debt and foreign direct investment dwindles to less than $5 billion this year, Bogetic said. Russia’s central bank estimates that less than $83 billion will be taken out of the economy this year, First Deputy Chairman Alexei Ulyukayev said Friday.
The government’s anti-crisis response should shift from a focus on the financial sector and companies toward targeting small and medium-size businesses, infrastructure and “cushioning the impact on the vulnerable,” the bank said.
Russia should earmark additional funds, equivalent to about one percent of gross domestic product for one year, to provide a temporary fiscal boost on programs including child allowance, unemployment benefits and pensions, the bank said. The spending program would increase the deficit by 0.75 percent this year because it will extend into 2010. 
The number of jobless people will probably rise by 2.7 million people in 2009, growing to more than 12 percent of the working population, the World Bank said. The number of poor may climb by 2.75 million, resulting in a 16 percent poverty rate.
The bank estimates about a quarter of the population is vulnerable to poverty. Russia also faces a severe housing shortage, with about seven percent sharing living space with other households and one in two persons having less than 10 square meters (108 square feet) per capita.
While the government has said it will maintain planned spending levels on priority programs in education, public health and housing this year, Russia needs to implement quicker measures to contain the crisis in the short term.
Russia’s international reserves are sufficient to finance the projected budget shortfall, though the need to preserve funds for next year means “the space for more fiscal stimulus this year appears limited,” the report said.
At the same time, the focus on tax relief in Russia’s stimulus package may undermine the revenue base after the price of oil tumbled. Oil will probably stay at about $40 to $50 a barrel this year, easing pressure on the ruble, and rise to $75 in the “medium term,” Bogetic said.
The foreign-currency stockpile, the world’s third-largest after China’s and Japan’s, has been eroded by 36 percent from an August record of $598.1 billion, as Bank Rossii sold dollars and euros to manage a 30 percent “gradual devaluation” of the ruble against the dollar.
The World Bank predicts new pressures on Russia’s banking sector as credit markets remain frozen and bad loans increase. The share of non-performing loans may exceed 10 percent of the total by the end of this year from 3.8 percent in January.
Russia has allocated 555 billion rubles of budget money to aid lenders and may also allow banks to swap shares for sovereign ruble bonds to help them boost capital, Finance Minister Alexei Kudrin said last week.

TITLE: IKEA to Let Staff Go Amid Red Tape Battle
PUBLISHER: The St. Petersburg Times
TEXT: IKEA, the world’s biggest home-furnishings retailer, said Saturday that it was reconsidering new investment in Russia and that it would have to lay off 245 employees after months of delays kept it from opening a store in Samara. 
The Swedish company has invested more than $3 billion in the country in the past decade and was planning to add four stores this year to the 11 it already runs. Officials have often delayed the openings of major foreign retailers’ outlets, insisting on compliance with various regulations. The Samara opening has been held up since late 2007. 
The store and accompanying mega-mall are finished, but IKEA is still waiting for a host of documents permitting them to open, IKEA Russia said in an e-mailed statement. “Since we cannot foresee the end of this process, we are forced to notify the 245 employees of the IKEA store in Samara that the company will no longer be able to continue their employments,” IKEA said. 
The company’s board is “questioning future IKEA investments in Russia due to unpredictability of the administrative processes in some regions,” Russia general director Per Kaufmann said in the statement. No one answered the phone Sunday at the number provided in the statement. 
IKEA said on its web site that the Samara store was scheduled to open this spring. IKEA hasn’t reported any problems with a store in Omsk that it plans to open before the summer.

TITLE: First LNG Shipment Sent From Sakhalin-2 Plant to Japan
PUBLISHER: Reuters
TEXT: Sakhalin Energy sent Russia’s first cargo of liquefied natural gas to Japan on Sunday from the Sakhalin-2 project that will allow the Kremlin to extend its reach in world energy markets from Europe into Asia and North America.
Sakhalin Energy, which is controlled by Gazprom, loaded the 145,000 cubic meter cargo for the two-day voyage to Tokyo Bay and the first Japanese buyers of Russian gas: Tokyo Gas and Tokyo Electric Power.
“Russia has marked its entry into the Asia-Pacific LNG market, and Japan and Korea have a new long-term energy partner,” Sakhalin Energy chief Ian Craig said in a statement.
The Sakhalin-2 project aims to supply five percent of world demand for LNG when it reaches full capacity next year, President Dmitry Medvedev said last month when he launched the plant on the southern tip of Sakhalin. The project, in which Royal Dutch Shell owns a minority stake after ceding control to Gazprom, is the first LNG plant in Russia. Japan’s Mitsubishi and Mitsui also own stakes. Sakhalin-2 became symbolic of the Russian state’s ability to overturn previous deals.
Sakhalin Energy said Sunday that “practically all” of the 9.6 million tons of annual production capacity had already been committed in long-term sales contracts to buyers in Japan, South Korea and other markets.

TITLE: New Executive Chef Aims for Six-Star Perfection
AUTHOR: By Shura Collinson
PUBLISHER: Staff Writer
TEXT: In November last year, St. Petersburg’s five-star Corinthia Nevskij Palace Hotel appointed Frenchman Thierry Vergnault as its new executive chef. Vergnault has ambitious plans for the Nevskij Palace, which is currently redeveloping the two buildings either side of the existing hotel as part of a multi-million dollar extension project.
“My challenge is to bring the hotel up to a six-star level,” he said in a recent interview with The St. Petersburg Times. 
Vergnault, 41, said one of his main professional aims was to bring different things to people. “People don’t want to eat the same things all the time,” he said. “When someone goes out, it’s an event they should enjoy, you should amuse your palette as well as yourself.”
Finding a broad range of fresh ingredients in St. Petersburg can in itself be a challenge however, especially for international cuisine like that served at the hotel’s popular Sunday brunch, which Vergnault has recently revamped to include Chinese, Japanese and Vietnamese food, as well as a range of Mediterranean dishes and a variety of seafood.
To solve the problem of the limited range of products available locally, Vergnault said that many of the ingredients are brought from abroad, including Fin de Claire oysters from France and other products from Italy and Spain.
Vergnault’s other responsibilities as head chef include giving the Cafe Vienna on the ground floor of the hotel a makeover. He is currently deciding on a new menu and concept for the cafe.
“We have a lot going on,” he said. “I’m excited about being here because we have a lot going for us [with the renovation] — we have a big ballroom, we’re going to have the biggest conference facilities in the city, we’re going to have stores added to the ground floor. Of course it’s a challenging time with the economy, but that’s why we have to keep doing well.” 
Before moving to Russia, Vergnault lived and worked in Philadelphia, Hawaii, the Virgin Islands and California, as well as spending nine years in the sun soaked city of Miami, and admits he was concerned about moving to a country famed for its harsh winters, but he has settled in quickly to his new life at the Nevskij Palace.
“So far, it’s been great,” he said. “The city is lovely, the architecture is amazing.”
Vergnault, who originally hails from Nueil les Aubiers, a small town in the west of France near Brittany, said that Russia had always been a dream for him.
“I’d never been here before, but it was always a dream to move to Russia,” he said. “I have traveled a lot in my life and I always thought I need to go to Russia,” he said.
“When I found the job vacancy on line, I thought, ‘This is the job for me.’ Of course it’s very different to Miami, I’m used to temperatures of 25, 30 degrees, but I don’t go outside too much!” he laughed.
Vergnault said that the local culinary scene was very different to that of other countries in which he has worked.
“Culinary-wise, Russia is behind England, France and America,” he said. “That doesn’t necessarily mean it’s bad — just different,” he added. “If I do something trendy here, it would be a risk, as Russians might not like it — they seem to be quite traditional,” he explained.
But that is not to say that Vergnault won’t be introducing any innovations during his time at the Nevskij Palace.  
“I might introduce some changes little by little, and if they like it that’s fine, if not I’ll do something else,” he said.
“One of Thierry’s top skills is knowing how to read a market,” said Eddie Sarria, International Director of Sales of the Intercontinental Hotel in Miami, who has known Vergnault for more than 10 years since they worked together at the South Beach Marriott hotel in Miami Beach.
“He’s not a typical chef, he’s open to opinions,” said Sarria. “He listens, and gets to know his audience when starting a venture, and caters accordingly to the market rather than storming in and shocking people.” 
“He also has a strong sense of creativity and boundaries. His talent, whether it’s a menu, a restaurant or a hotel, is taking it to a different level,” he said.
Vergnault said that the local hospitality business community had helped him to adjust to working in St. Petersburg.
“It doesn’t matter where you go in the world,” he said. “In the hotel and restaurant business, people get together, talk about their work and what plans they have.”

TITLE: Changes to the Law on Limited Liability Companies
AUTHOR: By Denis Sosedkin, Natalia Vygovskaya and Andrey Maryankov.
TEXT: The new Federal Law of 30 December 2008, No. 312-FZ, “On the amendments to the first part of the Civil Code of the Russian Federation and other selected legislative acts of the Russian Federation” (hereinafter the “Law”), has introduced a number of fundamental changes in the legislation on limited liability companies. We would like to bring a number of these to your attention.
One of the more significant changes to note is the introduction into Russian legislation of an analogue to the shareholders agreements, which are quite widespread in foreign jurisdictions. This change is a practical result seen from the declared objective of liberalizing corporate legislation so as to establish a flexible framework within which businesses have the right, at their discretion, to establish rules on corporate governance and to regulate the relations between themselves. From a corporate standpoint, this innovation slightly decreases the advantages of foreign jurisdictions to which commercial organizations had in practice previously favored for basing their joint ventures.
Thus, the new Law will make it possible for shareholders (participants) of limited liability companies to conclude agreements under which they will be able to exercize their rights as shareholders in a pre-agreed manner or to abstain from exercising such rights. In particular, under the Law shareholders may agree on special voting arrangements or undertake to sell their participatory interest at a pre-determined price, where such an undertaking to sell may be triggered by the occurrence of conditions specified in the agreement. It should be noted that before the adoption of the Law, Russian courts negatively viewed similar agreements and recognized their provisions as being invalid. The Law directly provides for the option of concluding shareholders agreements, and thus completely changes the existing practice in this sphere.
Additional stability of the business form of the limited liability company as a whole, and to the relations arising out of the shareholders agreements in particular, will be secured by the fact that in accordance with the Law, the withdrawal of a shareholder will only be permitted if this right of the shareholder is set out in the constitutional document of the company, that is in its charter. The Law will also forbid the withdrawal of shareholders if, as a result of such withdrawal, not one shareholder would be remaining in the company. 
Other changes which are essential to mention are those concerned with the order of transferring participatory interest in a limited liability company. In general, agreements related to a transfer of the participatory interest will be subject to obligatory certification by a notary. The obligatory certification by a notary will also be necessary for agreements on the pledge of participatory interest in limited liability companies. Failure to observe certification requirements for transfer and pledge agreements will result in their invalidity. 
The new Law regulates in a different manner the question of vesting shareholder’s rights and obligations with the acquirer of a participatory interest and has resolved the problem of determining the moment when the transfer of rights to the participatory interest has been completed. In accordance with the Law, under a transaction which requires certification by a notary, the right to the participatory interest is transferred to the new shareholder from the moment of the certification of the transaction by a notary, or, if such certification is not required, it is transferred from the moment of making the corresponding changes in the Unified State Register of Legal Entities (the Russian companies’ register).
The Law has introduced provisions, in accordance with which after the certification by a notary of the transaction regarding the transfer or to the pledge of a participatory interest, it will be the notary itself (instead of a company) which will submit an application on  entering changes into the Unified State Register of Legal Entities. Information as to the par value, the size of the participatory interest of the shareholders, and, importantly, the pledge of participatory interest will be recorded in the Unified State Register of Legal Entities, but the same data will not be reflected in the limited liability companies’ charters. Thus, the transfer of rights to a participatory interest will not create the need for making amendments to the charter of the company. At the same time, a limited liability company will have the entrusted responsibility of compiling a list of its shareholders. This list is likely to be used for obtaining information on the shareholders in the company both by the shareholders themselves and by third parties (for example, by potential buyers of a  participatory interest in the company).
It is also of significance that the legislator has formally determined the order and method for protecting the rights of shareholders to their participatory interest in limited liability companies. A shareholder who lost his participatory interest will have the right to demand acknowledgement of his right to that participatory interest at court and simultaneously to request termination of the rights to the participatory interest of the acquirer. The order, established under the Law, for the acknowledgement of the right to the participatory interest is almost identical to the rules of vindication, provided by the Civil Code of the Russian Federation for the requesting of a return of property from illegal possession. 
The Law has introduced considerable changes to the way in which shareholders can exercise their pre-emptive rights with regard to the sale of a participatory interest by other shareholders. In particular, the Law permitted the partial exercise of pre-emptive rights, equaled the notice served to the company and other shareholders about the intention to sell a participatory interest to a third party to a formal offer to enter into a contract, and introduced the concept of a price that is previously specified in the charter, at which (in the case of including the corresponding provisions into the charter) the shareholders can acquire the participatory interest of the selling shareholder.
It is important from a practical point of view to note that after the Law comes into force, the foundation agreements of companies incorporated prior to 1 July 2009 will cease to be constitutional documents, and the charter will become the sole constitutional document of limited liability companies. 
Instead of the foundation agreement, the founders of limited liability companies will conclude an agreement on establishing a company, similar in its essence to the agreement, concluded on incorporation of joint-stock companies, but differing from the shareholders agreement mentioned above. The Law has also introduced quite a few other changes, including changes to the provisions on the powers of the board of directors, as well as large-scale and interested party transactions. 
The Law will enter into force on 1 July 2009. In the period from 1 July 2009 to 1 January 2010 the  constitutional documents of limited liability companies adopted prior to the Law taking effect, must be brought into compliance with the provisions introduced by the Law.

Denis Sosedkin is a Partner, Natalia Vygovskaya is a Senior Associate and Andrey Maryankov is an Associate at DLA Piper.

TITLE: Airbus Brings $400 Million to Russian Production
AUTHOR: By Boris Kamchev
PUBLISHER: Special to The St. Petersburg Times
TEXT: TOULOUSE, France — Sometime around midnight about once a month, a convoy of airplane parts weighing more than 230 tons makes its way through the small village of Levignac near Toulouse, France. Locals and tourists gather to watch the impressive spectacle of the gigantic metal parts of a cutting-edge flying machine snaking through the center of the 18th-century village, whose two-story town houses and tower seem dwarfed by the tail section of the craft. 
The parts of Airbus’ new 550-seater flagship, the A380, are on their way to Toulouse-Blagnac, where the aircraft are assembled before being delivered to airlines including Lufthansa, the leading international carrier in CIS countries, which is scheduled to receive its first Airbus A380 in March 2010. 
In 2004 and 2005, Airbus, the civil aircraft arm of EADS (European Aeronautics Defense and Space company) awarded large work packages generating a total revenue of $400 million over ten years for the Russian manufacturing industry. 
“IRKUT Corporation, which received the majority of the work packages, has started production of the nose landing gear bay, keel beam, flap track and floor grid sections for the A320 family,” said Stefan Schaffrath, head of media relations at Airbus, in an interview last month. 
In 1991 the first joint Airbus-Russian research programs were initiated by leading Russian institutes. In March 2003, the company developed an engineering center (ECAR) in Moscow.  
 “Airbus cooperation with Russia in aircraft development has been established over the years with the implementation of a wide range of research and technology projects,” said Richard Carcaillet, director of marketing for Airbus’ A380. “ECAR is the first research center established by the company outside of its home countries.” 
A wide cooperation program with the Russian aviation industry was defined in an agreement between EADS and Rosaviakosmos in July 2001. The cooperation program aims at generating a turnover of more than $800 million over ten years for Russia. This agreement allows Russian participation in all major phases of Airbus aircraft development. ECAR currently employs some 170 Russian engineers, many of whom have been trained in Toulouse and Hamburg.
Since the airplane’s first maiden flight in April 2005, only three major carriers have been able to afford to add the A380 to their fleets — Singapore Airlines was the first carrier to buy the airliner in October 2007, followed by the Arab Emirates and Australia’s Qantas. A total of fifteen A380s currently operate between the global hubs of New York, London, Dubai, Tokyo, Sydney and Los Angeles. 
These airports have already developed infrastructure to become compatible with the A380, including an enhanced runway system, minimum taxi clearance requirements and other technical details for servicing such enormous jets, which have a wingspan of almost 100 meters. Some carriers have even developed their own A380 maintenance facilities: Lufthansa has inaugurated a facility the size of three soccer fields in Frankfurt. It is the biggest maintenance hanger in Europe, with space for four A380s or six Boeing 747s — an investment of more than $160 million. 
In 2009 Airbus plans to deliver eighteen A380s, while total orders for the next few years amount to 200 aircraft and 16 customers, including British Airways, Lufthansa and Air France. The list is long, but does not yet include any Russian carriers, which in view of the current economic crisis look unlikely to be able to afford a $250 million airliner in the next few years.
“We are constantly in talks with most of the airlines in Russia who are looking for the capacity we offer, from the A320 family up to A330 and A350, but not yet A380,” said Carcaillet. “However, we feel that there is potential in the longer term for A380 to find its way into the Russian skies, because Transaero airline already operates our rival, the Boeing 747,” he said.
Even if a Russian airline does put in an order for the largest jumbo jet in the world, it will have to count on waiting for three to six years — the time needed for delivery of an A380, since the existing list consists of 16 carriers.

TITLE: Long-Serving Aeroflot CEO Replaced With Sistema Executive
PUBLISHER: Combined Reports
TEXT: Aeroflot’s board fired longtime chief executive Valery Okulov on Thursday and replaced him with Vitaly Savelyev, a Sistema executive with no previous experience in the aviation sector. 
The shuffle caps a weeks-long power struggle at Russia’s flagship airline amid growing dissatisfaction over Okulov’s leadership, including criticism of the carrier’s failed bid for Alitalia in 2007 and a decision not to pay a dividend for last year. 
Minority shareholder Alexander Lebedev reversed his earlier opposition to Okulov’s removal Thursday, saying many of the board’s complaints against Okulov were well-grounded. 
“I’ve suggested many things to Okulov, and I was not listened to,” he told The St. Petersburg Times. 
Leonid Dushatin, the Aeroflot board member representing Lebedev’s National Reserve Corporation, which holds a 30 percent stake in the airline and is its largest minority shareholder, said last Tuesday that ousting Okulov would be “madness.” 
“It’s like putting out a fire with kerosene. There is no reason to do this right now,” he said. 
Lebedev said Thursday that he had heard that Savelyev was a “good manager” and that he would “recommend him.” 
It was not immediately clear what changes might be made at the airline under Savelyev, 53, first vice president at billionaire Vladimir Yevtushenkov’s Sistema holding and a former deputy prime minister. Savelyev made no public comments Thursday. 
The removal of Okulov, 57, who spent 12 years transforming the state-controlled carrier from a Soviet-era behemoth to an airline that could hold its own against global rivals, drew criticism from Aeroflot executives alarmed at the consequences of removing a popular chief executive in difficult economic times. 
“Nobody can be the boss forever, but the way [Okulov] is being treated is not right,” said a senior Aeroflot executive who asked for anonymity in order to speak candidly. “He was a popular chief executive, the company has grown under him and to unceremoniously get rid of him like that looks bad to the ranks and to the rest of the world.” 
Aviation analysts said it was too early to say whether the shuffle would have a negative impact on Aeroflot. 
“You have to remember that the airline’s strategy is decided by the board of directors. The CEO is only responsible for carrying it out,” said Oleg Panteleyev, a researcher at Aviaport, an aviation consultancy. “If he is an effective manager, it could even be a plus for the company.” 
Natalya Sorokina, an aviation analyst at UralSib, said a good deal of the airline’s fortunes would depend on whether any major management shakeups would occur after Okulov’s departure. “Some [executives] are likely to be removed, of course, but there are others with a great deal of technical experience who will not be so easy to replace, and they will likely remain,” she said. 
She said Okulov’s removal could be the result of disagreements with the Transportation Ministry about Aeroflot’s direction, namely, whether to place a greater emphasis on the development of domestic or international service. 
Interfax reported late Thursday that Okulov had accepted the post of deputy transportation minister, a relatively low-profile post for a decorated pilot who headed a blue-chip company and has 34 years of experience in civil aviation. 
Earlier this month, Transportation Minister Igor Levitin offered Okulov a job as one of his six deputies. 
Okulov, however, said earlier this month that he was dedicated to Aeroflot and that it was too early to discuss his departure. “[Aeroflot] is not just a transitional phase in my life. It is my life,” he told Vedomosti. 
The management change comes at a turbulent time for Russia’s airline industry, which has been battered by a drop in passenger traffic and falling share prices in the financial crisis. 
Last year, the Moscow city government and Russian Technologies said they would create an airline out of 10 smaller regional airlines that would eventually serve as an alternative to Aeroflot. 
The new airline is being overseen by Sergei Chemezov, who as head of Russian Technologies has sweeping powers over Russia’s industrial complex, including weapons, heavy machinery and now aviation. 
Okulov, however, criticized the creation of the new carrier, calling it a “pyramid scheme.” 
The son-in-law of late President Boris Yeltsin, Okulov was named Aeroflot’s chief executive during Yeltsin’s administration, reportedly with the backing of Boris Berezovsky, a Yeltsin family friend who lives in exile in the U.K. and is a well-known Putin opponent. Okulov joined Aeroflot in 1985 as a division head and was promoted to chairman and CEO in 1997.
While he was CEO, Aeroflot, a member of the Skyteam Alliance, has sought to develop operations outside Russia to expand its route network and base aircraft outside the country to avoid paying import tariffs, Sakhnova said.
“His plans met with disapproval from government officials because they thought it would negatively affect the company’s financial performance,” she said. “There was also an expectation that a national carrier should buy more planes manufactured in Russia.”
Aeroflot agreed to buy six Airbus SAS planes in January and has placed orders for 129 planes, including 22 Boeing Co. 787 Dreamliners and 30 Russian-built Sukhoi Aviation Holding Co. SuperJets for regional routes. The average age of Aeroflot’s aircraft is less than four years, making for one of the youngest fleets in the world.
“Okulov’s move should be seen as a promotion after he succeeded in upgrading the fleet and the company achieved financial stability,” said Yevgeny Shago, an analyst at Ingosstrakh Investments in Moscow.
The airline has a market value of $1.21 billion and net debt of $963 million, according to VTB Bank. During Okulov’s tenure as CEO, Aeroflot went to a 2007 profit of $305 million from a 1998 loss of $211 million.
Savelyev, the new chief, will help improve Aeroflot’s corporate governance and financial management, said Koshlyakov, the deputy CEO. “The change in leadership, however, does not imply a review of questions of strategy,” he said.
Aeroflot has no difficulties servicing its debt and is one of the few major Russian corporations not to seek government funds during the economic decline, Koshlyakov said.
The arrival of Savelyev and the possible shift to more Russian-made aircraft may lead to a drop in Aeroflot’s market share, according to Sakhnova. The company says it carries 45 percent of Russia’s international travelers and controls 13 percent of the domestic market.
“This is the worst time for a change in leadership, especially if you lose someone with the experience of coping with the 1998 crisis,” Sakhnova said.

(SPT, Bloomberg)

TITLE: A Crash Course in Contemporary Art at Garage
AUTHOR: By Max Seddon
PUBLISHER: Special to The St. Petersburg Times
TEXT: In uncertain times for art and the world at large, nothing is safe from speculation and doubt — but doubt is not a word you associate with Francois Pinault. The 73-year-old’s portfolio includes luxury brands from Gucci to Yves Saint Laurent, a 100% stake in Christie’s, the Chateau-Latour vineyard in Bordeaux and a palace in Venice to display his colossal art collection. This collection contains well over 2,500 works, many of them large, unwieldy objects and installations from which innumerable exhibitions could be made. 
The new show from his stable at Garage CCC entitled “A Certain State of the World?” doesn’t stray from superlatives either. With 44 works by 33 artists, including heavyweights like Cindy Sherman, Mauricio Cattelan and Jeff Koons, it is the largest contemporary art exhibition ever to come to Moscow. 
True, as with the Ilya Kabakov retrospective that inaugurated Garage in September, the first thing that strikes the viewer is the sheer size of the 8,500-meter building. But whereas Kabakov’s “Alternative History of Art” was basically an exhibition-as-installation plonked in the middle of the space like a big red box, curator Caroline Bourgeois worked closely with architects to expose the old, red brick walls and dazzling glass-and-metal ceiling. “We had a shock when we came here, it was really extremely beautiful,” she explained. “We said not to hide the space — we didn’t want to put walls in front of the viewer.” 
Her thematic survey of the last ten years’ worth of contemporary art is as impressive as only a show on this scale can be. It begins with Paul McCarthy and Mike Kelley’s “Sod and Sodie Sock Comp. O.S.O.”, which takes up roughly an eighth of the whole garage on its own and nearly all of the first section, “War.”
Comprised of real American army tents, beds and equipment ranging from oatmeal to rubber dildos, the installation is a recreation of a performance done in Vienna, extracts from which are played on the walls. 
“I thought, what with all that’s happened over the last ten years, it’d be interesting to start with the war,” Bourgeois explained. “But it’s also a question of the status of an object of art. The intention is that you are really in the experiment of it: You see all the videos, you understand all the different tools and actions that happened. It really criticizes the idea of power — individual power, both male as well as power that America took after World War II.” 
The next section, “Society of the Spectacle,” is more diverse. Borrowing its title from Situationist theorist Guy Debord’s famous critique of consumer culture, it takes a phenomenological approach to entertainment through works that either examine it or outright celebrate it. Bourgeois’ intent, however, is to raise questions and doubt in the viewer’s mind by juxtaposing the works on their own. “I was very concerned that everyone could get something from this, whether or not they have the background in the theory,” she said. “Anyone can understand it on a different level.” 
This is apparent in the far corner, which is taken up by three large and very different sculptures of hearts — one Tim Noble and Sue Webster work glittering with electric lights, one perfectly smooth Jeff Koons piece, made out of stainless steel and a far cheaper piece by the relatively unknown Joana Vasconcelos largely comprised of plastic knives, spoons and forks. “I wanted to make a discussion of three very different kinds of representation,” Bourgeois explained. “The Noble and Webster is very rock ‘n’ roll, Koons is the perfect object. With Joanna, I was interested in the singularities. You can see it’s from Portugal and that it’s a very cheap object — you can do something very big with something that is nothing.” 
In the homestretch, “Globalization,” Bourgeois expands the theme onto an international scale: Works from superstars like Bill Viola and Takashi Murakami are found together with lesser-known artists from Africa, Asia and South America. Again, the impression is an uneasy, gloomy one, thanks in no small part to the eerie music looping from Francis Aly’s “Song for Lupita.” 
Given the show’s contrary nature and the time required to take it all in properly — the video art alone runs for several hours — it’d be easy to call it pessimistic, were it not for the appendix titled “Time for Reflection.” The path outwards is bathed in an immersive neon glow by one of Dan Flavin’s trademark minimalist light installations, with a bench in the middle to facilitate pauses for thought. 
“It’s a strong experiment for any kind of public,” Bourgeois said. “So I wanted to end with something which speaks about a kind of optimism, belief in beauty — what we can do to do something.” 
Selections from Francois Pinault’s collection is running till June 14. Garage CCC, 19A Ulitsa Obraztsova. Metro Savyolovskaya, then two stops by bus 12 to Ulitsa Obraztsova. Tel. 503-1038.

TITLE: Luxury Sector in Russia Comes Down With a Bump in 2009
AUTHOR: By Amie Ferris-Rotman and Maria Plis
PUBLISHER: Reuters
TEXT: MOSCOW — Kerchiefed women peddle fake designer handbags in front of the pitted Alexander McQueen and Stella McCartney stores, whose signs have been scratched off by hand less than 18 months after their grand openings.
The British designers’ stilettos, diaphanous gowns and Italian-made wool coats were stuffed to the back of the adjoined stores and sold at a 70 percent discount before the financial crisis sealed their doors for good earlier this month.
The Russian capital, notorious worldwide for its exorbitantly priced restaurants, gridlocked traffic of sports utility vehicles and love of excess, is taking a massive hit as recession bites in the world’s fourth-largest luxury buyer.
Analysts say this year’s profits will be slashed by around a third in the country’s luxury clothes and accessories industry, which is estimated to be worth between $4.5 billion and $9 billion. Moscow buys over 80 percent of Russia’s luxury goods.
The sudden sobriety is a far cry from just over a year ago, when Donatella Versace and Tom Ford jetted in to talk of their expansion plans in Russia to enthusiastic crowds.
Now Sweden’s Hennes & Mauritz, famed for its low retail prices, is eyeing the very spot Alexander McQueen occupied, its chief executive Rolf Eriksen told Reuters earlier this month.
Russia’s Crocus Group, which owns a palm tree-lined shopping center selling diamonds and limousines and around 100 luxury boutiques in Russia and Azerbaijan, is also feeling the pinch.
“In Moscow we have started to experience the slowdown and I must say it is substantial,” its Baku-born commercial director Emin Agalarov said in an e-mail.
“Overall, my expectations are very pessimistic so I will not scare anyone with the figures, but trust me in the first half of 2009 we (retailers) will all suffer.”
Cobbled and dainty Stoleshnikov Pereulok, Moscow’s answer to London’s Bond Street, is awash with industry rumors of crisis-spurred shutdowns. A single sheet of paper taped on the whitewashed windows of Vivienne Westwood’s sole Russian store says it is closed for ‘repairs’.
Its London-based spokeswoman said the Russian agent for the store had pulled out of retail.
Russian franchiser Aizel, which manages a group of boutiques including U.S. designers Diane von Furstenberg and Marc Jacobs and British lingerie firm Agent Provocateur said sales at its stores are falling by up to 10 percent.
At fashion shows, it is a similar story.
Organizers of the biannual Russian Fashion Week, which opened on Saturday, said they would scale back the number of shows by 20 percent from October due to fewer participants. That’s a ripple effect from Paris welcoming fewer Russian jets at this month’s fashion week than previous years.
“We decided... to concentrate on quality. With the crisis, you have to put everything you have into production,” said Olga Sorokina, creative director of Russian luxury label Ifre. 
The former model nixed debut catwalk shows in the French capital and Moscow and instead presented her collection of python skin bags, leather bustiers and fur coats in a modest showroom in Paris.
As the chairman of Emanuel Ungaro, Mounir Moufarrige, put it backstage at his Paris show: “Russian clients are buying less.”

RECOVERY PEGGED TO OIL
Analysts say recovery in the luxury market hangs on commodities and energy prices on which the Russian economy heavily depends.
“How quickly commodities and energy prices recover will determine the pace for luxury,” said independent consumer analyst Andrei Verkholantsev in Moscow.
Russia’s equity market has been in recovery mode for the last three weeks as crude oil prices have nudged back from devastating lows below the $40/barrel level crucial to Russia’s budget, fuelling a rise in the ruble rate.
Recent rallies at Moscow’s two main bourses have started to reassure investors, and oil’s rise to over $50 this week has lifted ruble assets.
But the overall economic downturn suggests oil’s recovery will be more of a slow crawl than a sprint to last July’s record peaks of near $150 a barrel.
Magram Market Research, which analyses the Russian luxury market, believes it will get worse before it gets better.
“It’s only the beginning,” warned Marina Malykhina, the firm’s chief executive.
ELITE BREAKS THROUGH
Though the number of Russia’s billionaires halved in the last year, some luxury brands are surviving and even flourishing.
“The behavior of our Russian clients has not changed recently,” the president of fashion at Chanel, Bruno Pavlovsky, told Reuters. “We have witnessed more and more very young women buying their first Chanel bag or accessory.”
He said the century-old fashion house, which recently laid off 200 temporary workers, is about to open a new boutique in the Urals city of Yekaterinburg, home mainly to machine-building and defense industries and one of Russia’s richest and fastest-growing cities.
Chanel is also seeking more business opportunities in Moscow, where it has two shops, and across the country.
Accessories are usually profitable because they take up less store space than clothes, which also come in awkward sizes that tend to need discounting at the end of the season. 
French fashion and leather goods company Louis Vuitton, whose signature monogram brown and gold bags are often flaunted by the Moscow elite, is also opening a store in Yekaterinburg in late April as Russian demand for its accessories is stable.
Over the next few years the firm, part of French luxury goods group LVMH, plans to open a string of new boutiques in the Black Sea resort town of Sochi and the southern cities of Samara and Rostov on Don, its Russian spokesman Dmitry Fedosov said.

TITLE: Ads For
Obama Ice Cream Said To Be Racist
PUBLISHER: Reuters
TEXT: MOSCOW — A Russian advertising agency has used an image resembling U.S. President Barack Obama to promote a new vanilla-and-chocolate ice cream, drawing the ire of human rights groups who said the ad was vulgar.
Ice Cream Plant No. 3 in the Urals city of Yekaterinburg last week launched a new brand named “Duet.”
The poster features a computer-generated caricature of a broadly smiling figure resembling Obama standing in front of the U.S. Congress with the ice cream in the foreground.
The tag line reads: “It’s on everyone’s lips — the Dark is in the White!”
“We wanted to make the print amusing and cheerful, just as joyful and pleasant as the process of eating an ice cream,” Yevgeny Primachenko, deputy creative director of Voskhod advertisement agency, said from Yekaterinburg.
“This is just a vanilla ice cream with a chocolate filling,” Primachenko said. “We decided: Why not use such a great news peg as the election of the first black U.S. president to the White House, while showing no political preferences at the same time?”
Human rights activist Lev Ponomaryov called the advertisement “a vulgar exploitation of some political symbols in pursuit of commercial interests.”
He added, however, “I do not think the person who created this is necessarily a racist ... but our society is xenophobic all the same.”

TITLE: Twenty Ways to Rise Above the Crisis
AUTHOR: By Bulat Stolyarov and Sergei Aleksashenko
TEXT: During the Krasnoyarsk Economic Forum at the end of February, we participated in two days of brainstorming with more than 200 economists, political scientists and business leaders. The following is a list of the top 20 most important anti-crisis measures that resulted from the Krasnoyarsk conference.
1. A major state plan of at least 500 billion rubles ($14.8 billion) a year needs to be drawn up to support residential housing construction because this would have the greatest possible multiplicative effects for the economy. Moreover, emphasis should be placed on thorough land development, low-rise building construction using the latest energy-saving solutions and providing property at the state’s expense to residents of newly settled land plots. State support should account for subsidized mortgage rates and state-provided housing for employees of the public sector, servicemen in the military reserves and people forced to leave Soviet-era industrial cities. The plan also needs to provide free, developed land, state guarantees and subsidized credit rates for developers.
2. The government should determine and announce its priorities for retooling and modernizing the economy through significant investor tax credits. Import tariffs on manufacturing equipment should be abolished, tax holidays on value-added tax for imported equipment should be put off until operations are started and state funds should be used to support leasing companies. 
3. The government should draft and carry out a comprehensive plan for supporting the tourism industry as another area that has a significant impact on the economy. Liberalizing visa regulation procedures and border control is necessary to achieve this.
4. Securing macroeconomic stability and fighting inflation should become priorities for dealing with the recession. The state should announce a 12- to 18-month freeze on natural monopoly fees. Simultaneously, public control must be applied over these monopolies’ expenses to find internal sources for increasing efficiency. 
5. Public discussion of new tax reforms needs to be initiated in the near future. These reforms, among other things, may plug the pension system’s holes in the long term and cut taxes imposed on labor. They also would motivate oil companies to expand production in harder-to-reach places and create new production capacity. 
6. The government should draft and implement a medium-term investment program for developing broadband ADSL Internet access throughout the country. Internet access should be provided in all regional centers and cities with more than 300,000 people within three years and all cities with more than 50,000 people within five years. 
7. With the possibility of the state becoming a shareholder in Russian companies in the next few years through its economic stimulus policies, the principles and goals for using these assets need to be set now. Transferring government shares to the pension fund, which mostly reflects society’s financial interests as a whole, should be reviewed as a possible alternative.
8. The state of Soviet-era industrial cities could pose a serious challenge to the authorities and society. The government needs to act together with businesses to work out a strategic plan for restructuring these cities and creating new jobs in the midst of expected deindustrialization. 
9. State aid needs to be rendered to separate, large-volume investment projects in the final stages of development by granting them state guarantees. 
10. The government needs to increase investment into modernizing education and bolstering new educational standards. 
11. Technical regulations creating significant obstacles for investment need to be reformed.  
12. The government must be able to provide a solution for dealing with toxic assets in the banking system by establishing a “bad bank.” Private investors should be brought in to set up and manage the bank’s operations. At the same time, the government should not force banks under its control to give credit to nonviable businesses during the financial crisis, or toxic assets will grow and turn strategic banks into “bad banks.”
13. The government should work with businesses and the public to find the solutions most relevant to economic growth and a policy for dealing with the recession.
14. The authorities should alter how the state media reports on the economic crisis by aiming for a relevant and open public discussion of substantial economic problems, all in order to play down excessive public expectations. 
15. Parliamentary control should be employed over state companies and state corporations, and information on their operations should be available to the public.
16. The “reset” button on national projects should be hit by focusing on abating social repercussions from the economic crisis and modernizing public infrastructure during the crisis. 
17. The government should alter its stance on returning VAT to honest taxpayers. 
18. The “all-in-one-go” principle should be used for submitting accounting records to tax agencies and extra-budgetary funds. Also, tax returns and similar documents should be made available by e-mail.   
19. The government should draft and implement a new program to get rid of the bureaucracy that exists between the authorities and business. Among other things, this program should be geared toward making it easier to establish and register a business. 
20. Financing needs to be earmarked in the federal budget for the return of 2008 tax advances on profits. 

Sergei Aleksashenko is the chairman and Bulat Stolyarov is the executive secretary of the Krasnoyarsk Economic Forum. This comment appeared in Vedomosti.

TITLE: Dealing With Kremlin Kleptocracy
AUTHOR: By Alexei Bayer
TEXT: At her meeting this month with Foreign Minister Sergei Lavrov, U.S. Secretary of State Hillary Clinton presented him with a now-notorious gift, a mock reset button symbolizing a new dawn in U.S.-Russia relations. But the Russian translation on the button was bungled, and the word meaning “overload” was used instead.
As it often happens, the inadvertent gaffe described the state of relations between the former Cold War rivals better than if it had been done on purpose. The mistranslation revealed that no one among Clinton’s advisers knows Russian. Even as Barack Obama prepares to meet Dmitry Medvedev at the upcoming G20 summit in London, Russia remains off Washington’s radar screen.
It should be kept in mind that Russia became irrelevant to U.S. foreign policy during the second term of Bill Clinton, Hillary Clinton’s husband. Just before Russia’s 1998 default, Washington decided that hopes for Russia’s transformation into a modern democracy were misplaced and that it had turned into a kleptocracy instead. Bill Clinton eased out of a special relationship with Boris Yeltsin and put an end to regular presidential summits.
Under George W. Bush, whose foreign policy adviser Condoleezza Rice was a Russia specialist, Russia actually loomed larger than in the waning Bill Clinton years. While Cold War veterans like former Vice President Dick Cheney were suspicious of Moscow, Bush himself, after famously looking into Putin’s eyes in 2001, imagined that Russia could become a sidekick in a U.S.-led world and a partner in the war on terror.
Such views of Russia were misguided. Today’s Russia can no longer be a genuine foe like the old Soviet Union. Even as it gloats over U.S. military setbacks in Iraq and Afghanistan, it would never dream of giving material support to rebels. Russian kleptocrats don’t want to break with the West. They want to enjoy unimpeded access to their properties abroad and luxury imports at home. But a kleptocracy can’t be a reliable partner, either. Its government officials look after their own interests first and foremost. The outrageous incident at Domodedovo Airport in 2004, when a policeman let suicide bombers board passenger jetliners, is a model of how Russia functions at all levels.
The Obama administration faces a Russia whose transformation into an oil-fueled kleptocracy has been complete. The country is run for the benefit of its bureaucrats. Bribes, payoffs and kickbacks are the only way to live, work and do business. Bureaucrats own or control private companies, and their day job is mainly to steer business to those companies and battle competing bureaucratic clans. United Russia, with its monopoly of power, is patterned on the old Communist Party in everything but ideology. It has none — beyond preserving kleptocracy.
Being a kleptocracy is demeaning, and Kremlin leaders bridle at the suggestion. Unlike Nigeria, Russia has great power ambitions. But a great power needs to stand for something, whereas Russia stands for the enrichment of its parasitic officialdom — hardly an idea to fire anyone’s imagination. Instead of battling corruption at home, the Russian government turns its wrath abroad, demanding respect and obedience from its neighbors. It is a classic case of fighting symptoms while ignoring the cause of the problem.
In the current economic crisis, as inflows of petrodollars thin out, infighting among various bureaucratic clans will heat up. Domestic klepto-wars may force Russia to turn inward or, just the opposite, take a more aggressive stance abroad. In any case, there will be no new beginning in U.S.-Russia relations. What we’ll see instead is a flow of well-meaning but completely meaningless gifts from Washington — like that infamous reset button. 

Alexei Bayer, a native Muscovite, is a New York-based economist.

TITLE: U.S. Ships Sail Ahead Of Korean Testing
AUTHOR: By Jae-Soon Chang
PUBLISHER: The Associated Press
TEXT: SEOUL, South Korea — Two U.S. destroyers capable of tracking and intercepting missiles were believed to be bound Monday for a mission to monitor the North’s upcoming rocket launch.
The USS McCain left the South Korean port of Busan earlier Monday and the USS Chafee was set to depart later in the day, a U.S. military spokesman said. He refused to divulge their destination, but South Korean news reports cited unnamed officials as saying the U.S. ships will monitor North Korea’s rocket launch set for April 4-8.
North Korea says it will send a communications satellite into orbit, but regional powers suspect the North is using the launch to test its long-range missile technology. 
The U.S., South Korea and Japan have warned Pyongyang to drop the plan, saying it would face U.N. sanctions under a Security Council resolution banning the North from any ballistic activity.
Further heightening tensions with Seoul, North Korean authorities detained a South Korean who works at a joint industrial zone in the communist nation for allegedly denouncing Pyongyang’s political system, Seoul’s Unification Ministry said Monday.
The North has told Seoul it will guarantee the worker’s safety, the ministry said without providing details. It is not the first time a South Korean has been detained at Kaesong for similar reasons, and all have been released, the government said.
Two American reporters also are being held in North Korea after being detained March 17 near the country’s northeastern border with China.
Commercial satellite imagery taken Sunday by DigitalGlobe clearly shows what appears to be a three-stage launch vehicle on the east coast launch pad in Musudan-ni on North Korea’s east coast, said Tim Brown, an analyst for GlobalSecurity.org.
However, it remains unclear whether the rocket is a long-range Taepodong-2 intercontinental ballistic missile or a space launch vehicle designed to carry a satellite, Brown said.
North Korea says it will quit the six-nation nuclear disarmament talks if punished with sanctions. The country’s main Rodong Sinmun newspaper reiterated that threat Sunday, saying the talks will “completely collapse” if taken to the Security Council.
Defense Secretary Robert Gates said in an interview broadcast Sunday on Fox television that the U.S. won’t try to intercept the North’s rocket unless an “aberrant missile” were headed to Hawaii “or something like that.”
In Seoul, President Lee Myung-bak also said South Korea opposes any military response to the North’s launch.
“Taking a harder stance: I don’t think that would necessarily be helpful in achieving” Seoul’s objective of ridding the North of its nuclear program, Lee told the Financial Times newspaper.
The remarks by Lee and Gates reflect attempts to be tough with Pyongyang without provoking the regime, analysts said.

TITLE: Tiger Thrills at Bay Hill With Winning Putt
AUTHOR: By Doug Ferguson
PUBLISHER: The Associated Press
TEXT: ORLANDO, Florida — Tiger Woods drove away from Bay Hill wearing the navy blue blazer traditionally awarded to the winner of the Arnold Palmer Invitational. He is more interested in a jacket of a different color, but this was a good start.
Next stop, Augusta National.
Woods couldn’t have written a better script Sunday, even if he’s guilty of plagiarism. For the second straight year at Bay Hill, he made pivotal putts along the back nine and came to the 18th hole needing a birdie to win. From the middle of the fairway, he had 164 yards to the hole — eerily, the same distance as last year.
Sean O’Hair was in the final group, same as last year.
The putt was far easier this time — only about 12 feet up the hill with a slight left-to-right break — but the outcome was predictable to just about everyone except for the lone voice from the bleachers that blurted out, “Playoff.”
Not a chance.
Woods holed the putt, and broke into a routine that also was similar to a year ago. He crouched and backpedaled as the ball rolled to the hole, but instead of slamming his cap to the ground, he punched the air with a roundhouse and hugged his caddie, Steve Williams, who lifted him slightly into the air.
“It feels good to be back in contention, to feel the rush,” Woods said. “It’s been a while, but God, it felt good.”
The final birdie in fading sunlight gave Woods a 3-under 67 and a one-shot victory over O’Hair, who had a five-shot lead going into the final round. It matched Woods’ largest comeback on the PGA Tour, and while it wasn’t quite as stunning as his rally at Pebble Beach nine years ago, it was no less special.
Woods won for the first time since he returned from reconstructive knee surgery a week after his U.S. Open victory, which kept him out for eight months.
He had two indifferent performances at World Golf Championships — one match play, one stroke play — and there were questions over whether he would be ready for the Masters.
Might the blue jacket help him win a green one?
“It does, a lot,” Woods said. “This win definitely validates all the things I’ve been trying to do.”
He hit the ball beautifully two weeks ago at Doral and couldn’t make a putt. He scraped it around for the better part of three days at Bay Hill and was saved by his short game. Everything fell together in a final round Sunday that was delayed for two hours by rain.
The victory was helpful, but it was the manner in which he won that excited Woods.
For the first time since Torrey Pines, he felt his heart race and his adrenaline rush. After spending four hours trying to catch up to O’Hair, he spent the final hour trying to hang on.
It wasn’t without some drama.
O’Hair, who made only one birdie in his round of 73, was clinging to a one-shot lead on the par-3 14th when Woods caught a plugged lie under the lip of the bunker. He blasted out to just over 12 feet, while O’Hair had a 15-footer for birdie.
“Sean looked like he made his putt, and if he makes and I miss, all of a sudden there’s three shots,” Woods said.
O’Hair missed. Woods made his par putt.
And on the next hole, Woods drained a 25-foot birdie putt to tie for the lead.
The sun began to dip behind the trees, lowering the temperatures, and O’Hair believes that might have cost him. He had a 7-iron from the 16th fairway that was going right of the flag when it fell short and tumbled into the water. Woods hacked out of the rough and hit a splendid wedge to 3 feet to save par, giving him a one-shot lead.
“I think what happened is when the sun was going down a little bit, I guess that kind of proved to me that the ball wasn’t quite going as far,” O’Hair said.
Woods could relate. He posed over a 4-iron that was headed right for the flag when it came down short and into another plugged lie under the lip of a bunker. This time, Woods made bogey and they were tied again.
It came down to the final hole, which is Woods’ domain — especially at Bay Hill.
He won with a birdie on the 72nd hole for the third time at the Arnold Palmer Invitational. There was a 15-foot bending birdie to beat Phil Mickelson in 2001, and the 25-footer to beat Bart Bryant last year.
Woods, who finished at 5-under 275, won for the 66th time in his career. And while the finish was so similar to his Bay Hill victory last year, this was different.
“Last year ... there wasn’t any big comeback or anything. I was out there just competing as usual,” Woods said. “This time, it was a little bit different. I hadn’t been in the mix since the U.S. Open, so it was neat to feel the heat on the back nine again.”
And did that heat feel any different?
“No it didn’t,” he said. “It’s like Stevie was saying out there, this feels like we hadn’t left. You can understand sometimes when some of the older players haven’t been in contention in a while and they come back, and then all of a sudden they put themselves in contention and then they win. You just remember how to do it.
“It hasn’t been that long for me, but you just have that feel of what to do and it’s a matter of getting it done.”
Woods got it done, as always.
It was his sixth victory at Bay Hill, the fourth tournament he has won that often. And it kept Mickelson from having a chance to overtake him at No. 1 in the world rankings this week.
But that’s of small importance to Woods. He is more interested in silver trophies and green jackets.
For now, navy blue will have to suffice.

TITLE: 19 Dead in Pakistani Police Academy Siege
AUTHOR: By Babar Dogar
PUBLISHER: The Associated Press
TEXT: LAHORE, Pakistan — A group of gunmen attacked a police academy and rampaged through it for hours Monday, throwing grenades, seizing hostages and killing at least eight police and three civilians before being overpowered by Pakistani security forces in armored vehicles and helicopters, authorities said.
Six militants were arrested and eight others died in the eight-hour battle to retake the facility on the outskirts of this city in eastern Pakistan, said Rao Iftikhar, a top government official in Punjab province.
Officials said more than 90 officers were wounded by the attackers, some of whom wore police uniforms.
The highly coordinated attack underscored the threat that militancy poses to the U.S.-allied, nuclear-armed country and prompted Pakistan’s top civilian security official to say that militant groups were “destabilizing the country.”
The attack on the Manawan Police Training School began as dozens of the officers carried out morning drills. About 700 trainees were inside at the time.
“We were attacked with bombs. Thick smoke surrounded us. We all ran in panic in different directions,” said Mohammad Asif, a wounded officer taken to a hospital. He described the attackers as bearded and young.
“Some of the attackers are wearing (police) uniforms,” officer Ahsan Younus said. “They have also taken some of our policemen hostage.”
TV footage showed several frightened police officers jumping over the wall of the academy to flee the attack. Some crouched behind the wall of the compound, their rifles pointed in the direction of the parade ground where police said the attack took place. Farther back, masses of security forces and civilians monitored the tense standoff, taking shelter behind security and rescue vehicles.
The forces had surrounded the compound, exchanging fire in televised scenes reminiscent of the militant siege in the Indian city of Mumbai in November and the attack on Sri Lanka’s cricketers earlier this month in Lahore.
Armored vehicles entered the compound while helicopters hovered overhead. At times, explosions rocked the scene.
At one point, security forces cornered several militants on the top floor of a building on the compound, where the gunmen held about 35 hostages, Iftikhar said.
“The eight hours were like eight centuries,” said Mohammad Salman, 23, one of the hostages. “It was like I died several times. I had made up my mind that it was all over.”
Police captured one of the suspected gunmen six hours after the initial assault, dragging the scruffy, bearded man to a field outside the academy and kicking him.
Iftikhar confirmed that six militants were arrested. Of the eight dead, two blew themselves up, he said. Army spokesman Major General Athar Abbas said eight police were killed, while Punjab police spokesman Athar Khan said three civilians were among the dead.
On the roof of the building where hostages were kept, an AP photographer saw body parts, blood and spent ammunition strewn about, and several police officers — apparently hostages — came out with their hands above their heads in fear.
As the siege ended, black-clad Pakistani commandos fired their guns in the air in celebration at the top of the building, shouting “God is Great!” and “Long live Punjab police!”
No militant group immediately claimed responsibility for the attack.
Pakistan has endured scores of suicide bombings and other attacks in recent years, and it faces tremendous U.S. pressure to eradicate al-Qaeda and Taliban insurgents on its soil. Most of the violence occurs along the country’s northwest border with Afghanistan, but attacks have occurred in all the major cities.
Monday’s attack occurred close to the Indian border.
The attacks pose a major test for the weak, year-old civilian administration of Pakistani President Asif Ali Zardari, which has been gripped with political turmoil in recent weeks. The Obama administration has warned Pakistan that militancy threatens the nation’s very existence, while U.S. officials complain that the country’s spy agencies still keep ties with some of the insurgent groups.
Interior Ministry chief Rehman Malik told state-run TV that Pakistan’s police are not equipped to fight the wave of terrorism.
“In our country, at our different borders, arms are coming in, stinger missiles are coming in, rocket launchers are coming in, heavy equipment is coming — it should be stopped,” Malik said. “Whoever the anti-state elements are, they are destabilizing the country.”
Lahore, a vibrant metropolis considered by many to be Pakistan’s cultural capital, seems to be an increasingly alluring target for militants. 
The cricket attack in early March, when gunmen ambushed the visiting Sri Lankan team in a crowded traffic circle, sparked a battle that left six police officers and a driver dead and wounded several players.
Those gunmen escaped unscathed and have not been publicly identified.
The brazen assault using commando-style tactics also was reminiscent of measures used by the militants who laid siege to several parts of Mumbai last year for three days. 
The Sri Lankan attack also had similar features — including heavily armed, backpack-toting gunmen — but it was much quicker. Observers have since speculated that those attackers might have hoped to grab hostages as well.
India has blamed the Pakistani militant group Lashkar-e-Taiba for the Mumbai assault, and Pakistan has taken several of the outfit’s alleged leaders into custody. Lashkar-e-Taiba, which is largely based in eastern Punjab province, has denied involvement in either Mumbai or the cricket team attack.

TITLE: Button Wins F1 Season Opener
AUTHOR: By Chris Lines
PUBLISHER: The Associated Press
TEXT: MELBOURNE, Australia — Jenson Button won the season-opening Australian Grand Prix on Sunday, beating teammate Rubens Barrichello and giving Brawn GP a 1-2 finish in its first race.
Button led from start to finish, with the race finishing under caution following a late crash.
Defending Formula One champion Lewis Hamilton finished fourth but was elevated to third by a post-race stewards’ decision that penalized Toyota’s Jarno Trulli for overtaking under safety-car conditions.
It was the first time since 1977 — when Jody Scheckter won for Wolf — that a team had won its debut in F1, and the third time that a team finished first and second in its first attempt. Alfa Romeo did it in the first ever Grand Prix in Britain in 1950, and Mercedes did it at the French GP in 1954.
It was only the second GP win for Button, who is in his 10th year. He averaged 195.775 kph at the 5.3-kilometer Albert Park circuit and finished in 1:34:15.784.
The win capped a remarkable turnaround for the former Honda team, which was at risk of disbanding in the offseason when the Japanese automaker pulled out of F1. Team principal Ross Brawn took over the team, which benefited from development spending for 2009 by its former owner last year.
“This is a fairytale ending for the first race,” Button said. “Some people may say it’s a pity the race finished under the safety car but I don’t care, I won the race and that’s all I care about.”
Further boosting Brawn GP spirits was knowing that the past three winners of the Australian GP went on to win the championship.
Red Bull’s Sebastian Vettel and BMW’s Robert Kubica collided while running second and third with only four laps to go, bringing out the safety car. Vettel was fined $50,000 for continuing around the track on three wheels.
Hamilton took third despite starting 18th, finishing ahead of Toyota’s Timo Glock, Renault’s Fernando Alonso, Nico Rosberg of Williams, Toro Rosso’s Sebastien Buemi — in his first race — and his teammate Sebastien Bourdais.
Buemi became the fourth-youngest driver in history to earn a championship point.
For the second straight year, Ferrari finished without a point in the season opener. Felipe Massa was running in third before his steering went on lap 45, three laps after Kimi Raikkonen spun out.
“It’s true we are not where we want to be, so we will need to do some work to improve it,” Raikkonen said.
A crash at the first corner ended the race for McLaren’s Heikki Kovalainen, and forced BMW’s Nick Heidfeld, Red Bull’s Mark Webber and Force India’s Adrian Sutil to pit, effectively ending their chances.

TITLE: Madonna Close To 2nd Adoption
AUTHOR: By Celean Jacobson
PUBLISHER: The Associated Press
TEXT: LILONGWE, Malawi — A Malawian judge held a closed-door hearing Monday on Madonna’s application to adopt a second child from this southern African nation but delayed ruling on the matter until Friday, a court official said.
The 50-year-old pop star spent about an hour in court Monday in the Malawi capital of Lilongwe. Court official Thomson Ligowe confirmed that Madonna’s adoption application was adjourned until Friday but said he could not reveal any more details.
Monday’s court docket listed only the child’s name — Chifundo James, which means “Mercy” in a local language. 
A Malawian welfare official and another person involved in the adoption proceedings say the girl is about 4 years old and her unmarried mother died soon after she was born. The girl’s father is believed to be alive but no other details were available.

TITLE: 19 Killed in Ivory Coast Stadium Stampede
PUBLISHER: Agence France Presse
TEXT: ABIDJAN — Fans stampeded in an Abidjan stadium during a World Cup match featuring top European-based stars on Sunday killing at least 19 people and injuring 132, a minister said.
Hundreds of fans with tickets tried to force their way into the Houphouet-Boigny Stadium in Ivory Coast’s biggest city as the match against Malawi started, a medical source told AFP.
Police were said to have fired tear gas to control crowds who had wanted to see top European-based stars taking part and the stampede was followed by a wall collapse, according to the source.
Many casualties were treated at the stadium as the match went ahead and the worst injured were taken to the Treichville hospital in Abidjan and a military hospital.
Sports and Youth Minister Dagobert Banzio said on national television that 19 people were killed and 132 injured in the disaster.
Interior Minister Desire Tagro said panic broke out just as the match, which was attended by President Laurent Gbagbo, was about to start at 5:00pm (1700 GMT).
“Large numbers of supporters came to the stadium,” he said.
“There was a stampede because the match was about to start, everyone absolutely wanted to get in,” said the minister.
Tagro called on the public to “remain calm”. He said the government “condemned” the incident and had started an inquiry into what caused the deadly crush. He said the dozens of injured were being helped.
The recently renovated stadium has an official capacity of 35,000 but was packed with fans eager to see Ivory Coast’s European-based stars such as Didier Drogba and Salomon Kalou of Chelsea and Kolo Toure and Emmanuel Eboue of Arsenal play in the World Cup qualifying match.
Drogba scored twice and Kalou once in the game which the hosts won 5-0 as the drama unfolded.
Most of the Ivory Coast national team play for clubs in England, France and other top European championships.
The interior and sports ministers held an emergency meeting with leaders of the Ivory Coast Football Federation (FIF) late Sunday following the disaster, FIF president Albert Kakou Anzouan said.
Hundreds of people have been killed in stadium riots and stampedes in Africa over the last decade.

TITLE: Beckham Happy To Be Super-Sub
AUTHOR: By Kevin Rawlinson
PUBLISHER: Agence France Presse
TEXT: LONDON — David Beckham insists he is happy to play a bit-part role for England, despite becoming his country’s most capped out-field player.
Beckham passed Bobby Moore’s previous record of 108 caps when he came on as a half-time substitute in Saturday’s 4-0 friendly win over Slovakia.
On his 109th appearance in an England shirt, Beckham proved his continued worth to the side, setting up Wayne Rooney with a cross for England’s second goal.
England faces Ukraine in a World Cup qualifier match on Wednesday.

TITLE: Ex-U.S. Officials Must Face Torture Charges
AUTHOR: By Paul Haven
PUBLISHER: The Associated Press
TEXT: MADRID — Six former Bush administration officials accused in a Spanish complaint of sanctioning the torture of terror suspects should come to Spain to face justice, a human rights lawyer urged Monday.
If they are innocent they shouldn’t be afraid, lawyer Gonzalo Boye, one of the rights lawyers behind the complaint, told The Associated Press in an interview.
The case against the American officials — including former Attorney General Alberto Gonzales and former Undersecretary of Defense Douglas Feith — was brought by human rights lawyers before Spain’s investigative judge Baltasar Garzon, who has sent it on to prosecutors to see if the charges merit a full investigation.
It alleges the men gave legal cover to the torture of terrorism suspects at Guantanamo Bay, Cuba, by claiming that the U.S. president could ignore the Geneva Conventions and by adopting an overly narrow legal definition of torture.
In addition to Gonzales and Feith, the complaint names former Vice President Dick Cheney’s chief of staff David Addington; Justice Department officials John Yoo and Jay S. Bybee; and Pentagon lawyer William Haynes.
Spanish law gives its courts jurisdiction beyond national borders in cases of torture or war crimes, based on a doctrine known as universal justice, though the government has recently said it hopes to limit the scope of the legal process.
The only one of the accused to comment publicly has been Feith, who said Saturday that the charges “make no sense.”
“I would recommend that Mr. Feith first of all read the complaint, and secondly that he get a very good lawyer,” Boye said. “If he is so sure of what he is saying — then the address of the national court is #22 Genova Street, second floor.”
Prosecutors must now decide whether to recommend a full investigation. Still, Garzon is not bound by their decision.
The judge has not commented since the complaint became public Saturday. On Monday, he hustled up the steps of the National Court without speaking to journalists.
Deputy Spanish Prime Minister Maria Teresa Fernandez de la Vega said the government would have no comment on the merits of the case, which she said was in the hands of an independent judiciary.
“It is the courts, and only the courts, that must make a decision on this,” she was quoted as saying in Monday’s Publico newspaper.
Still, the proceedings could not have come at a more delicate time for Prime Minister Jose Luis Rodriguez Zapatero, who has been hoping for better relations with the United States. The Bush administration never forgave Zapatero for pulling Spanish troops out of Iraq, and he was the only Western European leader never invited to the White House.
Zapatero is scheduled to meet President Barack Obama for the first time on April 5 during a summit in Prague.