SOURCE: The St. Petersburg Times DATE: Issue #917 (85), Thursday, November 6, 2003 ************************************************************************** TITLE: Kremlin Suggests Yukos Will Lose Oil Field Licenses AUTHOR: By Valeria Korchagina PUBLISHER: Staff Writer TEXT: MOSCOW - The government turned the screws on Yukos yet again Wednesday, saying it was "practically inevitable" that production licenses to an unspecified number of oil fields will be taken away from the company. "The ministry's actions [against Yukos] will be swift and precise," Natural Resources Minister Vitaly Artyukhov told the official government newspaper Rossiiskaya Gazeta. "Full or partial noncompliance with license obligations - and in the current situation it is practically inevitable - will immediately lead to - license-revoking," he said. "If need be, we will act pre-emptively. The reasons are obvious: The company, whose controlling stake is under arrest, is not likely to be a suitable partner to work with a federal licensing body." The remarks were published just hours after President Vladimir Putin left for Italy for Thursday's summit with the European Union, which is alarmed by the recent arrest and imprisonment of Yukos founder Mikhail Khodorkovsky. Brussels on Tuesday said it wanted "clarifications" from Putin about his commitment to private property rights in light of the Yukos affair. When asked later Wednesday about Artyukhov's remarks, Putin said he was against taking away Yukos' operating licenses because it "would give the impression that the state was trying to shut down the company." Putin said the economic consequences of such a move "would be negative and would have no basis in law." But he also gave the impression that he might not intervene if Artyukhov carries through with his threat: "I expect that the state will abstain from actions of this kind," he said at a joint news conference with Italian Prime Minister Silvio Berlusconi. Artyukhov's remarks came as a surprise to both Yukos and the investment community, sending the company's battered share price sharply lower. In a conference call with Western investors, Yukos' chief financial officer Bruce Misamore called the development "extremely strange," adding that he didn't know if it were a reason for concern. Market analysts were more concerned than Misamore, pointing out that Artyukhov's plan of attack would directly contradict Putin, who has stated several times that property rights, including minority shareholders' rights, will not be violated in the course of the Yukos investigations. "This is shocking and outrageous," said Christopher Granville, chief strategist at United Financial Group. "The question now is: Are the president's words on protecting property rights only words? Or will they be backed by the leadership's actions?" said Stephen O'Sullivan, a colleague of Granville's at UFG. If Artyukhov's threats are realized, particularly in light of Khodorkovsky's resignation as head of Yukos this week, the blow to Russia's investment climate would be dramatic, O'Sullivan said. "There are other countries to invest in," he added. "Until today, many investors, both foreign and domestic, believed that the whole affair was about Khodorkovsky. But now that licenses are being questioned it looks like that might not be the case," he said. Analysts said it is virtually impossible for oil and gas companies to comply fully with each of their licenses, which can run into the hundreds for some companies. Some of the most frequent license violations include failing to produce according to schedule and flaring an excessive amount of "associated gas," which is a byproduct of oil extraction. Companies often burn this gas instead of selling it because they cannot get access to state-controlled gas monopoly Gazprom's pipeline network. "So why Yukos?" O'Sullivan asked. "And how do we know that LUKoil, Surgutneftegaz or even Gazprom, who simply inherited its licenses from Soviet times, are not going to be next?" Yukos said there is nothing in Russian law that would prevent a company from meeting the requirements of its licenses just because its shares are frozen. Prosecutors last week sequestered a 39.6 percent stake of Yukos as "collateral" for the $1 billion Khodorkovsky, Platon Lebedev and other Yukos shareholders allegedly cheated the state out of via tax evasion, fraud and forgery. Yukos spokesman Alexander Shadrin said the Natural Resources Ministry checked his company's compliance with its license agreements just a few months ago and found no serious violations. The current inspection of the Yukos licenses was launched at the request of the Prosecutor General's Office. "We hope that the current inspection will be conducted within the framework of the law," Shadrin said. Whatever happens, one thing is clear - life will never be the same for Yukos again, said Stephen Dashevsky of investment bank Aton. In essence, he said, Artyukhov's threat indicates that the forces behind the attack on Yukos were not convinced that Khodorkovsky's resignation meant his complete detachment from the company. Kremlin-connected political analyst Sergei Markov agreed. He said that even considering Putin's remarks, Yukos' future as a company is far from clear. "The president did say that the results of privatization would not be reversed, but I wouldn't guarantee the ownership structure of one given company," he said. What Putin needs, according to Markov, is patriotic owners and managers in big business - "regardless of whether they are Russians or Americans." "The state is so weak that big businesses can simply outplay it and win when it comes to issues like tax optimization. Putin needs managers who will not play hide-and-seek, who will pay taxes and contribute to the country voluntarily." TITLE: Institute Sale Irks Scientists AUTHOR: By Irina Titova PUBLISHER: Staff Writer TEXT: About 200 scientists from the All-Russia Science and Research Technology Institute (VNITI) protested the sale of the institute building in St. Petersburg Tuesday. The building of the four-story institute, famed for developing the country's most advanced defense products, was unexpectedly sold last August by its former director Dmitry Zuber for $620,000, the institute employees said. "Our employees are in shock," said one of the institute's scientists, who didn't want to be identified, on Wednesday. "Zuber didn't consult anyone, neither the board of directors nor the staff," she said. At the protest in front of the institute, which is located in the central city on the Petrogradskaya side of the Neva River, the scientists appealed to Governor Valentina Matviyenko to annul the sale as illegal and allow them to return to their former working areas. However, on Wednesday there was still no reaction to their demand from the city administration. As a result of the sale, 600 of the institute's employees were moved to the fourth floor and were also allowed to occupy half of the second floor. They were also told to pay rent of $18 per meter a month. "If the institute has to pay such rent, then it will hardly survive, and we'll most probably have to move out to our branch in the village of Gorelovo in the Leningrad Oblast," the scientist said. VNITI was founded in 1947 by the Soviet defense ministry as a unique scientific institute which has no analogies abroad. It used to provide technical support and organization for production of the country's tanks, combat vehicles and armored machinery. Later, the institute developed ways of using their know-how in civil industry. The institute is now a joint stock company (AO) and develops new technologies and equipment for manufacturing highly complex components of machinery. It is impossible to produce such parts on standard equipment. The institute takes part in solving the state's most important problems, such as producing bar pumps for oil extraction which are acknowledged to be among the best in Russia. The swords and fencing foils produced by the institute are recognized as the best in the world. VNITI also developed elevators for wheelchairs used by handicapped children, and many other products used in the medical, electric and mining fields. The institute's employees could not say exactly who bought the building, which is now taking in a number of private firms. They said the building was sold illegally and at a very low price. According to them, when announcing the sale, Zuber said that "this is how he saved the institute from bankruptcy." However, the institute's employees said they never heard of the institute's bankruptcy risk, adding that recently VNITI repaired its roof and installed new windows throughout the building. When Zuber released the news, the board of VNITI's directors temporarily dismissed him, and Zuber went on vacation until next spring. "I think Zuber had some kind of blackout when he sold the institute," said one of the institute's engineers, who has worked there since 1970, and who also asked not to have her name mentioned. She said Zuber had worked at the institute since 1961, and as VNITI's director for the last 10 years. Therefore, everyone was surprised he could do such a thing to his own institute. Zuber holds the title of St. Petersburg's Honored Citizen, next to Nobel Prize winner Zhores Alfyorov and a number of other very respected people in St. Petersburg. He is the creator of many inventions. The scientists interviewed apologized for asking not to mention their names, saying they feared for their future at the institute. TITLE: Victims of Soviets Evaluate Pros, Cons of Probe AUTHOR: By Galina Stolyarova PUBLISHER: Staff Writer TEXT: With the Yukos affair in full swing, St. Petersburg human rights group Memorial organized and hosted a discussion Tuesday between former political prisoners, historians and human rights advocates aiming to distinguish between potential dangers and side-effects of the case and speculation about it. Earlier this week Memorial issued an official statement in which the organization branded the arrest of Yukos's former president Mikhail Khodorkovsky as politically motivated and condemned the methods of the General Prosecutor's Office. But Memorial's office on 23 Ulitsa Rubinsteina was boiling on Wednesday night and opinions about the Yukos affair varied drastically between the former fellow dissidents. Rostislav Yevdokimov, a political prisoner from 1983 to 1987, launched a fierce attack on the oligarchs as such. "What political persecution are you talking about? Political persecution is only possible against people who have their own political views, like us, former political prisoners, sitting here now," he said. "But Khodorkovsky is a different case. Six months ago he admitted to possessing $3 billion, last month it was already $8 billion - and everyone swallowed it. To me, the Yukos affair is a sheer criminal case." But Boris Mirkin, a political prisoner from 1984 to 1987, warned Yevdokimov against counting the money in other people's pockets. He also said the activities of the Prosecutor General 's Offices have been prompted by the security services and are part of the state's get-rich-quick strategy. "People like Khodorkovsky are not sinless but they are successful in what they do," he said. "They can run their businesses successfully, while the security service are used to smashing the money out of anyone. Now, they are acting - via the prosecutor's office - in their typical manner." Boris Pustyntsev, head of another local human rghts group, Citizens' Watch, concurred. "Whether we like it or not, the only thing we are left to do is to amnesty economic crimes," he said. "Yes, the oligarchs made their money in unjust and unfair ways, but what on earth did you expect after seven decades of totalitarian regime? We are still paying the price." Memorial's Sergei Khokhayev, a political prisoner from 1965 to 1974, called the Yukos case a victory for bureaucrats over oligarchs, while another member of Memorial, Vyacheslav Dolinin, reminded the gathering of Khodorkovsky's long Communist past. "Hey, let's roll a couple of decades back," he said. "We were serving our terms for opposing the regime, and where was Mr. Khodorkovsky? He was first secretary of the Komsomol committee of Moscow's Bauman district in Moscow. I don't feel sorry for him." "Whoever wins the battle, ordinary Russians are not going to get rich, that is for sure," Mirkin resumed. "They have never really been taken in account and I don't see whay they suddenly would." Yury Vdovin of Citizen's Watch saw a clear parallel between the Yukos affair and the Stalin era. "I would like to remind you that the bloody career of Andrei Vyshinsky [prosecutor general under Stalin's rule] started with a similar 'fight with economic crimes' in Kharkov back in the 1920s," he said. "Of course, those times can't return now, but the tendency is more than alarming." At least one participant of the discussion openly admitted being totally confused. "I am very sorry to say this but I just don't understand what is going on," said local human rights advocate Viktor Korsakov. "And if I can't get to the bottom of the situation then, sadly, I can't offer any reasonable solution." In the meantime, according to a poll conducted this week by the Moscow-based ROMIR-monitoring, 54 percent of Russians approve the arrest of Khodorkovsky, with another 29 percent being indifferent to the case. Only 13 percent of respondents said they see the arrest as negative. Fifty percent of respondents believe that the Yukos affair won't have any negative consequences on the Russian economy. Twenty-nine percent are afraid that the affair will result in drying up of foreign investment but 11 percent are convinced that investment will increase, according to the poll. As for the arrest itself, 28 percent said the major reason was that Khodorkovsky broke the Russian law. A further 24 percent believe he was arrested for violating the corporate rules within Yukos. Only 11 percent called the case political persecution, according to ROMIR. Also on Tuesday, Memorial opened a new exhibition entitled "Vorkuta-Leningrad" that focuses on the history of opposition in the Komi Republic, a region with one of the highest concentration of camps in the territory of Russia from the 1950s to the 1980s. Occupying two halls of Memorial's office, the display highlights personal stories of several dozen dissidents and political prisoners. "What you see here is all very private and personal, every photograph," said Irina Flige, head of Memorial's historical branch. "Unlike most other museums making exhibitions on the topic, we didn't include any items presenting the state. No verdicts, no posters, they herald the criminal regime and kill the atmosphere." The life story of political prisoner Igor Ogurtsov, who served 15 years in prison and then subsequently three more in a camp, made a display on one of the stands. Speaking at the exhibition's opening Tuesday, he stressed the particular importance of Memorial's activities in the current political situation. "Everyone needs such exhibitions, but those who need them the most are the younger generation," he said. "They grow up seeing that evil and crime goes unpunished and even flourishes. We need to explain that this is wrong and why it is wrong." TITLE: Berlusconi Defends Putin PUBLISHER: Combined Reports TEXT: ROME - Italian Prime Minister Silvio Berlusconi came to the aid of President Vladimir Putin on Wednesday over criticism the Russian leader has faced over the attack on imprisoned billionaire Mikhail Khodorkovsky's empire. Putin, on a two-day state visit to Italy, including a meeting with Pope John Paul II and a summit with the European Union on Thursday, came under international pressure over the arrest of Khodorkovsky for fraud and tax evasion in what critics allege is a politically driven probe. Berlusconi, a personal friend of the Russian leader, said Putin had explained the Yukos case and that it did not seem a political use of power. The conservative Italian leade is a billionaire businessman who has faced numerous court cases. His forces in parliament passed a law this year that blocked his trial on corruption charges. "In Italy, I have fought to ensure that there is not a political use of the judiciary," he said. "President Putin explained to me the motivation of the (Russian) judiciary. From the picture he painted, I don't think you can talk of a political use of power." TITLE: Yabloko Coy on Call To Merge With SPS AUTHOR: By Oksana Yablokova PUBLISHER: Staff Writer TEXT: MOSCOW - In the wake of the attacks on Yukos, Union of Right Forces co-leader Anatoly Chubais urged liberal rival, Yabloko party leader Grigory Yavlinsky, to merge the forces they represent ahead of next month's State Duma elections. In a letter published on the Union of Right Forces, or SPS, web site on Wednesday, Chubais urged Yavlinsky to put personal ambitions aside and start to work for a merger in the face of a threat to the country's democracy. "The events which took place in Russia in recent weeks have revealed dangerous symptoms of a possible revision of the country's political course," Chubais wrote. Yabloko Duma Deputy Sergei Mitrokhin turned the merger call down flat, accusing Chubais, who heads the electricity monopoly Unified Energy Systems, of leading a smear campaign against the party using UES financial resources. A spokesperson for Yavlinsky said that he had read the letter and was thinking over the proposal. In his letter, Chubais conceded it was "no secret that our personal relations are the stumbling block in drawing together and possible merger of Yabloko and SPS parties," but he urged both parties to focus on the similarities rather than the differences. "Both you and I see Russia's return to dictatorship as a catastrophe. This is the most weighty reason for the unification," the letter read. The two parties have been touted for a merger since 2000. Most merger calls have come from SPS leaders, but Yabloko has so far declined to move beyond talks, citing Chubais's presence at the helm of SPS as the main obstacle. Yavlinsky said Wednesday that two parties would try to coordinate their efforts in parliament, as they did in the past. He said that attacks on Yukos, which has provided financial assistance to both parties, represents "a good reason for the unification of all democratic forces against lawlessness," but declined to be drawn further on the question of a merger. Later Wednesday, Chubais said that he felt more hopeful than before that a merger could work out, though not for the December elections, adding that Yavlinsky was quite capable of "drawing new conclusions out of the situation." "For the first time I heard from Grigory Alexeyevich [Yavlinsky] that he agrees with Chubais in assessing the existing situation," Chubais told reporters. "Do you remember that Yavlinsky ever agreed with Chubais before? I don't." Yavlinsky and other Yabloko politicians dismissed Chubais's calls to unite behind a single presidential candidate in the March presidential elections. Yavlinsky also said that assistance for his party from Yukos has stopped since Yukos founder Mikhail Khodorkovsky's arrest on Oct. 25 on charges of fraud and tax evasion. Yury Korgunyuk, a political analyst with the Indem think tank, suggested that Chubais was not really after a merger, but campaigning for his own party, which he said only benefited from merger calls. "Yabloko lacks organizational flexibility and [therefore] has found itself in a position with no way out," Korgunyuk said. "If it agrees to work for unification with SPS it will lose its last remaining instrument of leading its own campaign, which was criticizing SPS. "On the other hand, this is the case when their positions are absolutely identical." Yavlinsky's spokeswoman Yevgenia Dillendorf said that he had read the letter and would need to think it over. "As for now, we will focus on the creation of an independent Duma, with a considerable representation of democratic forces," Dillendorf quoted Yavlinsky as saying. "We would like to have a democratic partner like SPS [in the next Duma]." TITLE: Center Offers Wayward Youths Hope AUTHOR: By Irina Titova PUBLISHER: Staff Writer TEXT: A new workshop designed to put 280 troublesome St. Petersburg teenagers on the right path opened on Tuesday. The city's fourth Novoye Pokoleniye, or New Generation, workshop is at Ulitsa Aviakonstruktorov 31/2, located in the city's Primorsky district. The workshop will provide education, food and work - producing children's board games - to youth aged 14 to 18 years, most of them with a police record. Their crimes range from petty theft to murder. Security is a concern at the centers, but the youth generally behave well. Security guards work in the centers and many of the teachers are former policewomen who have worked with troubled young people before. The youth do not sleep at the centers, but arrive at 9 a.m., work until 5 p.m., and then study from 5 p.m. until 7 p.m. Some of the young people have never been to school, others have completed only a few grades, and many have lived on the street for long periods of time. Almost all of them are estranged from their families. Sergei Konstantinov, 17, lives with his grandfather. He said his mother had abandoned him and gone "to live in another place." He does not know his father. Konstantinov said he was directed to the New Generation center because he didn't attend school. "It's nice here," he said. "We get good food, an education, earn money, go to summer camps, excursions, and the teachers are nice." His lists of the positive aspects of the center: good food, an opportunity to earn money honestly and safely, and the teachers' supportive attitude. These are the main reasons the teenagers, who have poor school attendance records, give for staying at New Generation centers. "These children often have nothing to eat at home, therefore boarding and a chance to make money becomes very important for them," said Mikhail Dmitriyev, general director of New Generation. The New Generation enterprise was founded in 1993 with the support of City Hall's youth committee. New Generation centers unite 950 teenagers, who get three free meals a day and earn from 600 to 8,000 rubles ($20 to $267) a month. The centers produce 14 types of developmental games for children, which are sold throughout Russia. The centers are designed not only for teenagers' work but also for their rest. Thus, the new center is equipped with a table tennis hall, a gymnasium, a cinema hall with a big, modern TV screen, a cafeteria, and a medical clinic. Vladimir Spirin, the head specialist of the youth committee, said the main reasons the children end up in needing such support are family breakdown and a feeling of failure. "When these children see that their family is struggling, that nobody pays attention to them at school, they find themselves in opposition to the rest of society, and become aggressive toward it," Spirin said. "These centers are needed so that children can do something they can succeed at and make money. The staff is trained to take this into account and treats them with particular care," he said. This year New Generation also enrolled experimental groups of children aged 12 and 13. The new center has 20 such youngsters. Some of them used to be street children, missing school and having problems with their families. Alexei Rudakov, 13, said instead of attending school he used to go to a computer club or for a walk. "I didn't go to school because it was difficult to study there," Rudakov said, explaining that because he was behind the rest of the class he was treated as an outsider. Yelena Markasova, deputy director of New Generation, said the children study under a specially developed remedial program in the centers' schools. Despite the opening of the new institution, the centers are full - the city has 8,500 teenagers with a police record, she added. TITLE: IN BRIEF TEXT: Rybakov Registered ST. PETERSBURG (SPT) - The Central Election Commission on Wednesday overturned a decision by St. Petersburg electoral commission for district No. 206 not to register liberal State Duma Deputy Yuly Rybakov for Duma elections on Dec. 7, Interfax reported. Rybakov complained to the CEC after the local commission refused to register him on the alleged grounds that a report written by him had not been paid for from his electoral funds. The CEC accepted that the local commission's ruling was unjustified and ordered it overturned, and that Rybakov's registration be made public, the report said. 117 Duma Candidates ST. PETERSBURG (SPT) - A total of 116 candidates will contest electoral districts in St. Petersburg and the Leningrad Oblast in Dec. 7 State Duma elections, local media reported. News agency Regnum-News reported Wednesday that 86 candidates out of 135 applicants had been registered in the city's eight electoral districts. In the oblast's three electoral districts, 31 candidates are registered, Interfax reported Tuesday. Mirilashvili's Term Cut ST. PETERSBURG (SPT) - The Supreme Court has shortened the jail term of St. Petersburg gambling industry tycoon Mikhail Mirilashvili for kidnapping from 12 years to 8 years, Interfax reported Wednesday. The reduction in his sentence was based on the Supreme Court ruling against part of his sentence based on accusations made by Mamuk Grigolashvili. The court upheld a ruling for Mirilashvili's kidnapping of two businessmen in 2000, the report said. Mirilashvili is vice-president of the St. Petersburg branch of the Russian Jewish Congress. Murder Suspects Held St. PETERSBURG (SPT) - St. Petersburg and Leningrad Oblast police have made arrests for the Oct. 19 murder of three women in Vereiskaya Ultisa, Interfax reported Wednesday. They have apprehended a 19-year-old and a 20-year-old, who allegedly robbed an apartment using a fake Kalashnikov machine gun and stole jewelry valued at 180,000 rubles ($6,000), then strangled the three. TITLE: U.S., Russia Focus on Housing AUTHOR: By Denis Maternovsky PUBLISHER: Staff Writer TEXT: Russia's booming housing sector and its long-term prospects have caught the eye of Washington, which is urging U.S. companies to get a slice of the growing pie. U.S. Secretary of Housing and Urban Development Mel Martinez, arrived in Russia this weekend, told reporters Monday that U.S. companies would participate in a number of construction projects in Russia, and that the U.S. Congress was considering the allocation of $20 million for the promotion of mortgage programs in the country. Joint plans, to be finalized by the end of 2003, include the creation of a U.S.-Russia working group on construction, mortgages and housing. Corporations AIG, Fannie Mae, OPIC and General Motors subsidiary G Mac, which work in the securities, mortgage and construction sectors, have expressed interest in the group, State Construction Committee head Nikolai Koshman said in a statement. Joint projects include an "American Village" in central Russia and pooling expertise for the construction of high-rise buildings in Moscow. The working group will also host a seminar on mortgages next February in the Moscow Region town of Dubna, while U.S. experts will share their experience with Russian companies in the utilities sector and on inexpensive house-building techniques. "It is very encouraging to see Secretary Martinez here," said Andrew Somers, head of the American Chamber of Commerce in Russia. "Housing issues in this country have not been paid much attention until very recently." Martinez, who also met Prime Minister Mikhail Kasyanov on Monday and newly elected St. Petersburg Governor Valentina Matviyenko on Tuesday, said the joint projects were "crucial" for the development of home financing and the introduction of new construction techniques to the country. Matviyenko reacted positively to the U.S. proposal, saying that joint projects come at a good time, with low-income citizens in need of improved housing and mortgage opportunities. In particular, private financing is needed to revamp the housing pool. Matviyenko noted cooperation with the World Bank, European Bank for Reconstruction and Development and other financial institutions. Matviyenko suggested St. Petersburg host a Russian-American conference on mortgages. Secretary Martinez agreed. Somers said the U.S. could also learn from Russia, since state-owned housing is the "least effective" sector of American real estate. "A look at how the Russians transferred ownership of municipal apartments to private individuals in the '90s may be of interest." "If they build a lot of new housing as part of these projects, we would gladly refinance them later on," said Andrei Vishnevsky, spokesman for the State Agency for Housing Mortgage Lending. Gerald Gaige, real estate partner at Ernst & Young in Moscow, said the projects were indicative of the recognition of Russia as a "large and developing market." He said that inefficient legislation and a lack of credit history or verifiable sources of income for the majority of Russians was likely to prevent large U.S. mortgage operators from entering the market anytime soon. TITLE: IN BRIEF TEXT: Stock Exchange Volume ST. PETERSBURG (SPT) - Trade in shares on the St. Petersburg Stock Exchange doubled in October as compared to the previous month, reaching a total volume of 37.8 billion rubles, Interfax reported Wednesday. United Financial Group, Troika Dialog, Gazprombank, Tsentrokredit and Alfa Bank were the most active traders. Moscow's Granit bank was accredited for trading last month. An exchange press release said that the exchange trades in shares of 186 companies. Ilim Pulp Production ST. PETERSBURG (SPT) - Ilim Pulp Enterprise increased production 7.3 percent during the first nine months of 2003, as compared to the same period in 2002, Interfax reported. Paper output rose 4.6 percent to 1.717 million tons, and wood products were up 19.2 percent to 0.429 million tons. From January to September the mills owned by the company produced 1.018 million tons of trade cellulose, 475,980 tons of trade cardboard, and 174,230 tons of trade paper. IKEA Factory ST. PETERSBURG (SPT) - Swedwood plans to open the second stage of its Tikhvin IKEA furniture factory in January or February 2005 at a cost of 12 million euros, the Swedwood Tikhvin director told journalists on Tuesday. Interfax quoted the director as saying that construction will begin in May 2004. The first part of the Tikhvin factory was opened in July 2002. Investment in this project in the Leningrad Oblast has reached 20 million euros. Annual revenues of the factory are also 20 million euros. Karavai Investment ST. PETERSBURG (SPT) - St. Petersburg's Karavai baked goods producer plans to increase investments 71.4 percent over 2002 to the tune of $6 million, the company's general director announced at a press conference on Tuesday, Interfax reported. The investment will go to purchase two new bread baking lines with German, Dutch and Swiss equipment. This November the baker will start up a white and round bread line with yield of 25 tons per day. During the first quarter of 2004 a line for small bread products able to produce up to six tons per day will be introduced. At the same time, Karavai's net profits were down 18 percent, or 74 million rubles, over the figure for the first nine months of 2002. 4.8M Entrepreneurs MOSCOW (Prime-Tass) - A total of 4.8 million Russians, or 3.3 percent of the population, were registered as private businessmen in Russia as of Oct. 1, Deputy Tax Minister Mikhail Mishustin told a press conference Wednesday. This is not sufficient for Russia, and the government should encourage people to set up their own businesses, he said. As of Jan. 1, 2004, the registration procedure for individual entrepreneurs will be changed in order to create a unified state register of individual entrepreneurs. Entrepreneurs who registered before Jan. 1, 2004, will have to submit the documents necessary for them to be included in the register before Jan. 1, 2005, otherwise they will have to re-register and pay the registration fee of 400 rubles ($13.42), Mishustin said. TITLE: sliding into his fifty-first year AUTHOR: By Jennifer Davis PUBLISHER: Special to The St. Petersburg Times TEXT: Affectionately called "Grandpa" by musicians and fans alike, jazz trombonist and bandleader Alexei Kanunnikov marks fifty years on stage on Saturday with a gala concert at the Concert Hall at Finlandsky Voksal. Musicians and friends will come together to pay tribute to Kanunnikov's long and successful career in a musical program hosted by Russian jazz historian, Vladimir Feiertag, featuring performances by vocalists Nonna Sukhanova and Svetlana Plotnikova, pianist Yuri Sobolev, composer and arranger Anatoly Kalvarsky, the famous folk singer Mikhail Boyarsky and, of course, the Alexei Kanunnikov Jazz Band. Kanunnikov first heard jazz when he saw the Hollywood film "Sun Valley Serenade" (1941), featuring Glenn Miller and His Orchestra. "I was enraptured by the music I heard in that film," said Kanunnikov. "It was so exciting and rhythmic." While studying at the Leningrad Institute of Foreign Languages in the early 1950s, he taught himself to play the accordion. He wanted to join the institute's band, but they already had an accordion player. However, as fate would have it, the band was short of a trombonist. "I borrowed a trombone and taught myself by trial and error," he said. "I would play notes on the accordion and test them on the trombone." In 1958, Kanunnikov joined the seminal Weinstein Orchestra, famous for spawning several of St. Petersburg's leading jazz musicians including Oleg Kuvaitsev, saxophonist and bandleader of the Leningrad Dixieland band, and Gennady Golstein, respected educator and bandleader of the Saxophones of St. Petersburg. But, during the Cold War, jazz musicians often faced political pressure from Soviet authorities. "Our repertoire in the Weinstein Orchestra was dictated by cultural officials, so we played mostly waltzes and polkas. Only one foxtrot was allowed a night - and it couldn't be American," Kanunnikov recalled. Despite censorship, the Leningrad jazz community had a strong underground following and unique style. "We were called styliagi (hep cats)," said Kanunnikov. "We sported big shouldered, checkered jackets, skinny ties, pompadour haircuts and peg-legged pants. Komsomol patrolmen would approach us on the street and cut up the bottom of our pants." After leaving the Weinstein Orchestra and working for a time in a touring vaudeville show, Kanunnikov finally founded his own Dixieland band, the Alexei Kanunnikov Jazz Band in 1969. "I had been in love with Dixieland for a long time. We found a permanent gig playing the restaurant on the 18th floor of the Sovietskaya Hotel," he said. "Within a half a year, the 18th floor gained cult status. It was the first time in the Soviet Union that a restaurant booked a nightly Dixieland band." In fact, when Duke Ellington visited Russia in 1971, Ellington's lead saxophone player, Paul Gonzalves, was brought to the 18th floor to jam with Kanunnikov and his band. From the mid 1970s to 1980s interest in jazz waned and Kanunnikov was fired from the Sovietskaya Hotel. He was forced to tour with kitschy pop star Valery Leontiev and the Russian bard, Mikhail Boyarsky, to make ends meet. Finally, with the opening of the Jazz Philharmonic Hall in 1989, jazz experienced a renaissance and the Alexei Kanunnikov Jazz Band was reborn. Kanunnikov's impact on the local jazz community is widespread. Oleg Kuvaitsev credits him with introducing him to Dixieland. "Kanunnikov showed me the light, while we were playing together in the Weinstein Orchestra," Kuvaitsev said. "I had a revelation. This was my music. I couldn't understand why I hadn't been listening to it all my life." Kuvaitsev's son, Fyodor, has played clarinet in Kanunnikov's band for the last seven years and has recently joined the newest lineup of the legendary rock group, Akvarium. "I have learned so much from Kanunnikov," said the younger Kuvaitsev. "When I first started out, he was really patient with me, although I made mistakes. He never overwhelmed me with criticism. He guided me step by step." Although nearing his 72nd birthday, Alexei Kanunnikov has more energy than most musicians half his age, playing weekly concerts, recording albums, and touring extensively. His playful nature and giddy joy on stage is contagious and he has been known to sing a few numbers in perfectly accented English when inspiration strikes. When asked about his plans for retirement, Kanunnikov answers, "I won't quit playing until I've got both feet in the grave." "Alexei Kanunnikov: Fifty Years on Stage" at the Concert Hall at Finlandsky Vokzal, 1 Ploshad Lenina, Nov. 8, 7p.m. Tickets: 200 rubles. Jennifer Davis is a local writer and vocalist who has performed with the Alexei Kanunnikov Jazz Band. TITLE: la minor's live gangster chanson AUTHOR: By Sergey Chernov PUBLISHER: Staff Writer TEXT: La Minor, one of the city's leading live bands that adds its blend of cool, jazzy urban folk to the local club scene since it first appeared in November 2000, will mark its third anniversary with a special concert at Red Club which will also launch its third, live album. According to La Minor's singer Slava Shalygin, the sextet will perform 26 songs including its greatest hits, some seriously rearranged, as well as several new songs. Specially for the show, the band has rehearsed Italian pop singer Adriano Celentano's "Storia d'amore" as a suprise number. "I feel wonderful now, I think we're getting better," said Shalygin, looking back at the band's three-year history this week. "We released a few albums, visited Europe ... We're in demand, actually." La Minor stands out of the local bands, performing both the classic and less known urban folk gems, mainly Soviet prison songs, which they approach carefully and with a good taste. "These are the songs composed by convicts sent to hard labor a very long time ago, then those written by prisoners in the 1920/30s, some street songs," said Shalygin. "They were performed by [Soviet-era] singers Leonid Utyosov, Vadim Kozin and Pyotr Leshchenko, and, later, by Arkady Severny." Though some of local musicians accuse La Minor of having no drive, the band's composed, hysterics-deprived delivery adds much to its charm. "I think it should be like this," said Shalygin. "We are not a rock group anyway. I'm not ready to shake on stage. We deliver everything in rather a quiet way. I think you shouldn't be too nervous on stage. I can't dance and it's hard to sing if you do." La Minor tours Western Europe frequently - late in December it will embark on yet another month-long tour encompassing Germany, Austria, Holland and Belgium. The band's so far best European concerts were at Germany's Hamburg and Berlin, Belgium's Brussels and Liege, and Austria's Gratz, according to Shalygin. He said the Soviet-era urban folk that the band performs strikes a chord with West European audiences. "They write "Russian gangster songs" on the posters," he said. "They see it as folk, as chanson." Though what is described "Russian chanson" in Russia is usually poorly-peformed redneck pop reflecting some sort of criminal mentality or situations, Shalygin said Europeans see the difference. "They have a very correct idea of chanson, while here it's spoiled by people with some kind of cheap keyboards," he said. Shalygin has also founded a concert agency that he plans will be bringing European bands that play in styles similar to that of La Minor. Apart from Shalygin, La Minor also includes Sanya Yezhov on button accordion, Sergei Pavlov on guitar, Yegor Komarov on saxophone, Max Temnov on double bass and Pyotr Ketlinsky on drums. A former member of the stadium ska-punk band Leningrad, Temnov also plays with the prominent local surf band Bombers. "We try not to walk away far from our style, though now we undertake some musical experiments and incorporate some interesting people," said Shalygin. "The arrangements become richer because of the different instruments." For instance, for the anniversary concert La Minor is planning to expand its lineup to feature 13 musicians, including Yury Sobolev on piano and Vadim Bogorad on clarinet, both active on the local jazz scene, as well as Spitfire's trumpet player Roman Parygin and Chirvontsy's trombonist Vasily Savin. The instruments to be used at the show also include viola and balalaika. Apart from musical innovations, the concert will have a visual aspect, with a video backing prepared by photographer Dmitry Shubin, best-known his 2001 series of infamous local murder sites. La Minor's albums include "Blatnyak" (Prison Folk, or Gangster Songs) (2001) and "Chto-to Sigareta Gasnet" (The Cigarette Keeps Going Out) (2003). The third, live album that will be launched at the concert is called "Lenkontsert" (a reference to the notorious, now-defunct Soviet state-owned concert agency) and includes 20 tracks recorded live at Red Club this May. Last month, La Minor recorded two tracks for upcoming local scene compilation CD, the long-awaited product from the newly-formed Shnur'OK label launched by Leningrad's frontman Sergei Shnurov. The compilation which also includes Leningrad's spinoff projects and such local alternative bands as Kacheli is due in December. La Minor performs at 8 p.m. Friday at Red Club. Links: www.la-minor. narod.ru TITLE: chernov's choice TEXT: The long-awaited documentary "Paul McCartney: The Journey to Red Square," covering three days that the former Beatle spent in St. Petersburg and Moscow this May, will be screened on ORT Television this weekend. The A&E Network film chronicles McCartney on his hectic three-day Russian odyssey, crowned by the three-hour open-air concert in Moscow's Red Square. Apart from the concert, which included performances of The Beatles' era songs such as "Hello, Goodbye," "Back in the U.S.S.R." and "Hey Jude" and McCartney's more recent solo material, the documentary includes encounters with his fans, such as Russia's self-styled "No. 1 Beatlefan" Kolya Vasin and Akvarium's Boris Grebenshchikov. However, rumor has it that the version to be shown in Russia will be shorter than the U.S. original, for reasons that remain unclear. What is indicated in the TV guides simply as "Paul McCartney's Concert on Red Square" lasts 1 hours 50 minutes (commersials included), while the U.S. documentary lasted full two hours. The show airs at 11:30 p.m. on Friday. Auktsyon keeps on celebrating its 20th anniversary, after this summer's pair of anniversary concerts given in a Moscow club. This time, there will be a concert at St. Petersburg's Yubileiny Sports Palace's Malaya Arena with a number of guests such as Auktsyon's former members, singer Sergei Rogozhin and dancer Vladimir Vesyolkin, as well as the Ukranian band Vopli Vidoplyasova's singer/accordion player Leningrad's mega popular frontman Sergei Shnurov (there can no good celebration without Shnurov's name on the poster, it seems). Auktsyon plays at Yubileiny on Friday. Deboshir Film's Pure Dreams, the festival of independent movies opens at the Palace of Youth, or LDM, this Thursday. Launched by actor and film director Alexander Bashirov six years ago, the four-day festival is supposed to "introduce works not available for broader audiences for commercial, political, or censorship reasons." Politically and morally ambivalent as ever, this year's festival boasts both a program of Chechen war documentaries, which were banned by Moscow's Film Center last month, and a program from the extreme nationalist National-Bolshevik Party. Apart from film screenings, the festival also has a music program, but unlike last year, with a great show from ska-band Leningrad and punk band PTVP inviting fans to tear down portraits of President Putin, nothing extraordinary is planned. Veteran rocker Vladimir Rekshan and obscure bands that usually perform at Manhattan club will take the stage. Tequilajazzz, a powerful quartet, will play a rare local gig at Stary Dom on Nov. 13. The band last appeared in the city at Fish Fabrique on Sept. 4 at the traditional joint celebration of its and the venue's anniversaries (10th and 9th respectively in 2003). Unusually, the set included even old hits that the band does not normally perform and was marked by an excellent, transparent sound. According to Tequilajazzz's singer and bass player Zhenya Fyodorov, he is now busy with composing and recording music for a play and two feature films. - By Sergey Chernov TITLE: cook delivers a very good dinner AUTHOR: By Eric Bruns PUBLISHER: Special to The St. Petersburg Times TEXT: When James Cook Pub and Cafe was reviewed by this newspaper when it opened a year and a half ago, it was described as the middle road between "Leninist legacy" and "Eurostandard comfort." The city has seen a lot of changes since that time and, if you've stopped by the pub recently, you might think the ubiquitous reconstruction work on such middle roads had paved the way to EU membership. Our visit the other night would have been a pleasure anywhere in the West and, in a footnote to economic development, had the company of a thriving clientele. Approaching along pedestrian Malaya Konyushennaya, the lack of beer tents reminded us of the changes about, most notably that of the seasons, but we were immediately put at ease when we arrived and descended into James Cook's warm cellar atmosphere. As the name implies, it is divided into a pub (to the right as you enter) and cafe (to the left). The latter looked like a great place to relax with a cup of java and slice of something sweet, but we ultimately joined a friend waiting for us in the pub. That side of the establishment is arranged in a row of crimson velvet booths, dark hardwood tables and chairs, and a long modern bar. A glance across the arched red brick ceiling is broken only by small window slits looking up to street level before falling upon numerous framed photos on one wall, and artistic beer advertisements on the other. The impressive whisky display behind the bar naturally led me to the menu, where I was far from disappointed. The major players (as well as a few I'd like to meet) are all present and accounted for, averaging about 200 rubles ($6.70) for 40 ml. The draft beer selection is similarly refreshing, boasting the likes of De Koninck, Caffrey's, Guinness, Kilkenny, and Strongbow cider. We decided on half-liter glasses of Franziskaner and Hoegaarden, each for 120 rubles ($4.00), while the Finnish friend who had waited for us surrounded by such delights settled on a third-liter bottle of Borzhomi mineral water for 55 rubles ($1.85). Besides whisky and beer, the menu also offers such sections as "Hot beer snacks" and "Let's have a main course (for those who are afraid to lose weight)." It is largely hearty fare, with few vegetarian dishes outside soups and salads. My companion began with the "Zebra" salad for 190 rubles ($6.35), consisting of smoked chicken, hard-boiled egg, onion, fresh apples, cheese, mayonnaise and walnuts. The nuts came sprinkled on top, with thin green apple slices supporting a plateau shape. It was fulfilling and extremely well balanced, if a little conservative - it's hard to break new ground when dealing with mayo. I started with a roll of salted salmon stuffed with feta cheese and red caviar for 260 rubles ($8.70). The rings of salmon that didn't swim too far upstream in the 1,000-island dressing were a delight, but their offspring were hardly discernable. A total of nine caviar pearls sat on the side of the plate, not knowing how to participate in the dish, like teenagers at a high school dance. I suppose my American friend took that image to heart as he ordered the "Machine-gun belt" of pork ribs with barbecue sauce for 450 rubles ($15.05). In a gesture of consideration, the slaughter was preceded by a dish of warm lemon water, presumably to cleanse one's hands of the dirty business to be done. The full rack hanging over the sides of his plate didn't put up much of a fight, however. He quickly devoured them, only pausing when the other three diners at the table scavenged away a rib here and there. They were tender, well coated in a tasty barbecue sauce, and a stunning surprise for a country that still seems to be struggling to grill a decent steak. A bit jealous of the carnivores at my table but willing to sacrifice myself for vegetarian readers, I ordered something called "James Cook keeps the fast" for 160 rubles ($5.35), inexplicably listed in the section addressed to those "afraid to lose weight." It was described as baked aubergines with rose potatoes, fresh vegetables and fried mushrooms, but I unfortunately found the dish's title appropriate. The mushrooms were succulent, but all the rest was undercooked and would have been tasteless were it not for an abundance of olive oil. I stole another rib from the carnage beside me and resolved to fill up on the delicious dark bread rolls, soft, filled with nuts and covered with seeds. With the exception of the misguided vegetarian detour, an evening at James Cook is about as nice as you can get. My only regret is that in embracing higher standards, the prices tagged along. Change, it seems, is in the air. James Cook Pub and Cafe. 2 Shvedsky Pereulok. Tel.: 312-3200. Coffee house open from 9 a.m. and pub from noon, both "till the last quest [sic] stands." Menu in Russian and English. Credit cards other than American Express accepted. Dinner for two, with alcohol: 1,785 rubles ($59.80). TITLE: confessions of a modern icon AUTHOR: By Andrei Vorobei PUBLISHER: Special to The St. Petersburg Times TEXT: The Hermitage, with a hint of irony, paid tribute to The Russian Museum's courage in dealing with living contemporary artists, namely Damien Hirst, during the press conference at the opening of the artist's exhibition - "From the Cradle to the Grave" - on October 30 at the Marble Palace. Hirst, one of the outstanding contemporary living British artists, whose prominence and influence has spread far beyond the borders of the UK, was not, unfortunately, on hand to appreciate it. The idea to mount the show belongs to the Department of New Trends in Art of the Russian Museum and particularly to its chief Alexander Borovsky, who as early as two years ago told the British Council he wanted to mount "a 'not-quite traditional' exhibition." According to the British Council - the main organizer of the event - the artist made this exhibition specially for this year's Ljubljana International Biennale of Graphic Arts, and then was offered the chance to bring it to another city of his choosing. Hirst chose St. Petersburg. That Borovsky's took the opportunity to exhibit Hirst was unsurprising given Hirst's fame and reputation as the 'bad boy' of modern art. Hirst is the leading figure of the Young British Artists (YBA or Britart) movement, which gained notoriety in the UK in the 1990s. Born in 1965 in Bristol, it was Hirst who organized and promoted "Freeze" in 1988 - a show which displayed several of the artist's pieces and works by his fellow students from Goldsmith College in London such as Sarah Lucas, Gary Hume, Fiona Rae, Tracey Emin, The Chapman Brothers, Chris Ofili, Jenny Saville and others. Hirst, as well as brothers Jake and Dinos Chapman, Gary Hume and other members of the YBA movement, are already known to the Russian audience due to last year's graphic exhibition "In Print," also organized by the British Council. Internationally, Hirst became best known for his "Natural History" series in which dead animals (such as a shark, a sheep or a cow) are preserved in formaldehyde-filled glass containers. He was the first artist who attracted the attention of Charles Saatchi, a prominent British advertising executive who since the 90s has been Britain's leading patron of contemporary art and its richest collector. It was Saatchi who stood behind the first public introduction of YBA work through the series of "Charles Saatchi's Young British Artists" at the end of the 1980s; he possesses the largest collection of their art, and that made possible the infamous "Sensation" exhibition first presentation at the Royal Academy of Arts in London in 1997. It had been announced that Hirst would attend the opening of his solo debut in Russia in person - but the unpredictable artist stayed away on the day. Gordon Burn - Hirst's friend and unofficial biographer - was there instead. "I'm not here to speak for Damien Hirst. I'm here as a friend of Damien Hirst," he said at the press conference. The purpose of the current show is not that it represents the works mentioned above - Hirst's installations and sculptures, many of which are on display at Saatchi's recently-opened gallery in London - but the mental and emotional activity that precedes completed products of art. This is represented in over 100 drawings, sketches, and rough drafts of existing pieces or ideas to be materialized in the future. Thus it is focusses on the birth of a work of art, rather than the artwork itself. A single real installation, "From the Cradle to the Grave" (2000), which gives the exhibition its title, and which is itself a metaphor of human life, is a glass box divided into parts - "work" and "home" lives - with a floor covered in children's toys. It therefore sets the mode in which the whole exhibition is to be read - as a sort of archeology of human life. Indeed, the displayed works range from the early drawings made when Hirst was a teenager (the earliest one, from 1981 - "Study After Delacroix" - belongs to the artist's mother) to the present time (drawings mostly addressing Hirst's religious experiences). It is remarkable how the artist's handwriting and his hand-made drawings, with their incompleteness and the poverty of their means, contrast with the monumentality of Hirst's completed works. These are highly technological, abstract and impersonal, and usually cover such global issues like mortality and religion; therefore, this exhibition contains a human dimension. It is about living art and creativity. As this suggests, there are different ways to conceptualize Hirst's works of art. While in his early works, such as his drawings referring to his famous series "Natural History," or later series like "Couple Fucking Dead (Twice)" (1994), the central, though not exclusive theme was the exploration of mortality by a scientific mind through pharmaceutics, scientific and medical experiments, the latest works are, as noted, religiously loaded. Often they are allusions to canonical Christian figures (like "Adam and Eve (2 ideas)" (2001) or "The Beheading of John the Baptist Underwater" (2002)) and plots (like the fascinating piece "Last Supper" (2001)). At the same time they often have obvious connotations with works by another famous 20th century British artist Francis Bacon - namely with his triptychs. "[Hirst] is like a lot of people ... [he] is exhibitionistic and shy at the same time," Burn said. "From the Cradle to the Grave" runs at the Marble Palace through November 30. TITLE: new competition welcomes violinists AUTHOR: By Galina Stolyarova PUBLISHER: Staff Writer TEXT: Internationally renowned violinist Liana Issakadze, a frequent visitor to St. Petersburg, had long been wondering why it is that a city boasting one of the world's strongest school of violinists doesn't host a violin competition. That was until she was offered the chance to head such a competition this year. Now The First International Liana Issakadze Violin Competition runs at the Shostakovich Philharmonic Large and Small (Glinka) Halls until Nov. 13. The brain behind the project is Denis Leonov of Intrada Concert Agency, who offered the Georgian-born violinist the chance to lend her name to the contest and preside over its jury. But Issakadze had had the idea in mind for quite some time before this. "I was good friends with [late mayor of St. Petersburg] Anatoly Sobchak, and he had mentioned the idea to me," Issakadze recalls. "It was just that we never really got to shape it up, unfortunately." The international element of the newborn contest is impressive, with over 50 musicians from Germany, France, Belgium, Austria, Finland, Switzerland, the United States, China, Taiwan, South Korea, Turkey, Romania, Georgia, Latvia, Lithuania, and Ukraine, as well as Russia, competing for the $10,000 first prize. The jury features mainly Russian and Russia-born musicians of the highest level, including, in particular, professor Zahkar Bron (now based in Germany), professor Viktor Danchenko (now based in the U.S.) and Vladimir Ovcharek, professor at the St. Petersburg Conservatory. "Although the competition bears my name, I dedicate it to all great St. Petersburg violinists, who created the famous school here," Issakadze said Tuesday. She also promised that the contest would take place in a spirit of artistic festivity rather than sports rivalry. The contest's program was tailored to match this goal. While a number of contests require violinists to perform standard exercises in the first round, Issakadze decided to offer the musicians the chance to perform sonatas by Beethoven, two parts from any sonata by J. S. Bach or a ten-minute virtuoso work by Paganini, Venyavsky, Saint-Saens or Sarasate. In the second round, the participants will play Mozart's concerto No. 3,4 or 5 with a chamber orchestra. In the third round they have a choice between violin concertos by Paganini (Nos. 1 and 2), Elgar, Mendelssohn, Beethoven, Brahms, Sibelius, Berg, Tchaikovsky, Venyavsky (No.1), Prokofiev (Nos. 1 and 2) and Shostakovich (Nos.1 and 2), to be performed alongside a symphony orchestra. "Performing alongside chamber and symphony orchestras should reveal much more of the musicians' artistic potential," Issakadze said. "Usually in the second round the accompaniment is limited to piano." Jury member Viktor Pikaizen, a leading violinist with the Moscow Philharmonia, said: "We would like the participants to demonstrate their artistic abilities. This criteria prevails over technical perfection." Most participants are very young, between 17 and 20 years old, a fact that made some critics question the artistic merit and technical level of the contest. But the jurors are not discouraged. "First of all, we will not be looking for sheer perfection. What we need is a spark and a clear promise of perfection in the future," said jury member Alexander Remich, a violin professor at the Moscow Conservatory. "And secondly, the contest's best achievement is definately a discovery of a new talent." Issakadze, who herself first put her hands on a violin at age three, and participated in her first international contest aged six, said that during preliminary auditions Tuesday she was stunned by the level of the contestants. "It was astounding, and I am already very happy that we have started all this," she said. For the competition's schedule, see listings. TITLE: stormy throwback to late soviet film AUTHOR: By Tom Birchenough PUBLISHER: Special to The St. Petersburg Times TEXT: Vadim Abdrashitov's new film "Magnetic Storms" opens with a characteristic, highly memorable scene: around the nighttime perimeter of a factory, gangs of workers clash in an apparently ritual fight. Their working day over, they divide into two factions and engage in a senseless, stylized and seemingly endless conflict. It is an abstract form of confrontation, almost choreographed, in which none of the participants appears to get hurt, while fighting with an energy that is almost creative (if anything, it echoes the traditions of kulachny boi, the ritual festive fistfights of peasant tradition). The setting is an unspecified regional factory town, presumably at the end of the 1980s, where the early winds of political change have put two local bosses in competition for control of the facility. Leading one of the groups is Valera, played by Maxim Averin in a strong role for an actor previously associated with much more lightweight material. Upon his return home to his wife Marina (Viktoria Tolstoganova), their apparent domestic happiness becomes threatened: literally, in the eruption of the street fighting into their apartment, and metaphorically, by the return of Marina's sister from Moscow, where she has found a different kind of security in what we can only assume is prostitution. Abdrashitov, working with his long-term scriptwriting partner Alexander Mindadze, takes on the nuances of late-Soviet iconography, mixing them with the brutal realities of the time. A seemingly tranquil scene of gathering (in fact, stealing) potatoes is undercut when all drop to the ground to hide from an approaching militia patrol. In a world where any concept of law and order has vanished, the police pay no attention. The factory conflict, which pits friend against friend, has expanded into wider spheres, as the couple discovers when, returning home from the fields, they are thrown from a train; Marina avoids possible rape, and the couple wanders into a military training area only to narrowly escape a tank battle exercise. It's a black vision of a world redeemed by little more than the energy of confrontation itself, which is particularly well caught in Yury Shaigardanov's fast-moving cinematography, set among the monumental machinery and empty facilities of a massive Soviet factory. Just as stylized as the early fighting scenes is the penultimate scene in which the factory's future is revealed: a public ceremony bleached with light and suffused with a heightened, unreal quality. Similarly, the final scene of workers peacefully converging on the factory gates for another morning shift is so exaggeratedly Soviet that it is hard to define where the element of parody begins and ends. The "magnetic storms" of the film's title may have passed, but any future consolation looks remote and uncertain indeed. Abdrashitov is an often uncompromising, intellectually demanding director, whose work has always found acclaim on the international festival scene, and who rose to particular local renown with perestroika. Exactly who his contemporary audience in Russia may be is another matter, a fact sadly attested by the size of audiences at some of the opening weekend's showings. While the traditional "intelligentsia" may remain loyal, it looks uncertain that "Magnetic Storms" will catch much attention from a younger generation, which, although possibly attracted by its stylistic elements (and particularly by its camerawork), may not be attracted by the era in which it is set. Abdrashitov's sense of social grotesque in "Magnetic Storms" deserves comparison with the work of Soviet director Kira Muratova, who has begun to receive new cult recognition from a younger audience. At least one factor should help gain recognition for "Magnetic Storms" - its length: running at a sparse 93 minutes, it is a notable departure from Abdrashitov's previous film, "Time of the Dancer" (1997), about the history of racial conflict in the Caucasus, which ran a good hour longer and had even the most committed audiences struggling to make it through. Much more than social comment, and much more penetrating than a simple stylistic exercise, "Magnetic Storms" poses more questions than it answers and finally, like Valera's future at its conclusion, remains a cipher. It deserves attention from local audiences, but also from any foreign observer of contemporary Russian cinema. TITLE: Sarno Whips NHL Debut, Edmonton Thrash Montreal PUBLISHER: The Associated Press TEXT: MONTREAL (AP) - Peter Sarno got his NHL career - and the Edmonton Oilers' long road trip - off to a great start. Sarno scored in his debut and Edmonton defeated the Montreal Canadiens 4-2 on Tuesday night. "It's a pretty exciting time,'' Sarno said. "I've been in the minors up to this point. We've been struggling on the road with goals and I'm just happy I got the chance to score.'' Raffi Torres, Fernando Pisani and Cory Cross also scored and Marty Reasoner had two assists for the Oilers, who got their first win in four road games this season to begin a six-game trip. "It's really good to start off on the right foot,'' Oilers forward Ryan Smyth said. "We've got five more games in front of us and there's no easy task here in this game any more so we've got to find ways to win games early and often and gain some momentum off of this.'' Edmonton had been shut out twice, and scored just once, in its three previous road losses. Sheldon Souray scored twice for Montreal, which has lost four straight home games. The Canadiens have lost five of six overall while being outscored 22-6. "I'll trade the goals for the points, because right now we need the points,'' Souray said. Sarno, recalled from Toronto of the AHL on Monday, put a rebound of Brad Isbister's shot into an open net to give the Oilers a 4-0 lead 7:15 into the second - just 22 seconds after Cross scored his second of the season at 6:53.