IN BRIEF

Published: May 31, 2005 (Issue # 1074)

Timoshenko May Go

MOSCOW (Bloomberg) - Ukrainian Prime Minister Yulia Timoshenko may be sacked because of the worsening investment climate, Interfax reported, citing Boris Nemtsov, the Russian adviser to Ukraine President Viktor Yushchenko.

Timoshenko and Yushchenko are "so different" they won't be able to work together much longer, Nemtsov was quoted by the news agency as saying.

The Timoshenko government has made "grave mistakes," including trying to control energy prices, which has hurt the country, Nemtsov told the news service.

Capital is leaving the country, economic growth is slowing and investment is being reduced in export-orientated industries, Nemtsov said, Interfax reported.

Moscow to Sue UES

MOSCOW (Bloomberg) - Moscow Mayor Yury Luzhkov said the capital's administration plans to sue national power utility Unified Energy System for losses inflicted on the city by outages on May 25, Interfax reported.

The city has set up a special commission to assess the "very grave" damages, Luzhkov said yesterday during a routine inspection of city facilities in Moscow, Interfax reported. Management at Mosenergo, the Unified Energy unit that supplies most of Moscow's power, is "absolutely incompetent" Luzhkov told Interfax.

Prosecutors on May 26 opened an investigation into whether Unified Energy's management was negligent for outages that left as many as 2 million people without power. Mosenergo needs to increase tariffs to help raise as much as $285 million a year to modernize its grid, Vladislav Nazin, deputy chief economist of Mosenergo, said Sunday.

Mosenergo's current budget only lets the company spend $107 million a year on upgrades.

Yukos May Lose All

MOSCOW (Bloomberg) - The government will probably seize the rest of OAO Yukos Oil Co.'s assets, regardless of who is elected to the company's board, Vedomosti said, citing an unidentified person in President Vladimir Putin's administration.

Yukos Chairman Viktor Gera-shchenko, the former Russian central banker, handpicked candidates for the new 11-member board after shareholders failed to put forward any names, Vedomosti said. Four foreign directors quit last year, the newspaper said.

Gerashchenko nominated himself and four other current directors, including Chief Executive Officer Steven Theede and Deputy CEO Yuri Beilin, Vedomosti reported. New nominees include Ivan Silayev, the former chairman of the Soviet Union's council of ministers who now heads the Union of Machine Builders, and Alexander Semikoz, a member of Evrofinance Mosnarbank's audit committee, the newspaper said.

Telenor Defies Alfa

OSLO (Bloomberg) - Alfa Group, one of Russia's largest industrial-financial holdings, and its main owner, Mikhail Fridman, will never be allowed to own a stake in Telenor ASA, Norway's dominant phone company, Dagens Naeringsliv reported, citing Norway's Industry Minister Boerge Brende.

Alfa Group and Telenor are vying for control of VimpelCom, Russia's No. 2 mobile-phone company. One option may have been for Alfa to swap its VimpelCom stake for shares in Telenor, a move that would dilute the Norwegian government's 53 percent stake.

"It has never been an issue, and never will be, to agree to an industrial solution where the state dilutes its Telenor stake to get in Fridman and the Alfa Group,'' Brende said, according to the Oslo-based newspaper.