Kremlin hawks' influence grows

Alexander Voloshin

Moscow, Oct. 29 (Reuters): Prosecutors targeted another top shareholder in Russia’s biggest oil company Yukos today, heightening a political drama that may also cost one of the Kremlin’s most powerful men his job.

Shares in the oil giant, whose billionaire boss Mikhail Khodorkovsky was arrested at gunpoint on Saturday, slid 3 per cent after prosecutors asked a court to lift the immunity of a key shareholder who was charged with tax evasion this month.

The company is at the centre of what most analysts see as a drive by Kremlin “hawks” to reassert the state’s authority over Russian business and stage-manage coming elections — for parliament in December and the presidency early next year.

Khodorkovsky — one of a handful of “oligarchs” who made vast fortunes in the post-Soviet privatisations of the 1990s — is backing two minor liberal parties in the parliamentary polls and many analysts say he planned to run for President in 2008.

A statement from the general prosecutors’ office said it wanted the election to the upper chamber of parliament of Vasily Shakhnovsky, who owns 4.5 per cent of Yukos, to be annulled and so end his immunity from charges of tax evasion.

Shakhnovsky, president of Yukos-Moscow, was voted in to the Federation Council as a representative of the Evenkia region on Monday, 10 days after he was charged with tax evasion.

Interior minister Boris Gryzlov — seen as one of the Kremlin hawks — was quoted by Interfax news agency as saying he did not see anything illegal in the action taken against Yukos.

“A review of the results of privatisation is inadmissible,” he said in St Petersburg. But he added: “All the mineral resources Russia has do not belong to some company, or to a person, but to the citizens of Russia. If a firm offers to manage these resources, that does not mean that they can privatise our profits.”

In another possible sign of the Kremlin hawks’ ascendancy, local media reported Putin had accepted the resignation of his chief of staff, Alexander Voloshin, who is seen as the leader of a rival pro-business camp.

Known as the “Grey Cardinal”, Voloshin, 47, rose under Putin’s predecessor Boris Yeltsin and is regarded as one of Russia’s most powerful “backroom” political figures.

But he and his circle of Yeltsin-era officials are viewed as tainted by their links to Khodorkovsky and other oligarchs. The Kremlin gave only an indirect denial of the resignation.

Khodorkovsky’s dramatic arrest was widely seen as a warning to the business elite not to meddle in politics.

Putin is widely believed to have made a deal with the oligarchs when he came to power in 2000 not to interfere in their businesses as long as they stayed out of politics.

Two other tycoons Ä Boris Berezovsky and Vladimir Gusinsky Ä later fell out with the Kremlin and fled into exile.

”The real balance of power in the Kremlin has shifted Ä to people in uniforms,” Dmitry Oreshkin, of the Merkator think-tank, said.

Putin, a former KGB spy, has brought increasing numbers of state security and military officials into top jobs.

The drama has hit Russia's booming financial markets, with the share market Ä led by YUKOS Ä falling again on Wednesday after a recovery the previous day. The rouble, however, managed to rise to its highest level in almost two years. (Additional reporting by Maria Golovnina and Larisa Sayenko)