RUSSIA - Jan. 23 - Moscow Probes Gazprom Asset Stripping.

The FT reports a letter sent on Jan. 18 to Kremlin aide Dmitri Medvedev by Economic Development Minister German Gref listing questions at a Gazprom Jan. 23 board meeting. The list has been compiled to identify whether asset stripping has been taking place. Medvedev is Gazprom's non-executive chairman. He suggests the appointment of an external auditor to seek answers. (The action follows concerns by minority shareholders over the past few months about gross mismanagement and alleged asset stripping at Gazprom, and notably its relationship with Itera, a Florida-based gas company. Its production of gas has been declining while that of Itera has been rising. The state, which owns 38% of Gazprom, has taken a tougher line towards the company over the past few months, and appointed Medvedev as chairman. However, Boris Fedorov, head of UFG, a Moscow-based investment bank, and a minority shareholder representative on the Gazprom board, has raised concerns that the government was not taking an active enough role in investigating alleged mismanagement of the group. After initial tough rhetoric, it appears unlikely that there will be any conclusive findings leading to action by the state ahead of the planned retirement of Rem Vyakhirev, Gazprom chief executive, scheduled for April or May 2001). Gref's letter poses 20 detailed questions on the relationship between Gazprom and Itera over the last three years. It requests information on common shareholders, corporate structure, and financial transactions. Fedorov said on Jan. 22 Gref had not been in touch with him ahead of the meeting in spite of discussions about his concerns at previous Gazprom boardroom talks. But he said the risk of asset stripping had declined since the imposition last September of new rules requiring any significant transaction to be scrutinised by the board. He said if his concerns over a rapid and independent audit were not met by Gref's proposals, he was willing to request a parallel audit commissioned by minority shareholders. Gazprom on Jan. 19 released third-quarter 2000 results in accordance with international accounting standards for the first time, which showed 13% fall in revenues to $3.6 bn.