#51, July 6, 1999
A meeting of the public expert scientific and technical council of the Primorye-based oil and gas complex construction administration was held. This was devoted to ecological issue of the sea area with regard to possible oil pollution, as well as designing and construction of the sea transport and bore installations. Russian...
A "round-table" meeting "A dialogue with authorities" was held on June 29. This was dealt with the Program of social and economic stabilization in Primorye within 1999-2003 years. The absence of the krai leaders showed a "significance" of this event. Thus, "the dialogue" announced was similar to a chain of monologues delivered by those who, officially, found powers and time to acquaint themselves to this program document. Russian...
"ZR" continues an issue of private vehicle transportation in Vladivostok. According to unofficial data, a third of city routes is still owned by private motor-companies which avoid the payment of taxes. The head of Primorye organized crime prevention board V.Chechenov says that they did succeed in revealing a system of the city-through transportation controlled by criminal structures and in curbing an attempt to set up a new motor-company as well. By the way, the municipal property committee, the deaf-mute society and even consumer's rights society appeared to be among ... its founders. Russian...
A consulting fund center has been opened at the Asian-Pacific interbanking currency stock exchange. According to the head of the stock exchange fund department Igor Kholodkevich, they have set it up so that to attract private investments in domestic economy. Russian...
At a meeting of shareholders of bank Mercuri, which was held on June 29, they carried a decision on the increase of the bank charter capital up to 15 million rubles in the third quarter of 1999. The amount of the new charter capital has been agreed with both present and would-be bank shareholders among which JSC Spassktsement, Yaroslavsky mining and dressing plant, a number of fishery companies and natural entities as well. Primorsky mining and dressing plant and a number of mining companies are also interested in cooperation with the bank. Russian...
Industrial production growth during the first five months of 1999, as compared to the same period of 1998, could be observed in 58 regions of Russia. This fact shows a rather steady tendency to the improvement of the situation in the real sector of domestic economy. At the same time, the production output has been reduced in 27 regions of the RF. The greatest production slump occurred in Kalmykia (by 28%) and in Koryak Autonomous Area (by 21%). A situation in Primorye worsened too. Russian...
Round timber of coniferous and hard-deciduous species is a traditional item in Primorye export. "ZR" continues to observe this market conditions. The head of the external relations department of JSC Primorsklesprom Alexander Lyakhovka comments on the present situation in this sector. Russian...
FIRST VICE PREMIER NIKOLAI AKSENENKO VISITS PRIMORYE
A governmental commission led by First Vice Prime Minister Nikolai Aksenenko came on July 1 to Vladivostok where Aksenenko held a meeting on the problems of the local fuel and energy complex attended by the leaders of the Russian Far East regions and top executives of regional energy commissions, energy and coal producers.
Aksenenko believes that many of the problems will be resolved by the maximum possible reduction of prime costs by electricity and coal producers. He also supported the administration of Primorsky Krai urging that the system of mutual settlements should be optimized. If these measures are implemented, believes Aksenenko, the energy tariffs currently effective in Primorye might be reduced by 10% by August 1 and two another 10-% cuts might be possible before the beginning of the year 2000. This decision will be backed by relevant directives to the federal Ministry of Fuel and Energy.
At a news conference held by Aksenenko in Vladivostok, Primary Governor Nazdratenko stressed that the need for a protectionist policy toward the Far East has been declared on such a high governmental level for the first time ever. It is meaningful that the first vice premier acknowledged the importance of a differentiated approach to Primorye due to the specifics of this region which are, above all, numerous military bases and defense industrial facilities. - Irina PETROVA. Russian...
WILL PRIMORYE REMAIN ATTRACTIVE TO FOREIGN INVESTORS?
The "ZR" editorial office has received an open letter by Mr. Andrew Fox, member of FESCO supervisory council and chairman of the board of directors of JSC "Tiger Securities", who represents a group of foreign investors. Published below is a summary of this letter which presents their viewpoint of the recent events involving FESCO and other Primorye shippers.
Since 1992, foreign portfolio investors have become major shareholders in many companies based in Primorsky Krai. They were investing capital in the strategic and operational development of local enterprises while the government was not hurrying to pay debts. Foreign investors and their representatives assisted Primorye in gaining confidence of the International Monetary Fund, European Bank for Reconstruction and Development, World Bank, many other foreign banks. As a result, the volume of investments in Primorsky Krai has considerably grown and real opportunities have emerged for many enterprises to start developing, including FESCO, PRISCO, Vostochny Port, Vladivostok Commercial Sea Port and others, writes Mr. Fox.
To gain access to financial resources, regions and enterprises should treat responsibly the obligations they undertake. However, "there is an opinion in Moscow that the events taking place in Primorye may become a serious barrier to foreign investments for entire Russia". If rejection of investments and confiscation of property belonging to investors is the officially applied "patriotic" policy of Primorye, the krai may quickly find itself on a "black list" of regions unfavorable for making investments, continues Mr. Fox.
Now, let’s consider Vostoktransflot. "Two years ago, when this company was in a critical financial position, foreign investors sold their stakes to Russian investors", asserts Mr. Fox. He further doubts "the truthfulness of official accusations brought by Primorye governmental officials against Vostoktransflot chairman of the board of directors Anatoly Milashevich" who is known outside Primorye as a "respectable person with an excellent business reputation".
Mr. Fox refutes allegations by some media that Milashevich used the receipts from the sale of VTF ships for buying FESCO shares. This stake had been acquired by "Partnerstvo" long before it became a VTF shareholder and VTF already had practically no ships after that moment.
In Mr. Fox’ opinion, the situation in Vostoktransflot vividly reflects the "interestedness" of the krai administration in "saving" local shipping and fishing companies from collapse and bankruptcy. It was the krai administration who had supported the institution of receivership in VBTRF omitting the procedure of outside management. And receivership usually ends in the liquidation of a bankrupt enterprise.
As Mr. Fox stresses, bankruptcy is to no advantage for either foreign or Russian shareholders or employees. In this case, shareholders would receive only the par value of their stakes, in the last turn at that. The practical history of the procedure of bankruptcy in Primorsky Krai hardly knows a single case when the settlement of debts extended far enough to reach shareholders.
As for FESCO, the Russian Far East’s largest transport company, our main responsibility is its protection and continuation of its operations. "We have never meant urgent sell-off of FESCO ships of massive layoffs. The existing strategic development plan of FESCO envisages alterations in the fleet composition and administrative structure during the next five years, unanimously approved in the past year by a session of the supervisory council. In last August, the council prohibited the board to sell FESCO assets and use ships as collateral on loans without preliminary approval of such operations by the council. No applications have been submitted to the council, therefore, the sell-off of assets is out of question", states Mr. Fox.
In conclusion, Mr. Fox writes, "Governor is a strong leader who has been holding Primorye in his "iron grip" for six years. And if the krai’s industry has degraded during this time, who is responsible in the first place? Why the krai administration always aims its policies at the search of those guilty in the events taking place in Primorye? May we be sure today that the krai administration knew nothing about the wrongdoings in the krai and that they were not going on at its silent consent? Attacks against foreign investors is a desperate destructive effort aimed solely at the distraction of the public’s attention from those really guilty in what is going on." Russian...
At a news conference held June 30, FESCO general director Viktor Miskov said that "at the present time, foreigners own 44.7% of FESCO stock, while the government holds 25.2%, including 5.1% sold from the stake of "FES-Invest" (FESCO hundred percent affiliate). In Miskov’s opinion, all free resources should be directed to buying up FESCO shares on the over-the-counter market, through stock exchange and all other possible sources so as to increase this stake and prevent foreign investors from getting a 50-% package of shares", although he further remarked, "I don’t think that Kenneth Dart (one of influential persons in the shipping business) believes that our company should be laid in ruins". - Prepared by Oleg KLIMENKO. Russian...
VOSTOKTRANSFLOT SHAREHOLDERS’ MEETING TOOK PLACE... OR NOT?
On June 30, an annual meeting of VTF shareholders was held in Vladivostok, according to version made public by the team lead by Anatoly Milashevish and recently dislodged from the VTF official headquarters. The meeting was attended by shareholders and their representatives holding a total of 64% of shares which enabled to meet all legal formalities and reach a required quorum.
According to an official press release, "the meeting was convened by the lawfully acting board of directors. Former VTF top managers Mistyuk and Ostapenko have been forbidden to organize shareholders’ meetings by the arbitration court’s ruling made on Jyne 22". The meeting elected a new board of Vostoktransflot, which held its first session on the same day. Anatoly Milashevich was re-elected chairman of the board and Aleksei Dmitrenko was confirmed general director. Shareholders also condemned the unlawful capture of the head office by armed criminal groupings and their attempts to take control of VTF ships, and urged the Prosecutor General’s Office to restore law and order in VTF. They warned all parties concerned that "actions undertook by Ostapenko and Mistyuk in VTF’s name have no legal effect for the company as being taken by persons lacking proper authorization".
The team led by Mr. Ostapenko has circulated its own press release saying that no annual meeting of VTF shareholders could have been conducted because "there is irrefutable evidence the Milashevich-Fox group did not own and doesn’t own presently not only a controlling interest but even any significant package of VTF shares, and, therefore, its representatives in the previous board of directors had been illegitimate".
The only conclusion to be drawn from this story: the war is going on. - Yevgeny ITAROV. Russian...
PRISCO WILL PAY DIVIDENDS
An annual meeting of the Primorsk Shipping Company was held June 30.
"ZR" FILE: The authorized capital of PRISCO did not change in 1998 and, as before, amounts to 553.05 million rubles. Total number of shares is 22,122,000 at a par value of 25 rubles. As of the date of the annual meeting, 6,671 shareholders were listed in the register (for reference, 5,792 in 1997).
PRISCO revenues in 1998 totaled 411,889,000 rubles and expenditures were 272,151,000 rubles. Profits retained by the company and available for distribution were 104,113,000 rubles.
Considering the above results, shareholders set dividends at an annual rate of 1.8% on the authorized capital (0.46 rubles per share versus 0.29 a year before). Overall, 10,176,120 rubles will be directed for dividends.
The newly elected board of directors includes Mikhail Veselov, general director of Nakhodka Fish Port, Aleksandr Kirillichev, PRISCO general director, Yevgeny Kozmin, PRISCO U.K. managing director, Yury Kolesnichenko, Nakhodka-Torgmortrans-Service general director, Oleg Stepanov, general director of the joint-stock company "Veshki", Aleksandr Migunov, Sinchart Shipping director, Sergei Popravko, director of PRISCO Fleet Department. Chairman of the board of directors was re-elected Yury Kolesnichenko. - Yury ROGOV. Russian...
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