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DUMA SPEAKER REMOVED FROM OFFICE
The deputies of the krai duma faction "Revival of Primorye" have managed to oust speaker Sergei Dudnik from his position. However, the validity of this decision remains dubious.
It has been clear for a long time that the issue of dismissing the duma speaker, acting in opposition to Gov. Nazdratenko, will come to the fore again after the recent election.
The January 26 session was attended by 36 lawmakers out of 39. Vote showed that 20 ballots were cast against Dudnik (35 ballots returned, of which 3 recognized null and void, 2 were neither pro nor contra, and 10 were in favor of Dudnik). One ballot had a formal defect, and the telling commission decided that it is not valid.
But Dudnik's opponents argued against this decision at the session called the next day, and proposed to put the validity of this ballot on vote. After that, 12 deputies left the session-room, the speaker pronounced the session closed and also quit.
But the anti-Dudnik group decided to hold another session on the same day (at 13:00), taking as guidance Clause 26 of Duma Rules, which sets forth that "a session is recognized valid, when attended by a majority of duma deputies; in this, the quorum is determined by the number of deputies present at the session".
The required majority, 20 deputies, were present in the session-room and vice speaker Sergei Zhekov opened the session, which took place behind the closed door. After it ended, it became known that 20 lawmakers recognized the validity of the previous vote and confirmed the decision to remove Dudnik from his office.
By opinion of duma deputies, who were not present on the notorious session, "the order of the executive power has been fulfilled and the person, conducting an independent policy has been removed". Russian...
ANDREW FOX VISITS VLADIVOSTOK
Andrew Fox is best-known foreign investor in Primorye. He is chairman of board of "Tiger Securities", honorary consul of United Kingdom in the Russian Far East, member of the board of FESCO, Vladivostok Commercial Sea Port, Dalrybbank, SpasskCement, Vostochny Port, Nakhodka Commercial Sea Port, Ussuriisky Balsam and others. He hasn't been in Primorye, which he calls the birthplace of his capital, for nearly seven months. A "ZR" journalist met with him and put several questions.
- Are you withdrawing from Primorye?
Our interest in Primorye was of economic nature at all times. Today, our position, which we hold as shareholders and board members of local enterprises, remains unaltered: we have come here to do business honestly and that's all. Now, we have to give more attention to development of investments outside Primorsky Krai and are interested in Uzbekistan. As for Primorye, we will defend here our property. Although many attempts were made recently to involve us in politics, this is not our idea.
- Then, what does interest you?
Practically all major enterprises of Primorye, except Dalmoreproduct. This isn't a big secret.
- Do you have no interest to Dalmoreproduct, because this company had found owners long ago?
Not quite so. We could have acquired a stake in Dalmoreproduct as well. 5-6 years ago, we had to make a choice between it and VBTRF, and the latter seemed more attractive to us. Perhaps, it wasn't a right decision.
- Do you believe that the acquisition of a package of shares of Vladivostok commercial sea port is to your credit?
Overall, the port is doing rather well. Alterations in the exchange rate policy became an advantage for the RFE ports. Recently, metal exports through Vladivostok port considerably grew, which appreciably improved its financial results. Another thing is that foreign investors' interest to Russia and, in particular, Primorye has been steadily subsiding for the last two years. The more so that the shares we have here are second-rate or even third- and fourth-rate. If the market goes up, this will have effect only on Russia's top 10 or 20 enterprises.
- You have one local blue chip, FESCO. What is your position toward this company?
Yes, we have some problems and unresolved questions there. But we try to come to terms with everybody. We don't believe that FESCO supervisory council works as it should. FESCO lacks "transparency", although we do our best to help it in this. I will put it plainly: we are not satisfied with FESCO performance.
- What events, in your opinion, can take place in FESCO in the near future? It seems that change of CEO is a decided matter.
I'm not sure. Yes, there are some differences with Viktor Miskov and with others, but it is not simple just to replace him for another person. I'm not sure that everything will change once a new person comes. Indeed, very serious discussions about who and when may replace Miskov are in the process. Nobody has a fixed position as yet.
- Does everybody wait for a serious candidate?
It's hard to give an answer to this question. We have been present in Primorye for some time and know all possible candidatures. It is unlikely that a stranger will appear and become a strong candidate. But, in principle, we cannot rule this out. All contenders will have advantages and disadvantages. We and other shareholders will stick to a position, close to us, namely, issues relating to the prospects of the company, its transparency, etc. As usual, everything will be decided before the meeting, perhaps, by the end of March everything will be clear. Discussions are already under way. In a week or two, it will become clear what election procedure will be used. Then, it will be easier to make predictions.
- What can you say about PRISCO director Aleksandr Kirilichev as one of candidates for top manager of FESCO?
I know practically nothing about him and his company, although our clients own nearly 10% of PRISCO shares. Yes, we were close to membership in its board of directors some time ago, but, frankly speaking, we didn't have any special interest to PRISCO. No comparison can be made between FESCO and PRISCO, they are quite different companies. For instance, PRISCO had half of its fleet in offshore zones already at the moment of privatization. FESCO has a ramified network of agents, which does credit to it. PRISCO does not have such a network. But PRISCO has a greater transparency. It is more clear in Kirilichev's company, for whom work his managers. They work for themselves.
- It seems that political battles are subsiding in Primorye. How are prospects for doing business in Primorye seen from abroad?
Investors are cautious, of course. But they always were. Still, they are optimists as well. Otherwise, they wouldn't have invested anything in Russia. The past happenings had a negative effect, but this is history now. We'll see: Maybe, something has changed to the better.
- Weren't you scared when you were buying a ticket to Vladivostok?
It's a difficult question and I cannot answer it. Russian...
MORE LOANS FROM EBRD
As "ZR" already reported, the Vladivostok regional representation of the European Bank for Reconstruction and Development turned five years recently.
During this time, its experts have examined a great many of investment projects, but, according to EBRD regional representative Elena Danysh, only 8 projects were recognized commercially viable. One of them is Mutnovskaya Geothermal Power Plant, cap. 40 megawatt, on Kamchatka, for which EBRD provided 85.6 mln ECU of required 128.356 mln ECU. This project will help resolve the peninsula's energy problems. Another project is the golden ore deposit Kubaka, Magadan Oblast, developed jointly with the company "Cyprus". EBRD investments in this project amount to 37.5 mln ECU. In Primorsky Krai, EBRD loans were provided to PRISCO shipping company (35.5 mln ECU), FESCO (12.8 mln ECU and and $31.2 mln), New Telephone Company ($17 mln). The Nakhodka FEZ received 181,200 ECU as a grant to pay for consulting services. Also, EBRD extended loans to Sakhalin Shipping Company (18 mln ECU) and "Buryatzoloto" gold mining company (7.71 and 5.78 mln ECU).
The Russian Small Business Fund was set up to provide assistance to small and medium business. Its resources amount to $300 million (50% from EBRD and 50% from G-7 nations). During the last five years, it has provided over 30,000 to entrepreneurs and corporate entities for a total of above $370 mln, and during 2.5 years of its work in the Russian Far East, the fund has extended more than 650 loans for a total of about $8 mln. The fund works through its partner banks, Dalnevostochny and Savings Bank of Russia (Sberbank). Russian...
BANKRUPT BANKS CLEAR DEBTS TO DEPOSITORS
In this issue, "ZR" sums up available information about payments, being made by bankrupt banks to their depositors.
Incombank. Debts to Primorye depositors amount to $4.14 mln and 6.55 mln rubles. This bank has greatest problems in clearing debts to depositors. Its Moscow administration declared in January that debts to individuals will be cleared by March.
SBS-Agro. Its Primorye branch owes to depositors only some 70,000 rubles, but hasn't started giving deposits back. ARCO earmarked 20 mln rubles for all SBS-Agro branches, and payments will not exceed 5,000 rubles at a time.
Promstroibank was pronounced bankrupt in November. Overall liabilities total about $150 mln. This bank owes some 1.2 mln rubles to Primorians, and prospects for debts clearance are vague.
Primorye branch of RosCredit cleared off debts to depositors through Impexbank.
As for local banks, the most responsive to depositors banking institution turned out to be Vostokinvestbank - it paid out all deposits in full (6.7 mln rubles).
Vladbank paid 2.5 mln rubles to depositors. In this, the bank returned both the principal and interest. Bailout management will remain in effect until April 2000.
"Nakhodka" Bank paid to its depositors 14 mln rubles, or more than 40%. Total debt amounts to 51.214 mln rubles.
ATR-Vneshtorgbank paid 11% of each deposit in January. Overall debt to depositors totals 6.6 mln rubles.
Here, the list of bankrupt banks, paying debts, can be closed.
Bank "Vladivostok" paid only 2% of debts to depositors, totaling 7.752 mln rubles.
Dalmestbank owes 2.9 mln rubles to depositors, of which 4% of each deposit is paid.
Trade-Industrial Bank has no available assets to clear off 9 mln rubles of debts to depositors.
Russian Pacific Bank has not started payments as yet, although owes about 11 mln rubles to depositors.
Evrobank and First Primorsky are currently undergoing the process of liquidation. Evrobank owes some 5 mln rubles to depositors and will be unable to start clearing off debts before March. First Primorsky was pronounced bankrupt on the eve of the new year. As of that moment, deposits totaled slightly below one million rubles.
Special thing is Dalrybbank's debts to Primorians. As of the moment of its take-over by ARCO, it totaled 1 mln rubles and $1 mln. The amicable settlement, currently being prepared by the bank, stipulates full clearance of debts during one and half years, and 5,000 rubles per deposit will supposedly be paid in the coming spring. Russian...
BANKERS SET UP JOINT VENTURE
Primcard, a venture with foreign investments, was registered at the end of the past year in Primorye. It was set up by Primsotsbank, Dalnevostochny bank, Vladivostok commercial sea port, and the company "Imedie" (France), which owns 63% (31,500 rubles) of charter capital. The new JV will be engaged in "development, introduction and operation of a cash-free account settlement system based on plastic cards with built-in microprocessors". Russian...
DALPOLYMETAL KEEPS AFLOAT
Shortly before leaving his office, President Yeltsin signed December 30 a decree, permitting mining companies to export during two years ore concentrates containing precious metals.
Were it not for this "gift" from the resigning President, Dalpolymetal would have to suspend operations for an indeterminate time. Another "gift", coming from the government - new customs duty on export-bound concentrates - cost miners additional 22 mln rubles in unforeseen expenses.
Final results for 1999 will be summed up by March, but, according to DPM deputy director general Aleksei Mogilny, this year was good for his company. Profitability rate exceeded 40%. More than 25 mln rubles of payables, totaling 400 mln rubles, were cleared off. Wage arrears were reduced to 4.7 mln rubles down from 17 mln a year ago and will be paid in full by April. Russian...
DALMOREPRODUCT WARNS AGAINST POSSIBLE FAKES
Dalmoreproduct's produce enjoys good reputation both in the domestic and international market. However, its brand name is misused more frequently.
According to numerous reports from its foreign partners, the markets of France, USA, United Kingdom, Belgium, Japan are full of canned crab of dubious quality, delivered primarily by small companies. They make this product from frozen crab, often with chemical additives, and sell under the world-known trademark "Chatka". Low-grade canned crab, produced under primitive technologies and with grave violations of existing requirements, but bearing Dalmoreproduct's brand name, can be met in Russia as well.
In fact, according to DMP vice president G. Fadeev, the widely-known product under the brand name of "Chatka" had been produced only by Dalmoreproduct (since 1930). This name does not require advertising and consumers trust it. But, ironically, DMP hasn't produced a single can of crab after 1998, because of limited quotas for Kamchatka crab harvesting:
Other DMP products, for instance, canned saury, are also faked. Thus, a DMP employee bought canned saury in San Francisco with DMP's brand name on the label, but the marking on the top of the can helped identify its true producer, the company "Atlantica" from Ukraine. Besides, tests showed that sold as saury was Atlantic sardine... Russian...
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