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Putin Pounces on Private Companies

Kremlin uses financial crisis to further its aims of 'renationalizing'

By Jason Farago, Newser Staff

Posted Dec 8, 2008 8:42 AM CST

(Newser) – Vladimir Putin has insisted for years that Russia made a colossal mistake by privatizing the nation's giant reserves of oil, gas, and other natural resources after the fall of the Soviet Union. The president-turned-prime minister has made muscular efforts to renationalize those industries—most notoriously the Yukos oil company, whose CEO is in a Siberian jail. Now the Kremlin is using the economic crisis as leverage to take over troubled companies, the New York Times reports.

In one striking case this year, a Putin deputy called a private meeting with a billionaire mining oligarch, whom he threatened with crushing financial penalties for an old accident for which the company had not been blamed. News of that meeting caused the company's stock to tank, costing the CEO billions and setting it up for a government takeover. "It looks really aggressive and really risky," says one Moscow banker, who called it "the most serious attack on a company since Yukos."

[Images (5)]

[Quotes (1)]

Prime Minister Vladimir Putin speaks in a nationally broadcast, live question-and-answer session in Moscow on Thursday, Dec. 4, 2008. (AP Photo/RIA-Novosti, Alexei Druzhinin, Pool)

A man walks in a shop, as Russian Prime Minister Vladimir Putin, is seen on TV screens behind, in Moscow, Russia, on Thursday, Dec. 4, 2008. (AP Photo/ Alexander Zemlianichenko)

Construction migrant workers warm themselves during a strike in the Ural Mountains city of Yekaterinburg, about 900 miles east of Moscow, on Wednesday, Dec. 3, 2008. (AP Photo/Alexei Vladykin)

People walk by an exchange booth in downtown Moscow, Russia, Thursday, Nov. 20, 2008. (AP Photo/Ivan Sekretarev)

A shop assistant walks past a display of television sets, as Prime Minister Vladimir Putin, is seen on screens, at a shop in Moscow, Thursday, Dec. 4, 2008. (AP Photo/ Mikhail Metzel)

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He is the state’s main raider. He organizes these raider seizures, sometimes to the benefit of the state, or sometimes to the benefit of companies that are friendly to him. - Olga Kryshtanovskaya, Kremlin expert

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Putin Pounces on Private Companies