Russian Press - Behind the Headlines, February 8

© Alex StefflerRussian Press - Behind the Headlines, February 8
Russian Press - Behind the Headlines, February 8 - Sputnik International
Kirsan Ilyumzhinov’s Return to Politics/ Russian Regions Back Volunteer Bill, Volunteers Don’t/ Iskander Makhmudov to Merge Copper and Coal: New Company to be Worth $12 Billion

MOSCOW, February 8 (RIA Novosti)


Kirsan Ilyumzhinov’s Return to Politics

The former head of the Republic of Kalmykia and current president of FIDE (World Chess Federation), Kirsan Ilyumzhinov, is returning to politics. He plans to nominate himself as a candidate for the Kalmykian parliament – representing either the United Russia or A Just Russia parties. It has been suggested that the dialogue with A Just Russia  is being used to manipulate an offer out of United Russia. 

A source from A Just Russia confirmed Ilyumzhunov’s interest in the party but suggested he would prefer to represent United Russia if given a chance.

The politician in question denies any connection with A Just Russia but refuses to comment on his involvement with United Russia.

“This must be someone’s idea of provocation. Why not the Communists or the Liberal Democrats? Don’t forget, I was one of the founders of the union that later became United Russia. I’m a member of this party,” says Ilyumzhinov.

Kirsan Ilyumzhinov was the head of Kalmykia for 17 years, until 2010 when many governors were persuaded to resign to make way for younger successors. Ilyumzhinov was replaced by Alexei Orlov, the former deputy head of the republican government.

The positive relationship between Ilyumzhinov and his replacement soon went awry and even led to a conflict between Orlov and the United Russia office in Elista which was supported by Ilyumzhinov. Both were lobbying for their candidates for a city manager. The conflict was so serious that the federal government had to intervene.

“Orlov was methodically forcing Ilyumzhinov’s people out of his government and forming his own team. Ilyumzhinov first tried to scheme against his former protégé and now he is looking for ways to get back into politics,” says Rostislav Turovsky, Vice President of the Center for Political Technology.

Turovsky adds that the Kremlin is concerned that this squabble could hinder United Russia’s performance in the election. Should Ilyumzhinov actually represent A Just Russia, the vote could be too close. However, the analyst believes United Russia will give up the top position on its candidate list for Ilyumzhinov.

Kirsan Ilyumzhinov is not the first high-profile regional politician to plan a comeback. Various reports suggest that former Moscow mayor Yury Luzhkov plans to get involved in the Moscow City Duma elections, if not as a candidate but at least  as an advisor to Civic Platform leader Mikhail Prokhorov.


Russian Regions Back Volunteer Bill, Volunteers Don’t

Representatives of regional legislatures and volunteer organizations supported a bill on volunteer activity at a meeting with the Federation Council on Thursday, although it is still criticized by many volunteer group leaders.

The Federation Council set up a working group of deputies and volunteers to draft the bill in the spring of 2012.

A framework concept was worked out last fall jointly with the Volunteers Supporting Orphans fund and other groups. However, in January the Federation Council said the draft bill had already been finished and sent to the government for approval, while volunteer groups said it was drawn up without them. The Federation Council claimed the working group failed to produce a draft and that its meetings were more like public hearings.

The bill calls for establishing a government-appointed authority to draft state policies with regard to the volunteer movement and to officially register volunteers. The working group criticized this last idea accusing the lawmakers of trying to misappropriate the funding.

Regional parliaments and volunteer groups reported on their local volunteer laws during a conference call with the Federation Council on Thursday. Deputy Speaker of the Voronezh Region Duma, Irina Trankova, said they adopted a regional volunteer law in 2010 after the volunteer movement grew stronger during the wildfire disaster.

“Under this law, the authorities provide volunteers with various types of support such as life insurance for volunteer firefighters,” she said.

“When university students show their volunteer IDs to their friends, they offer a model of high morals and encourage others to join our movement,” said Vasily Chumachenko, the leader of a volunteer movement in the Rostov Region. “But volunteer development in Russia is restricted by the lack of relevant legislation.”

The lawmakers and volunteers in the Samara Region alone refused to support the bill in the current version because it does not contain any new provisions that are not included in the existing laws on charity or on the Olympic Games.

When asked why the opponents of the bill were not included in the discussion, Valery Ryazansky, head of the upper house social policy committee, said they were not holding a roundtable discussion, but a conference with regional legislators and administrators. The participants agreed that the bill needs to be adopted after it is amended based on the proposals made.

Alexander Borisov, who heads the working group, said the bill was still at the government but no proposals had been advanced yet. The bill is to be submitted to the State Duma for its spring session, Ryazansky said.

“We insist that this bill will create a government-conceived arrangement for the government’s sake,” said Yelena Alshanskaya, President of Volunteers Supporting Orphans, who helped develop the framework concept. She said the working group now includes only government-approved volunteers, because independent ones have been shut out.

“I recently attended a public debate on this bill. I had the feeling I was invited by mistake because all the others were unanimous,” she added.


Iskander Makhmudov to Merge Copper and Coal: New Company to be Worth $12 Billion

Iskander Makhmudov is the co-owner of both the Urals Mining and Metals Company (UMMC) and Kuzbassrazrezugol (Kuzbass). Together with Andrei Bokarev, Chairman of the Board of Kuzbassrazrezugol, he controls 80 percent of the coal company and with UMMC General Director Andrei Kozitsyn, 85 percent of the metals holding.

In 2006, the partners decided to centralize the control of the two companies. The system proved workable, says a source close to the UMMC owners. Therefore, last year they decided to merge the two companies.

In August, UMMC announced the purchase of 25.63 percent of Kuzbass stock and on December 29, increased the stake to 51 percent. The securities were mainly bought from core shareholders. The amount paid was not revealed.

Now UMMC is lining up an offer to buy back shares from the minority shareholders of Kuzbass. The source declined to name the buyback price, only saying the company’s estimated value is $4 billion.

The offer is primarily targeted at Kuzbass minority shareholders, says the source, although he did not rule out that UMMC might own 100 percent of Kuzbass in the future and that the companies will merge. “This will add to the value of the consolidated company to the benefit of the shareholders if they decide to sell some of the stock to a strategic investor or hold an IPO,” the source told Vedomosti.

As of January 10, UMMC is owned by Makhmudov (50.01 percent), Kozitsyn (34.99 percent), commercial director Eduard Chukhlebov and board member Igor Kudryashkin (each holding 7.5 percent), revealed Koltso Urala Bank, which is co-owned by the metals giant.

UMMC has made a good offer to the minority holders, believes BKS expert Kirill Chuiko. It provides for a 5 percent bonus on the current quotations (as of January 31 Kuzbass had capitalized assets of $3.21 billion) and more than a 30 percent bonus on the weighted average over the past six months. He notes that very few Kuzbass shares are being traded freely at the moment, about 5 percent.

UMMC could be valued at about $9 billion, says RMG expert Andrei Tretelnikov. The united company will be valued at over $12 billion, he adds. In the case of an IPO, it could become one of Russia’s highest-priced mining and metals companies. 

In value it compares with Mechel ($2.71 billion), Evraz ($4.2 billion), UC Rusal ($9.3 billion), Severstal ($10.5 billion), NLMK ($13.4 billion), and Norilsk Nikel ($37.6 billion).

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