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Monday, April 23, 2007

Russia's first President Yeltsin dies at 76 of heart failure

MOSCOW, April 23 (RIA Novosti) -- Boris Yeltsin, Russia's first ever democratically elected leader (1991-1999), has died at the age of 76 of long-term heart trouble. The former president died at 3:45 p.m. Moscow time (11.45 a.m. GMT) in a Moscow hospital of chronic heart problems, which resulted in massive organ failure, Sergei Mironov, the top Kremlin doctor, said. Yeltsin was born in Sverdlovsk (now Yekaterinburg) in 1931 and trained at the local Urals Polytechnic Institute. Yeltsin began his career in the construction business (1953-1968). He joined the Communist Party in 1961 and became first secretary of the party in the Sverdlovsk Region in 1976 and a member of the party's central committee in 1981. In 1985, then Soviet leader Mikhail Gorbachev appointed Yeltsin to head the Communist Party's Moscow branch, and in 1986 made him a non-voting member of the party's ruling Politburo. In October 1987, he was forced to resign from the party leadership and in 1988 from the Politburo after he challenged hardliners and criticized Gorbachev's reforms. He was appointed a deputy construction minister. In 1989, Yeltsin won elections to the Supreme Soviet (parliament), was elected Russian president by that body, and resigned from the Communist Party. He retained the presidency in the popular election in 1991, when he became Russia's first democratically elected president and Gorbachev's main liberal opponent. In August 1991, Yeltsin led the resistance to the coup by Communist hard-liners, when Gorbachev was detained at his country house. The success of opposition to the coup shifted power to reformers. In December 1991, he helped found the Commonwealth of Independent States (CIS), a new alliance in which Soviet republics were declared independent. Thereby, Yeltsin helped end attempts to preserve the Soviet Union. Gorbachev resigned as president December 25. In September 1993, Yeltsin issued a decree to dissolve the Supreme Soviet and hold parliamentary elections. A month later, he ordered the armed suppression of a coup by former Supreme Soviet members led by Vice-President Alexander Rutskoi. As president, Yeltsin moved to end state control of the economy and oversaw sweeping privatization deals, which brought fortunes to a handful of Kremlin-connected businessmen. Economic difficulties and political opposition slowed the reform. In 1994, Yeltsin ordered the suppression of Dzhokhar Dudayev's separatist regime in Chechnya. The military campaign in the breakaway republic ended in September 1996 when Russia withdrew all its troops from the republic, thereby, de facto granting Chechnya independence. In June 1996, he ran for the presidency again and defeated his main communist contender Gennady Zyuganov in the runoff elections in July. In November 1996, Yeltsin underwent quadruple heart bypass surgery and was confined to the hospital for months and appeared in public less frequently. Moreover, in the late 1990s, Russia was hit by a series of economic crises and frequent cabinet reshuffles. On New Year's Eve in 1999, Yeltsin surprised the nation by announcing his resignation and appointing then Prime Minister Vladimir Putin acting president. He is survived by his wife, daughter, grandchildren and great grandchildren.

Friday, April 13, 2007

U.S. expects fair treatment for its cos. in Russia - Gutierrez

MOSCOW, April 4 (RIA Novosti) - The United States expects Russia to treat U.S. companies doing business in the country fairly, including embattled auditor PricewaterhouseCoopers (PwC), the U.S. Commerce Secretary said Wednesday. PwC, a respected international auditing firm, has been accused by Moscow city tax officials of helping the bankrupt Yukos oil company evade taxes, and it may as a result lose its operating license in Russia. Carlos Gutierrez, who arrived in Moscow Monday to discuss Russia's bid to join the World Trade Organization (WTO) and bilateral investment, said after a meeting with Russia's economics minister, German Gref, that Washington expects any investigation into alleged violations of Russian tax legislation by PwC to be even-handed. The Moscow Arbitration Court held hearings into the PwC case March 20 and ruled that the company violated professional standards while conducting audits for Yukos in 2002-2004. It ordered the company to pay a $480,000 fine to the federal budget. The court decision could provide grounds for the Finance Ministry not to renew the auditor's auditing license, which expires May 20. PricewaterhouseCoopers' press service issued a statement at the time, saying that the audits were conducted "in full conformity with professional standards and current legislation." It said the court ruling was unsubstantiated and based on a fundamentally different understanding of an auditor's role and functions.
In addition, PwC is currently being investigated over its alleged evasion of Russian taxes. Tax authorities claim the company owes 289 million rubles ($11.12 million) in back taxes and an arbitration court has upheld the charges. The Russian division of PricewaterhouseCoopers has issued a statement saying the issue with back taxes has been settled. "We have made a full payment [of back taxes] to the budget," PwC press service said. The current situation around PwC has raised serious concerns among market participants and started to affect the company's business in Russia.
On Tuesday, carmaker AvtoVAZ [RTS: AVAZ], PwC's major Russian client for 13 years, dropped the company in favor of Ernst & Young to conduct its 2007 audit. Although there are no signs that other clients will follow AvtoVAZ's example and decide not to renew contracts with PwC, the market is largely anticipating a reaction from Gazprom [RTS: GAZP], the company's key client in Russia, which is considering applications for the upcoming tender to choose an auditor for 2007. The PwC case has already been brought up at the political level. U.S. Secretary of State Condoleezza Rice, U.S. Finance Secretary Henry Paulson and U.S. Ambassador to Russia William Burns relayed Washington's concerns to Russian officials and the Arbitration Court on various occasions. The U.S. Administration has warned Russia that revoking the operating license from the company that conducts auditing of about 50% of Russian enterprises could seriously affect the country's economy. Among possible repercussions, the U.S officials warned of reduced foreign investment, complications during Russia's WTO talks, and serious problems Russian companies could face while conducting initial placement of their shares on foreign bourses. PwC filed a license extension request March 28, and Russia's Finance Ministry should decide by May 20 whether the extension would be granted.

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