Kremlin wants more control over state corporations

Russia's Medvedev supports measures to tighten control over state corporations

• By Vladimir Isachenkov, Associated Press Writer
• On 12:09 pm EST, Tuesday November 10, 2009

MOSCOW (AP) -- Russian President Dmitry Medvedev on Tuesday gave his preliminary approval to a set of measures intended to streamline state-owned corporate giants and increase their transparency.

Medvedev has ordered an examination of the finances of the state corporations, which control some of Russia's major industrial companies and have been accused of inefficiency.

Prosecutor General Yuri Chaika reported to Medvedev on Tuesday that the probe revealed evidence of the misuse of state funds and excessive payments to top managers. There also were cases in which the corporations have simply failed to do the jobs they are supposed to do, Chaika said.

At the same meeting, the head of the presidential control department, Konstantin Chuichenko, proposed turning some state corporations in competitive industries into joint stock companies and, for those that face little competition, setting deadlines for them to get their assigned tasks done and cease operations.

Chuichenko said it also was necessary to increase transparency of state corporations and accountability of its officials.

Medvedev hailed Chuichenko's proposals as "quite reasonable" and said he would address the issue in more detail in his state of the nation address later this week.

Prime Minister Vladimir Putin oversaw the creation of several state corporations when he was president in an effort to boost government clout in key industries and to consolidate efforts in rebuilding sectors deemed crucial to the economy.

Critics said the corporations have proven to be inefficient and incapable of dealing with the economic crisis. They also have warned of a major potential for corruption and drawn parallels with the inefficient centralized economy of the Soviet era.

One of the state corporations Chaika said had misspent or made inefficient use of state funds is Russian Technologies, which includes more than 400 industrial and military companies, including 25 percent of AvtoVAZ, Russia's largest carmaker. Others are the nanotechnology company, Rosnano; the construction company responsible for the 2014 Sochi Olympics, Olimpstroy; and the agency overseeing Russia's crumbling municipal housing, the ITAR-Tass news agency reported.

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