Russia Finance Minister seeks more control over state companies

GYEONGJU, South Korea (BestGrowthStock) – Russia’s finance ministry is seeking the right to approve big borrowing and investment plans of state-controlled companies, in order to better coordinate issuance and crackdown on any excesses.

“We are monitoring the situation…but here the issue is the next step, … the possibility of some kind of control — to say: ‘look, guys, this is excessive’,” deputy finance minister Dmitry Pankin told reporters on Saturday on the sidelines of a G20 finance officials meeting in South Korea.

Heavy levels of corporate debt — accumulated during a near decade of oil-fueled economic boom — accentuated the impact of the global economic crisis on Russia, prompting the government to step in to help some companies refinance their obligations.

With the economy recovering and companies borrowing again, official are keen that mistakes are not repeated.

Pankin said that for now the ministry has not seen signs of excessive borrowing, but that there have been instances of poor coordination on timing between state companies.

Since the start of the year, Russian corporates have placed nearly $20 billion worth of Eurobonds, with state-controlled companies and banks making up more than half of the total.

The proposals — under which the ministry would have to approve big decisions on budget, investment and borrowing — are now ready, but the next step is to convince the Economy Ministry of their necessity.

“They think we are trying to control the companies too much,” Pankin said.

(Writing by Toni Vorobyova; editing by Patrick Graham)

Russia Finance Minister seeks more control over state companies