Putin Strikes Out at Steel Company
In a public outburst that sparked concern among investors and analysts, Russian Prime Minister Vladimir Putin on Tuesday lashed out at Evraz Group, one of the world’s largest steel producers. Speaking at a meeting with students in Moscow, Putin accused the company of maintaining high prices even as raw material costs dropped, the Kommersant newspaper reported on March 4th. The premier also had some harsh words for Alexander Abramov, the owner of Evraz group.
“At present, costs for everything have fallen,” Putin candidly said at the meeting, “but we don’t see a decrease in prices. After all, salaries could be increased: since expenses are lower in the cost structure.”
Putin then turned to face Abramov, who was seated nearby.
“I know how Alexander Grigoriyev Abramov works with suppliers and customers,” Putin said.
“Imagine that I’m sitting under the table as you’re conducting pricing negotiations! After all, you’re not conducting yourself by the rules of the market! People come from you with a direct order: don’t lower prices!”
When Abramov tried to protest, Putin brushed him off with a wave of the hand, exclaiming “I don’t want to hear it!”
The incident was not the first time Putin personally went against a private company for alleged abuse in price-setting. At a meeting in Nizhny Novgorod in July 2008, the premier singled out coal and mining giant Mechel, for allegedly setting domestic prices higher than international ones. Putin also pledged to “send a doctor to clear out all these problems,” for CEO Igor Zyuzin, who was not at the meeting due to illness. As result, the price of Mechel stock entered free-fall, taking other Russian companies with it as investor confidence in Russian rule-of-law faltered. Afterwards, the Federal Antimonopoly Service launched an investigation against Mechel, along with two other metallurgical companies, including Evraz Group.
