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By John Helmer in Moscow

Sergei Vybornov, chief executive of Alrosa, has been omitted from the new board of directors, known as the Supervisory Board, according to a company announcement posted after the annual general shareholders meeting on June 20: http://www.alrosa.ru/press/releases/detail.php?ID=4338

Other changes in board membership have also been disclosed in the new board listing; these suggest the impact of the financial crisis on Alrosa’s operations, and of problems reportedly uncovered by the Accounting Chamber, the independent Russian state auditor. A member of the Chamber audit team said the check of Alrosa took place at the beginning of this year, and the results were reviewed by the Chamber Collegium in April. She said the results were reported to the government iun a report stamped confidential.

The new 15-member board has 5 representatives of the Sakha republic, including the Sakha President Vyacheslav Shtirov; the 2007-2008 board had 6 Sakha representatives, so the Sakha representation has been reduced in line with the 32% shareholding in Alrosa held by the regional government.

The Alrosa management had two seats on the old board — the Chief Executive Officer Sergei Vybornov and the Vice President, Ivan Demyanov. Vybornov has been omitted from the new listing, and Demyanov remains. No CEO of Alrosa has been excluded from the board before. Last week, Vybornov told an industry outlet: “Alrosa has only one shareholder — the state — who could fire me, and it has said it does not plan to do so.” Vybornov’s spokesman was contacted for comment, but his telephone was not answering.

The federal government representation on the board continues to be headed by Deputy Prime Minister and Finance Minister Alexei Kudrin. Alexander Akhpolov of the federal Finance Ministry also continues to sit on the board. Added to the new seating arrangement is Vladimir Rybkin, head of the state stockpile agency Gokhran, which is now the principal buyer of Alrosa production.

Federal ministry officials from the Kremlin and the Ministry of Natural Resources have been omitted, and in their place the board now has five new members, who have been assigned the category of what Alrosa is calling “professional counselors”. They are all from state-owned organizations, but have considerable commercial and corporate experience. The replacements are Sergei Dubinin (VTB, the state bank lender to Alrosa); Anatoly Tikhonov (VEB, the state bailout bank chaired by Prime Minister Vladimir Putin); Ilya Yuzhanov (Nomos Bank board, a commercial lender to the precious metals industry); plus Yakov Urinson (the state congomerate Rosnanoteknologii) and Fyodor Andreev (Vice president of the state railway company, RZD). The railway company has also been involved, with Alrosa, in bailing out a St. Petersburg bank, KIT Finance, in which much money was lost last year. End+

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