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By John Helmer, Moscow

To modernize, privatize, incentivize, and win the votes of Russians yearning to be free, President Dmitry Medvedev has ordered the senior ministers of the federal government to vacate their seats on the boards of state companies. First to go – on his own resignation, eleven weeks ahead of deadline – is Deputy Prime Minister Igor Sechin.

Deputy Prime Minister Igor Shuvalov has been a cheerleader for modernization, privatization, incentivization, and also for Medvedev’s reelection. So it is natural to ask him if he intends to vacate the seat he recently took on the board of the biggest and most valuable real estate project in Moscow – the redevelopment of the grounds of the Exhibition of the Achievements of the National Economy (VDNKh).

Initially planned in 1935, the showgrounds cover more than 2.3 million square metres, and were first opened in August of 1939, to an average of 40,000 visitors a day. After surviving the Germans, the exhibition park and its pavilions reopened in 1954, with an average annual attendance of 11 million. In 1986, I saw the biggest pig in the Soviet Union in one of the livestock pavilions. Boris Yeltsin followed, renaming VDNKh the All-Russia Exhibition Centre. Today its legal and administrative status is that of a wholly state-owned joint stock company (GAO) called Vserossiyskiy Vystavochny Centr (sic) — VVC.

And that’s the colossal piece of state property upon whose redevelopment board, now directed by two well-known commercial developers, Shuvalov has sat for the past two months.

When he was asked if he intends to retain this board seat, Shuvalov’s secretary replied that the deputy prime minister has the following rule: he does not accept questions by email, facsimile, or telephone. All questions, Shuvalov’s spokesman said, must be submitted by conventional letter, mailed through the postal service. Only invitations are accepted by fax, she added.


The developers who have invited Shuvalov to preside over their project have been identified as Zarakh Iliev and God Nisanov (right image).

In Moscow they own the Ukraine Hotel, the Radisson Slavyanskaya Hotel, a couple of shopping centres, some restaurants, and other real estate in the capital. Their assets are reportedly worth $1.1 billion apiece. They were asked to confirm if they expect Shuvalov to continue leading their board. They and VVC did not respond.

The Moscow city government and the Russian State Property Agency (Rosimushchestvo) did not respond to the request that they confirm their current shareholding in VVC, and the date on which they voted to approve the operating concession for Iliev and Nisanov. Rosimushchestvo declared they have the right not to answer questions within seven days.

WE STAND CORRECTED: the day after questions were filed with VVC, Iliev and Nisanov, the following response was received from Marina Yegorova, head of public relations for VVC: “The candidature of First Deputy Prime Minister Igor Shuvalov was really considered for possible membership on the Board of Directors of OAO “GAO VVC”. However, since Dmitry Medvedev initiated the procedure of revocation of state officials from the boards of directors of state-owned companies, Igor Shuvalov has repeatedly told the media that he cannot join the Board of Directors of OAO “GAO VVC”. Nevertheless, the Russian government remains the main shareholder of VVC.” Yegorova adds that in February, Shuvalov’s candidacy to be chairman of the board was announced, but that his appointment was not due to be formalized until June. She also quoted Shuvalov as saying on the Vesti television programme on April 2: “Currently the task is that before July 1, when all the meetings of shareholders in joint stock companies with state capital participation are held, the ministers, who are also market regulators and chair the company boards must leave their posts. This year I was nominated to the supervisory board of VVC, and now it is a very good reason for me to reject this nomination.”

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