FSB: Getting poisonous

There is no doubt the poisoning in London of former KGB officer Alexander Litvinenko, will damage Western investor confidence in Russia.

Not that that confidence is much to write home about anyhow, given the corruption, chicanery, dishonesty and downright criminality of some of the top sectors of Russian business under Vladimir Putin.

There is unprecedented interest in Russian companies raising money on the London Stock Exchange at present. A huge list of Russian companies – many coming from the energy sector such as Rosneft – have had full shares or depository receipts listed on the London Stock Exchange.

The electricity generator, OGK-5, is one of the latest businesses to successfully raise money despite unease about the way western groups such as Shell and BP are being treated in Russia.

While we must wait to see who is responsible, this bizaare murder will add fuel to the smouldering fires of distrust in the western media about the rule of law in Russia and the activities of the Russian state.

Investors read more and more reports about Russia being an authoritarian state where opposition is stifled, and where the legal system is controlled by the government and used mainly for taking over cash generating companies.

The Organisation for Economic Co-operation and Development (OECD) this week criticized the Russian government for its expansion into important economic sectors. It also noted concerns about Gazprom the state-run energy company, and its insatiable appetite for acquiring assets.

The fact is, the Kremlin is more concerned about asserting its own political power than worrying about what foreign politicians or investors think.

Last week Putin said business in Russia has improved its sense of social responsibility, and that “business has become much more responsible than in the mid-1990s. The state, too, has toughened its response to businesses’ antisocial behavior.”

Pardon those of us trying to do honest business in Russia for spluttering in disbelief. There is an old saying the the fish rots from the head, and here we have the head speaking to us about business ethics, while the FSB is running around with its dirsty tricks, implementing the Kremlin’s own antisocial policies of industrial grab, smash and burn.

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