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Russia: FIGs tighten their grip on Russia

Who is going to end up in control of Russia's leading industrial companies when the period of restructuring that has followed privatization finally draws to a close? More evidence emerged in December that it's likely to be the 46 financial-industrial groups (Figs) that have sprung up over the past three years. Last month two of them, Most Bank and Alfa Bank, came forward as the leading contenders for a large stake in a new holding company that will control the telephone sector. The Figs already link together over 60 banks and 20 other major financial institutions as well as 650 industrial giants including Norilsk Nickel, the world's largest nickel producer, and oil company Yukos.

The latest tender signals a turnround in the government's approach to telecommunications. Until a year ago it seemed that it would follow the example of central Europe and entrust the restructuring of its network to foreigners. Three years' work by a group of advisers led by NM Rothschild culminated in November 1995 when Stet of Italy bid to take a stake in Svyazinvest, a holding company for regional telephone companies. But the deal turned sour one month later with Stet accusing the Russians of obfuscation.

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