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Putin returns to state control to go forward

President Putin asserts that the Yukos case was a one-off attack on illegality. It's clear, though, that a plan to put Russia's biggest companies more firmly under state control and to change the balance of the economy is under way. The president, not big business, will decide which way Russia goes. Ben Aris reports.

TWO WEEKS AFTER Yukos boss Mikhail Khodorkovsky was arrested, a company official spoke out. "The relationship between government and big business has changed," said Yukos CFO Bruce Misamore, standing at the back of a press conference held early last November. "The way that Yukos is run now depends on the way that Russia is run," he predicted.

The press conference had been called to celebrate the first meeting of the joint board of YukosSibneft as the merger between oil majors Yukos and Sibneft neared completion. But at the start of December the merger was abruptly called off by Sibneft owner Roman Abramovich on what is widely believed to be Kremlin orders.

Since the arrest of Khodorkovsky by the federal security services the Kremlin has increased its grip on the country and the relations between big business and government have been put on a new basis, with business definitely on the back foot.

President Vladimir Putin effectively carried out a mini coup d'état at the end of last year and rapidly consolidated his position. The same day that Russia's richest man was arrested, Alexander Voloshin, a powerful big business ally at the heart of government, quit his job as head of the presidential administration and was replaced by two Putin loyalists.

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