Putin steps up attacks on Russian coal company

Prime Minister Vladimir Putin of Russia on Monday made a new attack on the coal miner Mechel, saying it had evaded taxes, erasing a third of the company’s market value for the second time in a week.

The Kremlin, however, was more conciliatory toward the company, which is the largest Russian coking coal miner, leaving investors and analysts guessing whether the first discord with Putin’s new government was genuine or a political game.
“If this is an indication of things to come, Russia’s reputation will be damaged beyond repair,” said Jack Dzierwa, global strategist at U.S. Global Investors in Texas. “I would hate to see the momentum of the last eight years thrown away.”

Mechel’s market value has halved since Putin criticized the company Thursday for selling domestic coal at double the price of its exports. Investors, fearing a state campaign, have taken more than $8 billion off the table since Putin spoke.

Putin’s remarks revived memories of attacks on Yukos, once the biggest Russian oil company, which collapsed under back-tax bills and whose assets were taken over by state-run Rosneft in what many saw as a Kremlin-orchestrated campaign.

International Herald Tribune