Putin voices regret over criticism of metals group Mechel

23rd July 2010, Comments 0 comments

Prime Minister Vladimir Putin said on Friday he regretted his criticism of Russian metals group Mechel two years ago which led to an instant collapse of its share price, Russian news agencies reported.

The steel major's market capitalisation plunged billions of dollars after Putin issued a stinging verbal attack against it for alleged price-fixing, calling for "a doctor and prosecutor" to be sent to school Mechel's owner.

Putin said he regretted the incident -- that sparked a 40-percent drop in the firms' shares -- since Mechel had reformed its practices, but he upheld it as a warning to Russian metals firms to curtail price hikes.

"I remember the attack on Mechel, I can only regret that it led to a fall in capitalisation. I want to thank (chief shareholder) Igor Zyuzin: Everything I said, he did. He is acting correctly," Putin was quoted by Interfax and RIA Novosti as saying.

Chairing a meeting on the metals industry in the Urals mining region of Chelyabinsk, the Russian premier sided with buyers threatening tougher measures against firms suspected of price-fixing.

"If we see that measures taken by the government... are insufficient insufficient, we will have to toughen them," he said.

The comments came after the head of the federal anti-monopoly service accused Russian metals and coal producers of pricing 15-20 percent above global market prices.

"Our anti-monopoly investigation shows that in a number of cases absolutely disgraceful and inadmissible practices continue vis a vis the Russian consumers," Igor Artemyev told the meeting.

"The majority of the metals and coal companies here sell their output to the Russian consumers at 15-20 percent more than the world prices."

© 2010 AFP

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