Putin offers surprise truce to tycoons

RUSSIA: President Vladimir Putin has offered an unexpected truce to Russia's nervous tycoons by pledging not to investigate the murky 1990s privatisations that created a coterie of billionaire "oligarchs".

Mikhail Khodorkovsky, who made the most money of all as head of the Yukos oil company, faces a decade in jail for alleged tax evasion and fraud; his firm is being dismembered by state prosecutors, a fate which has sent a chill through Russia's super-rich.

But Mr Putin said yesterday he would not revisit the cut-price sales of most of Russia's industrial gems and immediately saw the Moscow stock exchange gain 4 per cent as investors breathed a sigh of relief that the damaging Yukos affair would not be repeated.

"I think it is possible to support shortening the statute of limitations on privatisation deals from 10 years to three years," Mr Putin told a gathering of business leaders.

"This will help the business community look into the future with greater certainty, draw up promising development plans and make new investments and, I hope, reassure entrepreneurs over the security of property rights."

Before the meeting, Arkady Volsky, head of a powerful lobbying group dubbed the "Oligarch's union" by ordinary Russians, had warned that the business climate was dismal and would get worse until "there is order in this country, without daily assassination attempts and continuous changes of the law".

Mr Putin's announcement however will not quell criticism that his administration picked on Mr Khodorkovsky because he dared to challenge the Kremlin's policies. Analysts say almost every Russian businessman from the 1990s could be charged with the same crimes as the founder of Yukos, but are now being offered an apparent amnesty.

William Browder, who runs Moscow's Hermitage Fund, called Mr Putin's initiative "dramatic and hugely significant".

"Although it isn't a pure outright amnesty, it's probably as close as you're going to get," he said. "This eliminates one of the most important barriers to investment - the fear of renationalisation. You'll see an incoming flood of pent-up capital that has been eyeing Russia but unable to invest."