Putin Says Russian Government has Control of Rosneftegaz's Money

The Russian government is in control of cash on the books of state holding company Rosneftegaz and spending from those reserves is "absolutely transparent", President Vladimir Putin said on Friday.

 

Rosneftegaz, which has stakes in oil giant Rosneft and gas monopoly Gazprom, among other assets, transfers only part of the dividends it receives to the state budget, keeping the rest on its own accounts and prompting criticism from the finance ministry.

 

It is chaired by Igor Sechin, a powerful Putin ally who is also chief executive of Rosneft. Rosneftegaz held the equivalent of 472 billion roubles ($7.71 billion) in cash at the end of 2015, according to a November research note by Raiffeisenbank.

 

Putin told a press conference the government treated Rosneftegaz's money as a cash reserve and used it to fund certain things. These included some science and education spending in 2015 and 2016, as well as aircraft construction and some other projects, he said.

 

"It is absolutely transparent and all under the control of the government. We finance some things from there," Putin said.

 

Rosneftegaz this month sold a 19.5 percent stake in Rosneft to a consortium of commodities trader Glencore (GLCNF) and the Qatar Investment Authority (QIA), a sovereign investment fund, for a total of 692 billion roubles.

 

Glencore and the QIA were expected to contribute only a part of the funds for the deal, with the bulk to be provided via a loan from Intesa Sanpaolo and other banks.

 

Last week, Rosneftegaz said it had received proceeds from the sale. Intesa later said it was still evaluating its potential involvement in the financing, raising questions over the sources of cash transferred to the budget.

 

Putin said on Friday the state budget had received a payment from the QIA and Glencore for the Rosneft stake. He did not provide other details.