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Daily Mail (London): ‘Hyperactive’ Oleg Mitvol

Alex Brummer column
Published: Apr 20, 2007

The timing of the assault by Aviva on the Russian savings market could have been better. Having failed to match its competitor the Pru in China, one of the fast expanding BRIC economies, Aviva fancies its chances in Russia where it has a connection dating back to 1856 and the Czars.

It is planning a massive direct sales staff of 5,000 and is aiming to grab 10pc of the Russian market. As in much of the rest of Europe, where it is market leader, Aviva is also hoping to reach customers through banking alliances.

Unfortunately for Aviva, its big launch coincides with the latest assault on a British natural resources firm by the Russian authorities.

Oleg Mitvol, the hyperactive deputy chief of the Russian environmental agency, has single-handedly managed to put the skids under shares of Imperial Energy on shifting grounds ranging from failure to meet exploration targets to green concerns.

All that Imperial investors can do is watch with alarm as the shares nosedive. It is not Mitvol’s first attempt to intimidate British-owned natural resource firms.

Last year he led an environmental campaign against mighty Royal Dutch Shell, which resulted in the company selling off a half stake in its Sakhalin project to state-owned Gazprom. Gold producer Peter Hambro Mining also took a tumble at one point when Mitvol started to make threatening noises.

It is widely assumed that Mitvol, activist environmentalist as he may be, tends to act with the Kremlin’s blessing. Relations between Moscow and London, irrespective of commercial risks, are not great at present.

The Kremlin has relaunched its effort to extradite oligarch Boris Berezovsky to Russia, after the tycoon made the foolhardy suggestion that President Vladmir Putin should be overthrown. The Russian ambassador went as far as to call Home Secretary John Reid asking for his personal intervention.

Moreover, the embers of a diplomatic row have yet to dampen down from last year’s poisoning of Alexander Litvinenko in a London restaurant. It might be better for Aviva if its steers clear of Russian life cover, the risks look most unattractive.

SWANN POST: You cannot criticise Kate Swann for lack of energy. Her latest wheeze for bringing the customers crowding into WH Smith’s stores is to turn 70 high street stores into Post Offices. It will now be one-stop shopping for greeting cards and the stamps.

Not everyone is pleased with Swann’s latest flight of fancy. Predictably, the Communications Workers Union — which has never seen a change in working practices which it likes — is threatening industrial action.

Such threats can be damaging. Burberry, despite loyalty to British design and raincoat manufacture, has been demonised by the unions for closing a polo-shirt factory in Treorchy in Wales.

Back on the high street Swann is still pretending that sales don’t matter and its only profits which count. So we are meant to be impressed with a 6pc drop in like-for-like sales.

This may be fine while Swann is weaning the group off DVDs and CDs and back towards books and stationery. The difficulty is that like entertainment offerings, both these categories also face severe price competition from the supermarkets and online.

Earnings may be up but widening margins and allowing sales to fall away is in the long run a route to ruin.

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

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