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Financial Times: UK investors say Blair’s stance with Putin could harm business

By Catherine Belton andNeil Buckley in Moscow
Published: June 12 2007 03:00 | Last updated: June 12 2007 03:00

Business leaders with investments in Russia have hit back at the government’s mounting criticism of the Putin regime, warning that the attacks could damage British interests there.

Peter Hambro, executive chairman of Peter Hambro Mining, an Aim-listed company that is one of Russia’s biggest gold miners, said the claim from Tony Blair that western companies could shun Russia unless it shared democratic values “ran the risk of being damaging” for British businesses in Russia.

He added: “I’m not sure how much attention is paid to him.” Mr Blair is to stand downas prime minister on June 27.

Hans Jörg Rudloff, chairman of Barclays Capital, said the government was mistaken when it publicly expressed concern about the growing risks of investing in Russia, ahead of last week’s G8 talks.

“Their approach looks unbalanced,” Mr Rudloff said. “Russia’s transition to a market economy has been successful and cannot be undone.”

He also suggested the west’s growing criticism arose because of increasing global competition caused by the surge of developing economies such as Russia.

Mr Rudloff, who is a board member at state-controlled Rosneft, Russia’s biggest oil company, was one of many executives who paid homage to Russia’s growing economic might at an investment forum in St Petersburg over the weekend.

The leaders attending the forum included the heads of Deutsche Bank, Citigroup, Chevron, Royal Dutch Shell and BP.

Royal Dutch Shell was forced last November to sell control of its $20bn (£10bn) Sakhalin-2 oil and gas venture to state-controlled Gazprom. BP’s flagship Russia venture TNK-BP is now being threatened with the loss of its licence to develop the east Siberian Kovykta field.

Privately, some western diplomats say the campaigns against TNK-BP and Shell are examples of arbitrary actions that undermine the investment climate.

Mr Rudloff called these concerns “unbalanced and exaggerated” and said they “did not reflect the reality of investing in Russia”.

He said Russia’s moves to consolidate state control over strategic sectors “did not seem out of the way of how [Organisation for Economic Co-operation and Development] countries acted in the past and still act today in keeping control of a handful of national champions”.

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