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Russian slaps fine on TNK-BP and its British CEO

Reuters UK

UPDATE 1-Russian slaps fine on TNK-BP and its British CEO

Mon Jun 23, 2008 7:52pm BST 

(Adds byline, rewrites)

By Katya Golubkova

MOSCOW, June 23 (Reuters) – Russia’s labour inspectorate said on Monday it had fined oil firm TNK-BP, owned 50-50 by BP Plc (BP.L:QuoteProfileResearch) and a group of Russian tycoons, a penalty that could force its chief executive, Robert Dudley, from his post.

This is the latest twist this year in a battle over strategy between BP and TNK-BP’s Russian investors that has grown increasingly acrimonious.

“If the company sorts out its issues by early July, there will be no more questions,” Mikhail Malyuga, deputy of inspections at the federal labour inspectorate, told Reuters.

The labour inspectorate said it handed TNK-BP the fines for employment violations.

TNK-BP now has until early July to resolve various violations found at the firm, the authorities said, and will face a second review next month. The company was fined 40,000 roubles ($1,696) and Dudley himself 3,000 roubles.

Malyuga added it is “theoretically possible” Dudley could be stripped of his managerial duties for three years if violations are not resolved and a second review is brought into play.

On June 11 the authorities carried out an unplanned inspection at TNK-BP, identifying various violations against both Russian and foreign staff regarding contracts and salaries.

A TNK-BP spokesman said the company would fulfill “all that is required of the inspectors and will eliminate any violations.”

BP and the Russian shareholders have clashed over TNK-BP’s structure and strategy since last month but many analysts believe the real dispute may be about future ownership of the company.

BP has already turned down a demand by the Russian shareholders for Dudley to resign and the Russian co-owners have said they would seek other legal means to limit BP’s influence on the company.

Mounting state pressure on the firm over recent months, including back tax claims, office raids and the arrest of an employee on espionage charges, are signs that the Kremlin is putting pressure on either BP or the Russian billionaires to sell out to a state-controlled company, analysts say.

(Writing by Amie Ferris-Rotman; Editing by David Holmes and Braden Reddall) ($1=23.59 Rouble)

 

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