Manual\' Diamond Trade has resulted in ALROSA President Dismissal

By Alexey Chertkov

 A decision of ALROSA’s Supervisory Board as of July 10 on Fyodor Andreyev’s appointment as ALROSA’s President starting July 15 became a great event in the global diamond business. Remarkable is not only that Sergey Vybornov, whose positions were not exposed to public criticism for a long time, was fired, but the way such an important decision was accepted - the main figure in the diamond company was changed in the form of absentee vote (emphasis added - Alexey Chertkov).
 This fact speaks volumes to experts sophisticated in administration intrigues. I think it will also give food for reflection to the company’s foreign partners, who started to conclude long-term trade contracts with the company.
 It is noteworthy that each new president of the company feel it his duty to "put things in order" in the marketing policy. Contractual conditions were developed, additional criteria for client selection were defined, but the work began to flow in a new fashion with each new president.
 ALROSA’s shareholders change the diamond company’s President once in every two years. Is not it too frequent?
 Each participant of the diamond market can give his answer and weighty arguments to this question. Non-transparency of the company’s information policy only gives food for thought and idle speculation. For example, Vybornov held no (emphasis added - Alexey Chertkov) public press conference in his residence. It is unlikely that he was taught this at the Moscow State University of Foreign Affaires where he studied the economic diplomacy.
 Chronicle of ALROSA presidency (2002-2009):
Vladimir Kalitin, born in 1947 (the Amur region), a mining engineer - from March 1 till December 16, 2004;
Alexander Nichiporuk, born in 1957 (Moscow), a financier - from December 16 till February 9, 2007;
Sergey Vybornov, born in 1958 (Moscow), international relations - from February 9 till July 13, 2009;
Fyodor Andreyev, born in 1966 (Voronezh), an economist, a financier - since July 15, 2009.
 It strikes the eye that the new president of ALROSA is the youngest among his predecessors and the fact that he was in the presidential managers reserve for the new Russia.
Note for information:
Fyodor Borisovich Andreyev was born on August 16, 1966, in Voronezh.
He graduated in 1989 from the Leningrad State University, where he was an economics major.
1989-1991 –worked as an economist, lead economist of the finance and credit department at the commercial bank Tver.
1991-1992 – lead expert, chief specialist of the department of marketing and development at the Tver commercial and industrial society Tvercommertsia LTD.
1992-1996 - economist of the fund department, senior economist of the department of securities, chief of the liabilities management department, director of St. Petersburg branch Tveruniversalbank.
1997-1999 - vice-chairman of the Board of OAO (KB) BaltoneksimBank.
1999-2001 - chairman of Board of the Open Company (KB) BaltoneksimBank.
2002-2003 – first vice-president of ALROSA.
2003-2005 - vice-president of RZD (OAO Russian Railways).
Since 2005 - senior vice-president of RZD, he was responsible for the company’s economic and financial policy.
 As a matter of fact, Vybornov’s resignation shows that the company’s principle shareholders unanimously admitted that activities of the former company’s executives accompanied by a restriction of rough diamond sales on the world market are not capable to help diamond producers overcome the crisis.
 Rumours about bad chances for Vybornov to hold the chair arose after the shareholders of ALROSA had not supported his candidature to be included in the Supervisory Board. For the first time in 17 years of ALROSA’s existence its president was not included into the strategic council of the company’s executives.
 ALROSA’s Supervisory Board:
Alekseyev Gennady Fedorovich - first vice-chairman of the Government of the Sakha Republic (Yakutia);
Andreyev Fyodor Borisovich – senior vice-president of RZD (a professional attorney);
Akhpolov Alexander Alikhanovich –director of the Administrative Department at the Finance Ministry of the Russian Federation;
Borisov Egor Afanasyevich –chairman of the Government of the Sakha Republic (Yakutia);
Demyanov Ivan Kirillovich – vice-president of AK ALROSA;
Dubinin Sergey Konstantinovich – member of the Board of Directors of ZAO VTB Capital (a professional attorney);
Yefimov Victor Petrovich – minister of property relations in the Sakha Republic (Yakutia);
Kudrin Alexey Leonidovich –vice-president of the RF Government, Minister of Finance of the Russian Federation;
Nikolayev Isen Sergeyevich – head of the Presidential Administration and the Government of the Sakha Republic (Yakutia);
Rybkin Vladimir Borisovich – head of the Gokhran of Russia;
Sultanov Ildar  Rifovich – head of the municipal entity “Mirninsky District” of the Sakha Rebublic (Yakutia);
Tikhonov Anatoly Vladimirovich – first vice-chairman of the state corporation Bank of Development and Foreign Economic Affaires “Vneshekonombank” (a professional attorney);
Urinson Yakov Moiseyevich – assistant general director of the state corporation Russian Corporation of Nanotechnologies (a professional attorney);
Shtyrov Vyacheslav Anatolyevich -  President of the Sakha Republic (Yakutia);
Yuzhanov Ilya Arturovich - member of the Supervisory Board of ZAO NOMOS-BANK (a professional attorney).
 
Comments on Sergey Vybornov’s resignation:
 “Both federal and local authorities have recently had many claims to the company’s leadership. It resulted in the Yakut authorities, traditionally supporting Sergey Vybornov’s initiatives during two years of his presidency, started talking about a necessity to change ALROSA’s president every two-three years,” a Kommersant source in a governmental body of the Russian Federation said.
 However, Michael Brooker, a former employee of De Beers, whom Vybornov attracted for the development of the company’s marketing strategy amid the crisis, caused the most part of ALROSA shareholders’ copmlaints.
 "The collapse of the company's sales policy became the main reason for the resignation," Kommersant quoted an unnamed source on the ALROSA supervisory board.
 “Last year, ALROSA did not have any marketing strategy at all, only talks unsupported with real steps and the market condition. It is enough to analyze the results of De Beers’ latest sight, which sold diamonds worth 0-450 million — a normal volume for a summer period even in pre-crisis times. As to ALROSA, from the beginning of the year it has sold nothing in the market, offering to its participants rough diamonds for prices some 20 percent above current market prices,” vice-president of the Russian Diamond Manufacturers Association Ararat Evoyan said.
Accounting Chamber: “ALROSA Worked Badly”
As far back as on the 1st of April, Russia’s Accounting Chamber sent to the Finance Minister and the head of ALROSA’s Supervisory Board Alexey Kudrin a recommendation about resignation of the company’s President Sergey Vybornov,  Mikhail Beskhmelnitsyn, the Accounting Chamber auditor, told the Interfax Agency.
He said that the Accounting Chamber audited the company’s work for 2005-2007 and also for the expired period of 2008. The Accounting Chamber has made a conclusion that ALROSA had worked inefficiently. It was one of the reasons for the department to recommend dismissing Sergey Vybornov of his post as ALROSA’s President, explained Beskhmelnitsyn.
 “The company worked badly, in our opinion. The second reason is that Vybornov interfered with this audit by failing to submit the materials to the inspectors. We think he gave direct instructions not to submit the documents,” the auditor said. “Moreover, he did not comment on the definite claims to the company’s work, having said that the Accounting Chambers’ report is “For Official Use Only.”
This explanation in the higher body of financial control was made in response to the diamond company’s reaction, which followed after Stepashin's statements.

From the Federal Law on the Accounting Chamber of the Russian Federation:
Article 1. The Accounting Chamber of the Russian Federation is a continuing body of state financial control, established by the Federal Assembly and accountable to it.