UPDATE 1-Russia Deputy PM to meet Rostelecom amid shakeup report

Fri Dec 7, 2012 8:02am EST

* Reports suggest managerial reshuffle at Rostelecom

* Rostelecom CEO home searched in November (Adds date of meeting, source, details)

MOSCOW Dec 7 (Reuters) - Russia's deputy prime minister will meet the board of Rostelecom next week amid reports he may suggest replacing the management of the state-controlled telecoms operator after the house of its CEO was searched in a fraud probe.

Aliya Samigullina, spokeswoman for the deputy PM Arkady Dvorkovich, told Reuters on Friday he plans to meet Rostelecom's board to discuss the reorganisation of Rostelecom and its state-controlled shareholder Svyazinvest.

She declined further comment.

A source close to Rostelecom's shareholders said the meeting would take place on Dec. 12, with the company's budget and plans for 2013 known to be on the agenda.

"I admit that (the management reshuffle) may be discussed but I see no legal grounds for it," the source said.

Russia's Vedomosti newspaper cited two sources as saying Dvorkovich might touch on the idea of replacing the company's management.

Russia's government owns a 53.2 percent stake in former fixed-line monopoly Rostelecom, which was transformed last year into a multi-service provider by merging with Svyazinvest's regional operators.

Russian investigators in November searched the home of Alexander Provotorov, chief executive of Rostelecom, and the home of a minority shareholder, Konstantin Malofeyev in a probe unrelated to Rostelecom.

The investigation is linked to a $225 million loan by VTB to finance a business deal in 2007 in which, investigators suspect, Malofeyev was involved on both sides of the transaction. It follows a slew of scandals that has soured the mood of investors towards Russia.

Newspapers reported in October that Provotorov, who took the helm at Rostelecom in July 2010, could be replaced by Vadim Semyonov, the head of state telecoms holding company Svyazinvest who studied law with Prime Minister Dmitry Medvedev.

Rostelecom declined comment. (Reporting by Dasha Korsunskaya and Anastasia Teterevleva; Additional reporting by Maria Kiselyova and Katya Golubkova; Editing by Mark Potter and Hans-Juergen Peters)

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