Russian government still wants new Rostelecom management

Wed Feb 27, 2013 4:53am EST

* Deputy PM says replacement being discussed

* Follows criticism from government, searches of CEO home

* Previous attempt to replace CEO failed

* CEO Provotorov had admitted pressure to go

MOSCOW, Feb 27 (Reuters) - The Russian government still wants a management shakeup at state-controlled telecoms group Rostelecom, after it failed to agree on a new CEO with the Kremlin last year, Russian news agencies reported.

"This question has not been closed, it is actually open," Arkady Dvorkovich, the first deputy prime minister who oversees the telecoms sector in the government, was quoted by RIA and Interfax as saying on Wednesday.

"We are not talking about returning to this question - it is open and being discussed."

Speculation that CEO Alexander Provotorov may be replaced emerged after a cabinet reshuffle last May and has been fuelled by government criticism of the firm's investment strategy and weak share price.

Rumours flared anew in November when investigators searched the homes of Provotorov and Konstantin Malofeyev, a 10.5 percent shareholder and Provotorov's former business partner, in a probe unrelated to Rostelecom.

In an interview with Reuters this month, Provotorov admitted pressure, while defending Rostelecom's ambitions in the mobile sector that were also subject to criticism.

Newspapers earlier reported that the communications ministry under newly appointed Nikolai Nikiforov had suggested replacing Provotorov with Vadim Semyonov, the head of state holding company Svyazinvest who studied law with Prime Minister Dmitry Medvedev, but his candidacy was rejected by the Kremlin.

Provotorov took the helm at Rostelecom in July 2010 when the communications ministry was headed by Igor Shchyogolev - now in the Kremlin as an aide to President Vladimir Putin. Last April Provotorov's contract was extended until mid-July 2015.

Rostelecom's stock was trading 1.24 percent lower at 116 roubles by 0946 GMT, slightly underperforming broader market index and taking the shares around 20 percent below a year-ago price. (Reporting by Maria Kiselyova; Editing by Douglas Busvine and Helen Massy-Beresford)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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