* Putin closely associated with investment forum
* Western firms see impact of Ukraine crisis on business
* Russia heading into recession, growth seen falling
(Adds companies, economic data, markets, quotes)
By Katya Golubkova and Timothy Heritage
MOSCOW, May 7 Western investors from a bank to a
brewer reported trouble in their Russian operations on Wednesday
due to the Ukraine crisis, while the Kremlin suggested
Washington was trying to sabotage President Vladimir Putin's
flagship economic forum.
French Bank Societe Generale wrote down the value
of its Russian subsidiary, Danish brewer Carlsberg
blamed the rouble's weakness for lower profits, and Britain's
Imperial Tobacco Plc said conditions in Russia had hurt
its overall business in growth markets.
So far Western sanctions over Russia's annexation of Crimea
from Ukraine in March have mainly targeted only individuals
close to Putin and steered clear of trying to inflict serious
damage on the economy.
Russian shares and the rouble surged on Wednesday after
Putin called for separatists in eastern Ukraine to postpone a
planned referendum on secession and backed diplomatic efforts to
resolve the crisis.
However, capital is flooding out of Russia just as it most
needs foreign investment to support a faltering economy, and
analysts forecast the rouble will fall to new lows against the
dollar in the coming year.
Putin's press secretary Dmitry Peskov said top U.S.
executives were coming under pressure to stay away from the St
Petersburg International Economic Forum later this month, at
which the president is due to deliver the keynote address.
The annual investment gathering, Russia's answer to the
Davos World Economic Forum, usually attracts an A list of global
company bosses but the White House has said it would be
inappropriate for heads of big U.S. firms to attend this year.
Chief executives conspicuous by their absence from the May
22-24 event include the heads of aluminium producer Alcoa Inc
, energy firm ConocoPhillips, Citibank,
General Electric and International Paper.
"As we know, many U.S. companies have faced direct
unprecedented pressure... They are deciding whether to go or not
to go to the forum but not on their own," Peskov told RIA news
agency, adding that Putin had not altered his agenda for the
The Forum aims to showcase Russia as a place to invest but
has not always succeeded in persuading executives worried by red
tape, corruption and poor legal protection. The battle will be
particularly hard this year with the economy sinking into
recession and hit by the U.S. and European Union sanctions.
Highlighting the problems of investing in Russia, and citing
uncertainty over Ukraine, Societe Generale said it had booked a
525 million euro ($731 million) writedown on the value of its
Russian unit, Rosbank.
Carlsberg reported a fall in first-quarter operating profit
because of the rouble's weakness and poor sales in eastern
Imperial Tobacco said in a report for the six months to
March 31 that its "overall share position in growth markets was
slightly down, impacted by conditions in Russia". Cigarette
companies are relying on growth markets, largely in developing
countries, to offset dwindling sales in the developed world.
Analysts said conditions are deteriorating. "The outlook for
sales and earnings in Russia and Ukraine for the rest of the
year and in 2015 is worsened every day that goes by without the
crisis getting solved," Morten Imsgard from Sydbank said.
MESSAGE TO PUTIN
Russia annexed Crimea after the ousting of pro-Moscow
Ukrainian president Viktor Yanukovich in February, and since
then the separatists have taken over several towns and cities in
the largely Russian-speaking east of the country.
Western governments accuse Moscow of being behind the
separatist moves in eastern Ukraine but Russia denies this.
Although the White House says it has not forced businessman
to boycott the forum, President Barack Obama is sending the
message that it cannot be business as usual with Russia.
White House spokesman Jay Carney said officials had been
discussing the forum with business leaders, and had made clear
that attending would not be appropriate given "flagrant
violations of a sovereign nation's territorial integrity".
Some Russian companies and individuals have faced sanctions
over the events in Ukraine, such as asset freezes and visa bans,
including some of Putin's inner circle but not Putin himself.
The U.S. pressure over the forum, however, indirectly hits
Putin himself. His face features on the forum's website, the
event is closely associated with him personally and each year
the president uses it to make a rallying cry for investment.
Russia, the world's top oil producer, needs foreign
investment and know-how for the energy sector, where advanced
drilling technology is needed to unlock Arctic and shale oil
GROWTH FORECASTS DOWN
The International Monetary Fund last week forecast 0.2
percent growth this year and said the economy was already
"experiencing recession". Russia's credit rating was cut by
Standard and Poor's last month to one notch above junk status.
The rouble is down nearly 8 percent against the dollar this
year and capital flight, nearly $64 billion in the first
quarter, is expected by the IMF to hit $100 billion by year-end.
Moscow has not given up on the forum but the guest list
could shrink even further.
International Paper CEO John Faraci does not plan to
attend, although the company plans to send other executives, a
source close to the company said.
Kommersant daily newspaper said the chief executives of
Goldman Sachs, Morgan Stanley, Visa and
PepsiCo also may not attend.
U.S. energy giant ExxonMobil, a major partner for
Rosneft, declined comment. BP, which holds an almost 20
percent stake in Rosneft, also declined to comment on the plans
of chief executive Bob Dudley, a regular guest at the forum.
Reflecting doubts over the investment climate, Royal Dutch
Shell, a shareholder in Russia's sole liquefied natural
gas plant feeding Asian markets, has said it is unlikely to be
"jumping into new investments" in the short term.
Telenor CEO Jon Fredrik Baksaas, a shareholder with Russia's
No.3 mobile phone operator Vimpelcom, told Reuters many
people were waiting to see how the presidential election in
Ukraine goes on May 25.
"I think if you started from scratch, it would be hard to
see a Western company like Telenor doing a significant
investment in Russia right now," he said.
The chief executives of Telenor, Shell and Norway's Statoil
CEOs were still on the participants list as of May 6.
The heads of BP and France Total are also still there.
(Additional reporting by Megan Davies, Jason Bush and Alexander
Winning in Moscow, Ernest Scheyder in New York, Anna Driver in
Houston, Balazs Koranyi in Oslo, editing by Nigel Stephenson and