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#9 - JRL 7217
Financial Times (UK)
June 10, 2003
Deaths challenge Putin's reforms
By Andrew Jack in Moscow

Russian investigators on Monday confirmed they were studying links between contract killings of two of the country's senior defence industry executives at the end of last week.

The deaths have raised concerns about challenges to plans by Vladimir Putin, president, to reform the sector.

Police were examining connections between the shooting of Igor Klimov on Friday morning in the centre of the Russian capital, and that of Sergei Shchitko in the Moscow suburb of Serpukhov late the same night, the Serpukhov prosecutor's office said.

Mr Klimov, acting general director of Almaz-Antei, was gunned down days ahead of a shareholder meeting at which he was likely to be confirmed as head of the combined group. Mr Shchitko was commercial director of one of the company's subsidiaries.

The killings come after a wave of assassinations of corporate and political figures. They are particularly significant because Mr Klimov had a background in the Russian special services and used to work in the Kremlin with Viktor Ivanov, a close colleague of Mr Putin.

Maxim Pyadushkin, deputy director of CAST, a defence sector think-tank, said on Monday: "This is a big blow to Putin's image, and a clear sign that in Russia there are some circles that do not worry about him and are not afraid of his new elite."

He said the assassinations risked destabilising Mr Putin's plans to restructure the defence sector, of which Almaz-Antei was set to be the first significant consolidation.

Mr Pyadushkin said the Almaz-Antei group of companies was responsible for Russia's missile defence systems, including missile launchers and the advanced S300 radar system, which accounted for about 15 per cent of the country's $5bn in arms export sales last year.

Mr Putin has placed strong emphasis on restructuring Russia's defence sector as part of broader plans to reform the country's military, reassert its strength and help improve earnings from a value-added sector with considerable export potential.

In another high profile killing late last month, a St Petersburg criminal boss called Kostya "the Grave", was shot dead in Moscow. The crime was interpreted as a struggle between rival gangs for influence in the northern city.

It comes at a time of political uncertainty triggered by the planned resignation of Vladimir Yakovlev, mayor of the city, who is a long-standing political rival of Mr Putin.

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