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Russian PM says past privatisations irreversible
By Darya Karsunskaya

MOSCOW, July 17 (Reuters) - Russian Prime Minister Mikhail Kasyanov on Thursday told his cabinet that the country's privatisation process could not be reversed, in an attempt to soothe a growing row between the Kremlin and top industrialists.

"Today, we see the clear advantages of private enterprise and private ownership," Kasyanov told ministers.

"Of course, we believe and have always believed that the results of previous years' privatisations are irreversible. Our main current and past aim is clearly to improve the quality and transparency of decision-making in privatisations."

Russia's business community has been jolted by the launching of an investigation directed against oil major YUKOS <YUKO.RTS>.

One of its key shareholders is in detention on charges of theft of state property in connection with a 1994 privatisation. That has raised questions that the Kremlin would revisit the results of the 1990s selloff of state property, which enabled a handful of magnates to acquire colossal fortunes overnight.

Both President Vladimir Putin and Kasyanov have described as excessive the use of detention in dealing with investigation into economic crimes.

YUKOS stock sank more than seven percent on Wednesday on news that authorities had ordered new tax checks into the company. The country's stock markets have generally taken a battering over the row, and YUKOS's chief executive Mikhail Khodorkovsky predicted foreign investors would stay clear of Russia unless the issue was settled.

The head of Russia's main grouping of industrialists, Arkady Volsky, presented Putin last week with a letter outlining the concerns of business. He met the president again on Wednesday and told the daily Gazeta that he believed tensions were easing.

"I think that the first step has been taken to completely smooth the tension between the law-enforcement bodies and the country's biggest companies.

"We need energy and patience and a willingness from all sides to find an appropriate way out of this complex situation. The situation is not only about individuals and organisations, but about the general rules of the game -- which must be confirmed to provide an outcome from this whole process."

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