#4 - JRL 7258
Russian minister worries over YUKOS impact -report
MOSCOW, July 21 (Reuters) - A top Russian minister called for a quick resolution of investigations into blue-chip oil firm YUKOS <YUKO.RTS>, saying they could threaten the country's fragile economy, Profile magazine reported on Monday.
Concerns over a prosecutors' probe into the role of a YUKOS shareholder role in the sell-off of a fertiliser company in the 1990s and tax checks at YUKOS itself sent Russian share prices sharply lower last week.
"I hope the situation around YUKOS is temporary," Profile quoted Economic Development and Trade Minister German Gref as saying.
"In order for the market to calm down...the situation has to be resolved as quickly as possible. Otherwise companies that had no relationship to privatisation will suffer."
The investigations have triggered concerns -- denied by the government -- that controversial privatisations of the 1990s which created many of Russia's most powerful companies could be overturned.
And economists also fear capital flight could begin again just as the billions that left Russia in recent years have started to come home.
Gref, a leading market reformer in the Cabinet and former privatisation official himself, said in the interview that neither President Vladimir Putin nor the government would allow privatisations to be overturned.
"If foreign and domestic investors decide that the results of privatisation are at issue, the damage will be huge," he said.
YUKOS chief Mikhail Khodorkovsky, Russia's richest man and
thought to have political ambitions of his own, has said the probes were initiated inside the Kremlin.
YUKOS shares, down 20 percent since the conflict broke out, lost another 2.6 percent on Monday to trade at $10.87 by 1025 GMT with other blue chips flat or rising.
The issue shows no signs of abating and on Monday YUKOS took a swipe of state prosecutors, accusing them of trying to smear the company.
"The Prosecutor General's office is attempting to replace an absence of any evidence in the criminal cases...with hatchet-job propaganda," YUKOS said in a statment on its web site (www.yukos.ru).
"As a result the public finds out about these criminal investigations before they go through the bureaucratic procedures."
YUKOS said the fertiliser privatisation and tax probes would fall apart before they reached the courts.