BELARUS NEWS AND ANALYSIS

DATE:

30/05/2007

Refinery Head Arrested in Belarus

2007 The Associated Press

MINSK, Belarus - Security officers in tightly controlled Belarus have arrested the head of the ex-Soviet republic's main refining and chemical production concern on suspicion of embezzlement, prosecutors said Wednesday.

Belneftekhim chief Alexander Borovsky also faces charges of abuse of authority, said Yegor Livai, a spokesman for the Prosecutor General's Office. He said several other representatives of commercial enterprises had also been detained by the KGB, which confiscated "large sums of money and valuables" from them.

Officials did not reveal details of the accusations against Borovsky.

Belarus is struggling this year with increased prices for Russian natural gas and a drop in revenues from the sale of products refined from Russian oil following a bitter dispute with Moscow over energy trade.

Authoritarian President Alexander Lukashenko and officials in his government have announced plans to create a new state oil company to take charge of the industry and to offer foreign companies stakes in chemical producers that are now controlled by Belneftekhim.

Belneftekhim and its subsidiaries account for 35 percent of Belarus' industrial production and over half its exports, according to the company.

Belarus' oil refineries have suffered from a new duty Russia introduced in January on oil exported to Belarus, amid accusations that Minsk was unfairly garnering billions in revenues by refining cheap Russian oil and selling higher-value products to Europe.

Lukashenko has sought to maintain a largely centrally planned, Soviet-style economy. He recently ordered the creation of a Belarusian Oil Company, which would control the oil industry, an apparent attempt to do away with middlemen companies that buy oil for use and refining in Belarus.

Lukashenko has ruled Belarus since 1994, quashing dissent, closing down opposition media and cracking down on private business. The U.S. and the EU have imposed sanctions on him and on top members of his government.

Source:

http://www.chron.com/disp/story.mpl/ap/fn/4847755.html

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