MOSCOW - President Dmitry Medvedev pledged on Thursday to disband Russia's inefficient state corporations, created by his predecessor Vladimir Putin, and called for a probe in to their use of state money.
During Russia's economic boom years under Putin, some state corporations became conglomerates with sway over entire sectors such as defence equipment, strengthening the Kremlin's grip over the economy and hampering competition.
As far as state corporations are concerned, I think they have no prospects in the current environment, Medvedev said in his annual state of the nation address.
Analysts said the attack had probably been agreed with Putin, now Russia's prime minister. Any such move would be aimed at clawing back state money, they said. They also noted the rise of the conglomerates had continued under Medvedev.
Russia has been particularly hard hit by the global economic crisis which has exposed the dire state of many Soviet-style industries, among them carmaker AvtoVAZ.
The loss-making company, 25 percent owned by France's Renault, has repeatedly warned it faces bankruptcy. It has laid off about 7,000 workers and may cut a total 22,000 jobs, or around a quarter of the workforce.
The government, fearful of unrest in AvtoVAZ's home town of Togliatti, has pledged billions of dollars in bailout money and called on Renault to raise its stake to 50 percent.
State corporations under scrutiny include bank VEB, whose supervisory board is chaired by Putin, and Russian Technologies, which is headed by a close Putin ally, Sergei Chemezov.
The Kremlin's top economic aide Arkady Dvorkovich told reporters after Medvedev's speech that VEB and Russian Technologies could be turned into joint stock companies as early as 2010.
Corporations that work under regulations suited to temporary work should, on completing their activities, be disbanded, said Medvedev.
Those which work on commercial, competitive terms should become modern, open joint-stock companies controlled by the state. In the future, they shouldn't be held in the public sector and should be opened to private investors.
Russia wants to raise $2.4 billion from privatisations in 2010 and officials have said more state firms will be sold. The government aims to cut state involvement in the economy to 30-40 percent from 50 percent now.
VEB disburses billions of dollars in state anti-crisis money. Russian Technologies controls state arms exporter Rosoboronexport, the world's biggest titanium producer VSMPO-Avisma and a quarter of AvtoVAZ. Independent audits are required for these corporations, and also large companies with state participation, Medvedev said.
Prosecutors have been probing some corporations since August and Russian media speculated some state-appointed bosses could lose their jobs after falling out of favour with Putin and Medvedev.
In the future some assets could be transferred to private investors, Dvorkovich said. He said the government was still talking to Renault and Canada's Magna about the future of the Russian auto industry.
Other Russian state corporations include Rosatom, which controls the nuclear sector, Olympstroi, which is developing the city of Sochi for the 2014 Olympics, and Rosnano, which is tasked with developing nanotechnology.
(Writing by Dmitry Zhdannikov, editing by Janet McBride; Moscow Newsroom, + 7 495 775 12 42)