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Vimpelcom Tops Governance Index

Mobile phone giant Vimpelcom practices the best corporate governance polices of any company in Russia while oil producer Surgutneftegaz has some of the worst, according to a new rating index.

The index of 25 blue-chip companies was compiled by the Institute of Corporate Law and Governance, which is headed by former Federal Securities Commission chief Dmitry Vasilyev.

Vimpelcom, which topped the list with a rating of 82.12 out of 100, was followed by the GUM Trading House with 71.51 and power supplier Irkutskenergo with 68.37. At the bottom - in the "zone of high risk" category - was the Gorky car plant with 44.60, Norilsk Nickel with 44.20 and oil producer Surgutneftegaz with 43.81.

The institute, which unveiled the ratings Sunday, said dozens of companies will be added to the index in the upcoming months.

The ratings are based on public information about the companies and the opinions of independent analysts, Vasilyev said. Criteria used in determining the ratings included access to information, authorized capital, corporate governance policies, rights of shareholders, risk and corporate environment.

In its attempts to receive information, the institute "imitates the behavior of shareholders," said Vasilyev.

Publicly available information alone allowed the institute to come to the conclusion that the charters of three-fourths of the companies rated treated shareholders unfairly and several blatantly violated the law, he said.

Vasilyev did not elaborate.

He added, though, that prominent investors such as George Soros and the European Bank for Reconstruction and Development have expressed interest in his ratings project, which is being financed by private investors.

Dozens of companies will be added to the index over the upcoming months.

The index comes at a time when corporate governance is a buzzword in the Russian business community.

"People have started to understand corporate governance is one of companies' main problems," said Steven Dashevsky, an oil analyst with the Aton brokerage.

Federal Securities Commission head Igor Kostikov has identified the development of a corporate governance code as one of the priorities of the stock market watchdog.

And in a bid to put a decade of accusations of violations behind them, many companies are loudly proclaiming the adoption of Western-style corporate governance policies that don't leave the small investor holding the hat.

The Standard & Poor's rating agency is currently working on a corporate governance project of its own.

To be rated, companies pay the agency for its services and provide direct access to their financial statements and other information that is not open to the public. Each company then decides if the findings may be published.

Standard & Poor's announced late last year that it had rated five companies, but only three of them agreed to let the findings be made public.

Yulia Kochetygova, coordinator of the project, said the agency has completed studies of two more companies and is awaiting permission to reveal the results.