Corporate Behavior Rank Company Score Change 1 Vimpelcom 84.12 -0.42 2 Norilsk Nickel 65.57 +0.21 3 UES 65.15 -1.04 4 Lenenergo 64.95 +6.81 4 N.W. Telecom 62.95 -0.41 6 Sibneft 62.47 -1.04 7 Yukos 62.27 -2.06 8 Rostelecom 60.41 0 9 Kuzbassenergo 59.59 0 10 Gazprom 59.18 0.42 11 Aeroflot 58.97 0.83 12 Samaraenergo 56.08 0.82 13 Irkutskenergo 55.05 1.03 14 MGTS 54.64 3.09 15 LUKoil 54.43 -6.19 16 Bashkirenergo 54.23 -1.23 17 TNK 54.23 4.75 18 Slavneft 52.78 -3.71 19 Surgutneftegaz 52.37 -0.21 20 Severstal 50.72 0 21 Tatneft 46.19 -0.61 22 GAZ 45.36 0.41 23 AvtoVAZ 44.95 2.27 24 VolgaTelecom 44.74 0 25 Rosneft 33.20 0.21 Source: ICGL

There were no major corporate faux pas in the last three months of 2002, but 10 of the 25 companies evaluated quarterly by the Institute of Corporate Governance and Law saw their scores drop, the ICGL said Monday.

However, 11 of the companies rated by the corporate watchdog saw their scores rise. They were led by St. Petersburg utility Lenenergo, which gained nearly seven points to finish in a tie for fourth overall with Northwest Telecom at 64.95 out of a possible 100 points.

The ICGL owns small stakes in all 25 of the companies and scores them based on transparency, capital structure, shareholder rights, governance history, management, executive bodies and corporate risk.

The nation's second-largest mobile operator, Vimpelcom, lost about a half a point but still retained the top spot overall with a score of 84.12, while Rosneft, the last completely state-owned oil major, remained on the bottom with a score of 33.2, up just a fifth of a point.

Two other oil companies -- LUKoil and recently privatized Slavneft -- were the biggest point losers, falling more than six points and nearly four points to rank 15th and 18th, respectively.

An ICGL spokeswoman said LUKoil's downgrade was mainly due to one thing -- the company's failure to provide any of the information requested by the ICGL as a normal shareholder.

"That was enough of a reason to cut the company's score," she said.

A LUKoil spokesman said there must have been some misunderstanding since his company "always" answers questions from investors.

Analysts said they could not think of a legitimate reason to consider LUKoil's corporate behavior worse in the last three months of 2002 than in the prior three months.

"To our knowledge, Mark Mobius, who was appointed an independent director of LUKoil last year, has been quite active at his post," said Yulia Kochetygova, director of corporate governance services at the Moscow office of international ratings agency Standard & Poor's.

As for Slavneft, the ICGL downgraded it because of the high degree of uncertainty over its future development. TNK and Sibneft jointly won a tender for 75 percent of the company last year but have yet to decide how to divvy up the company.

"As far as new owners have not yet made their plans public, this creates additional risks for minority shareholders," the ICGL said in its report.

However, Kochetygova said Slavneft has always been a risky company from the point of view of investors.

"I don't think privatization itself will change anything," she said.

On the opposite end of the spectrum is Lenenergo, TNK and Moscow fixed-line telephone monopoly MGTS, all of which were praised by the ICGL for full and timely disclosure of requested information.

All in all, the ICGL said 2002 was a banner year for metals giant Norilsk Nickel, state long-distance provider Rostelecom, flagship airline Aeroflot, oil major Surgutneftegaz and automaker GAZ.

But developments at steel company Severstal, regional utility Kuzbassenergo and national power monopoly Unified Energy Systems have been less than impressive, the ICGL said in its report.

Troika Dialog corporate governance analyst Yelena Krasnitskaya said Norilsk Nickel has been one of the most active companies in terms of improving corporate governance over the last six months.

"The company is doing a lot in this direction and I think it will remain one of the leaders this year too," Krasnitskaya said.

One reason for Norilsk's apparently improving behavior could be that its main beneficial shareholder, Interros chief Vladimir Potanin, has been appointed chairman of the recently created National Council on Corporate Governance.

"I think that the creation of the council shows that Russian business has finally understood the importance of building relations with outside investors," Krasnitskaya said.