Kasyanov (right): 'Privatisation has advantages'

Russian business has been rocked by a judicial investigation into the 1994 privatisation of a fertiliser company and a probe into the tax position of oil giant Yukos.

One of Yukos's key shareholders, Platon Lebedev, has been charged with theft of state property in connection with the fertiliser privatisation and is being held in custody.

The investigation has raised fears that the Kremlin will re-examine the results of the 1990s sell-off of state property that made a handful of tycoons - the so-called oligarchs - into billionaires overnight.

'Clear advantages'

But Mr Kasyanov attempted to take the heat out of the row by stressing there was no going back to state ownership.

He told a cabinet meeting the sell-off of state-owned assets may have been imperfect but provided many advantages.

He said state-run companies often blocked competition in the marketplace, the Interfax news agency reports.

"Today, we see the clear advantages of private enterprise and private ownership," Mr Kasyanov told ministers.

"Of course, we believe and have always believed that the results of previous years' privatisations are irreversible.

"Our main current and past aim is clearly to improve the quality and transparency of decision-making in privatisations."

Political campaign

The Russian authorities are investigating tax evasion at Yukos and rival firm Sibneft, which are due to merge to create the world's fourth-ranked producer.

Yukos chief executive Mikhail Khodorkovsky, who has a personal fortune estimated at $8bn, has been targeted by prosecutors in what is seen as a politically-driven campaign by Kremlin figures.

The tycoon has been financing opposition parties ahead of December parliamentary elections, in a move analysts say breaks a 2000 agreement between President Vladimir Putin and the nation's billionaire magnates for them to keep out of politics.