Russian gas giant Gazprom has decided to keep PricewaterhouseCoopers (PwC) as its auditor this year, despite lawsuits launched against the accounting firm by minority shareholders.

The firm's board of directors decided to ask shareholders to vote in PwC's favour at the firm's annual meeting in June - effectively guaranteeing approval of the decision.

The decision is a severe blow to William Browder, chief executive of Moscow-based Hermitage Capital Management Fund, which has filed two separate cases against the accounting firm.

Mr Browder accused PwC of presenting audit reports that contradicted the facts, especially with regard to Gazprom's ties with other companies.

According to him, PwC, which audits some of the biggest firms in Russia, overlooked Gazprom's faults in order to keep its business.

Getting better?

Gazprom is the world's biggest gas company, with sales of $20bn in 2001 and with reserves six times the size of Exxon Mobil.

Mr Browder says he wants to change auditing practice in Russia

But its accounting practices have repeatedly come in for criticism from investors, who allege that it is at best opaque and uncommunicative.

Last May, the government appointed Alexey Miller, a liberal economist and ally of President Vladimir Putin, to the post of chief executive.

Mr Miller has headed efforts to clean up Gazprom's murky books and banish remnants of the old management

Murky relations

The cornerstone of the complaints is Gazprom's murky relations with Itera, a Moscow-based but Florida-registered energy company, which allegedly was used by the gas giant as a front company for the improper transfer of assets.

Gazprom has denied the allegations, and PwC argued that it had simply been using the information presented by its client.

A Moscow court has already dismissed one of Mr Browder's claims and adjourned the second one.

Room for improvement

According to Boris Fedorov, Gazprom's independent director and a tireless critic of the old regime at the firm, the situation in the company has improved significantly.

Mr Fedorow is happy about the firm's progress

"There were some questions earlier, when some relatives of management were participating in dubious deals and it was not mentioned," he told BBC News Online.

"But in the last audit all the related parties were named and the quality of the audit itself has improved last year."

But Mr Browder is apparently not persuaded.

"We want to show auditors that there are rules and laws in Russia, and those who choose to violate them will face serious consequences," he says.