Medvedev Attacks 'Selfish' Banks

President Dmitry Medvedev on Monday moved to defend struggling producers from private lenders that resist rescheduling payments, saying it was not a time for "corporate selfishness."

Medvedev appeared to be firing a warning shot at the country's largest private lender, Alfa Bank, though he didn't name any companies. The bank, controlled by billionaires Mikhail Fridman and Pyotr Aven, is locked in a legal battle over loans with companies that are part of Basic Element, billionaire Oleg Deripaska's holding vehicle.

"We can't sacrifice the future of entire enterprises and the employment of many thousands of workers to satisfy the ambitions of individual lending institutions," Medvedev said in a meeting with First Deputy Prime Minister Igor Shuvalov at his Gorki residence outside Moscow. "It's time to end corporate selfishness."

A bank must not be able to halt the operations of a company even if it has legitimate complaints, Medvedev said.

Alfa Bank had no comment, a spokeswoman said. A spokesman for a Basic Element company, Glavstroi, said Alfa may be looking to bankrupt the Deripaska-owned company.

Medvedev first raised the need for banks to be more receptive to producers' economic hardships at an economic meeting in Irkutsk late last month. On Monday, he sounded irritated that the message got lost earlier, saying the government should find a way to force bankers into greater compliance.

Banks "must value" the government's efforts that prevented them from collapsing after liquidity began evaporating from the market last fall. Alfa Bank became the first private bank to draw a subordinated loan from state-owned Vneshekonombank in January.

Shuvalov, who is the government's anti-crisis point man, told Medvedev that some banks were "extremely tough" on borrowers and that the government will work with both sides to ensure that loans are paid on mutually acceptable terms.

A spokesman for Shuvalov said he could not immediately say which lenders were giving defaulting corporate clients an excessively hard time.

Several Basic Element companies, including Glavstroi, a construction unit, and Soyuzmetallresurs, a mining operation, have had tough talks — involving legal disputes ?€” with Alfa on loan restructuring in recent months. "We have arrears and are trying to come to a compromise," said Glavstroi spokesman Vitaly Korolyov. "This is perhaps the only lender that has an extremely unconstructive position."

Vladimir Tatarchuk, deputy chairman of Alfa Bank, said last week that the bank regarded Basic Element's conditions for restructuring as unacceptable.

Basic Element has had more fruitful talks on restructuring some loan payments with other banks, including UralSib and the Bank of Moscow, a Basic Element spokesman said, adding that the company's debt to Alfa is less than $1 billion.

During the meeting with Shuvalov, Medvedev also ordered the government to move more quickly to provide state loan guarantees to companies that are listed as strategic by the Cabinet. No guarantees have been provided since the government's decision to offer them in December, a delay that may force some companies to go out of business, Medvedev said.

Shuvalov said there has been more progress in actual lending than in giving guarantees. Three state-controlled banks loaned 2.6 trillion rubles ($75 billion) to the companies on the list, with most coming from Sberbank, Shuvalov said. VEB and VTB each extended about 500 million rubles of that amount, he said.