Local media reported last week that Sergei Matviyenko will become senior vice president for information technology at VTB, the same post he now holds at Bank Sankt-Peterburg.
By appointing the governor's 31-year-old son, VTB is seeking closer ties with City Hall to secure plans to expand in the region and to gain an advantage when bidding to process city budget money, observers said.
Bank Sankt-Peterburg, in which Sergei Matviyenko holds a 7.69 percent stake, confirmed that the job at VTB is all but his. "Negotiations about Sergei Matviyenko moving to Vneshtorgbank are in the final stages," said Alexander Savelyev, head of the board of directors of Bank Sankt-Peterburg, Interfax reported. "[He] will stay on as a co-owner of our bank."
Bank Sankt-Peterburg has handled large volumes of city budget money before former Governor Vladimir Yakovlev was elected in 1996 and after he vacated the governorship last year.
Matviyenko's reported move has drawn charges of nepotism and claims that the governor is making the running of the city a family business.
VTB rejected the charge of favoritism. "We have full contact with City Hall without this," said Alexander Bakhvalov, a VTB spokesman said. "I can't say what [the appointment] is related to, [but] I wouldn't have linked it to that." Bakhvalov said that the final decision is being made by the head office in Moscow.
"It is likely he will take responsibility for the IT sector," Bakhvalov said.
City Hall could not be reached for comment.
"It is unlikely that the merging of the administration and business could be tied up so closely if it was outside the family circle," said Boris Vishnevsky, a Yabloko faction member in the Legislative Assembly.
"I have really big doubts that it would happen if Matviyenko had not been elected governor or did not occupy some significant position in the government," he said.
Sergei Matviyenko started working for the Baltiiskoye financial agency in July 2000, a year after graduating from the St. Petersburg Institute for Service and Economy. He was appointed to head IT at Bank Sankt-Peterburg in February 2001. He became vice president on April 1, 2003, just two weeks after his mother moved to St. Petersburg after being appointed presidential envoy to the Northwest Federal District.
Dmitry Travin, an economist and journalist, said it is in VTB's interest to have close ties with the Matviyenko family because of its plans to take control of Promstroibank, one of the biggest financial institutions in the region.
"It is a common practice for businesses to choose their top staff on the basis of the kind of family ties they have," Travin said.
If VTB eventually gains control of 76 percent of Promstroibank by 2006, the bank could become the biggest financial institution in the region.
The news that Matviyenko's son will work for VTB came less than a month before a tender is to be held to choose a financial institution to service the 20 billion ruble ($700 million) payroll for employees working for state organizations, Delovoi Peterburg daily reported last week. The daily said that the bank that wins the tender could make up to $5 million profit from the deal.
Last month, VTB's supervisory board approved plans for the bank's head office to be shifted from Moscow to St. Petersburg.
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