Putin steps up battle against the oligarchs

The Kremlin's crackdown on Russia's leading business tycoons intensified yesterday, when a criminal tax-evasion case was launched against its largest car manufacturer, Avtovaz.

Announcing the latest in a stream of criminal investigations against the country's business elite, the head of Russia's tax police declared that the car-manufacturing giant - which is reportedly associated with the country's most influential tycoon, Boris Berezovsky - had "concealed huge sums" from the state.

In televised interviews, which appeared designed to spread unease throughout Moscow's corporate elite, senior tax officials warned that a criminal investigation against another massive Russian business would be launched today.

The Russian president, Vladimir Putin, also hinted that the country's oligarchs - the small group of businessmen who used their political contacts to amass vast fortunes when Soviet state monopolies were privatised in the early 1990s - were in for a difficult time.

This unexpected wave of high-level, anti-oligarch activity began on Tuesday when another tax-evasion case was opened against the chairman of Lukoil, Vagit Alekperov.

Lukoil, Russia's largest oil company, denied the charges, with officials pointing out that it had received last year's "honest tax-payer of the year" award.

At the same time, Vladimir Potanin, who heads the group controlling one of the world's largest nickel producers, Norilsk Nickel, came under separate attack. He was asked by the state prosecutors' office to make a voluntary payment of $140m (£92m) to the government in compensation for the amount it claims he underpaid for a large stake in Norilsk when it was privatised in the mid-1990s.

Meanwhile, criminal action against the press baron, Vladimir Gusinsky - the head of the independent media company, MediaMost - was stepped up, with new searches of its headquarters in Moscow by officials from the FSB, the successor to the KGB. Prosecutors this week widened their investigation to include the links between Mr Gusinsky's company and the natural gas monopoly, Gazprom, from whose head offices documents were also seized on Tuesday.

In his pre-election campaigning, Mr Putin courted popular approval by promising to act against the widely despised oligarchs, pledging that, under his rule, they would "cease to exist as a class". However, until this week, he had moved only against Mr Gusinsky, whose media holdings have been conspicuously critical of the Kremlin since Mr Putin's arrival in power last summer.

The move against Avtovaz was particularly unexpected, given its links with Mr Berezovsky, who was hugely influential in orchestrating Mr Putin's rapid rise to power.

There was speculation last night that the case was simply a flexing of muscles - an attempt by Mr Putin to see how much independence he is able to leverage from the powerful business figures who wielded so much influence over his predecessor Boris Yeltsin.

"Putin needs to show that he is in charge. These moves are more political than criminal," said Yevgeny Volk, a political analyst with the Heritage Foundation.

Within the Byzantine world of backroom Kremlin politics, ambiguity remained last night about whether the prosecutions were merely a display of strength for public consumption or whether Mr Putin truly intends to pursue this campaign to its conclusion.