MOSCOW, April 25 (RIA Novosti) - Roughly a quarter of defense-industry enterprises seen as important to Russia's national security are currently threatened by bankruptcy, a deputy industry minister said Tuesday.
Deputy Minister of Industry and Energy Andrei Reus told a conference on ways to prevent strategically important businesses from going bankrupt that 242 of Russia's 948 strategic enterprises were undergoing or could face bankruptcy procedures.
"At the moment, bankruptcy procedures have been launched against 44 of them, and another 198 are showing all signs of bankruptcy and may be subject to pre-trial rehabilitation, according to the Federal Tax Service," Reus said.
He said strategic enterprises went bankrupt mainly because their management and structure were at odds with free-market principles, had poor marketing skills, and individual executives were not empowered to make decisions.
Reus said interested bodies should coordinate action during pre-trial rehabilitation, and said bankruptcy procedures should be dropped when debts are cleared. He also said there should be legal regulation to ban strategic enterprises from suspending their operations, and to dismiss arbitration managers who fail to achieve production norms.
"The term for financial recovery and external management has to be increased, because a production cycle at strategic enterprises usually exceeds one or two years," Reus said.
Other reasons for poor performance Reus cited included government debt on defense sector contracts and a lack of funding in mobilized facilities. He also criticized the government's practice of placing defense orders with other companies that profited by exploiting the intellectual and production resources of the strategic enterprises.
