Mechel ADRs drop 33% on NYSE after Putin criticism-2

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The American Depository Receipts (ADRs) of Russian metals company Mechel fell 33% on the New York stock exchange on Thursday after criticism by the Russian premier of the company's sales policies and its owner's activities.
(Updates, adds details in paras 9-12)

MOSCOW, July 24 (RIA Novosti) - The American Depository Receipts (ADRs) of Russian metals company Mechel fell 33% on the New York stock exchange on Thursday after criticism by the Russian premier of the company's sales policies and its owner's activities.

At a conference on metallurgy in the Volga area city of Nizhny Novgorod, Prime Minister Vladimir Putin asked the Federal Antimonopoly Service (FAS) and the country's top prosecutors to pay special attention to the company, which sold commodities abroad at prices twice as low as domestic and global ones in the first quarter of 2008.

"We should find out what is happening there," Putin said.

Mechel CEO Igor Zyuzin was unable to attend the conference due to illness.

A medical source in Moscow was quoted as saying that Zyuzin was admitted to a Moscow cardiology clinic on Wednesday.

"Zyuzin was admitted with heart problems and is undergoing treatment in a Moscow Medical Academy clinic," the source said.

Mechel has several metal plants in Russia, Romania and Lithuania. It unites producers of coal, ore, nickel, steel, and highly-processed steel products for the domestic and foreign markets.

In 2007, the company's output totaled 21.2 mln metric tons of coal and 5.1 mln tons of rolled products.

The company's ADRs continue to plummet.

The FAS, Russia's antimonopoly regulator, has already launched an investigation into the company.

The stock of other Russian ferrous metals producers also fell following the news. The GDRs of Evraz went down 4.2%, Severstal shares declined 6%, Novolipetsk Steel lost 6.9%, and MMK shares dropped 5.7% on the London Stock Exchange, where a lot of Russian metals are listed.

According to the latest reports, a criminal investigation has been launched over violations of mineral law exposed at a Mechel subsidiary - the Southern Kuzbass coal company in west Siberia - Oleg Mitvol, deputy head of Rosprirodnadzor, Russia's environmental regulator, said.

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