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    Business leader warns Russian cos. may quit LSE in row with U.K. -1

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    A leading spokesman for Russia's business community warned that the diplomatic row with Britain could force many Russian companies to leave the London Stock Exchange, and that British companies in Russia could face difficulties.

    (Adds details, background in paras 3-10)

    MOSCOW, July 19 (RIA Novosti) - A leading spokesman for Russia's business community warned that the diplomatic row with Britain could force many Russian companies to leave the London Stock Exchange, and that British companies in Russia could face difficulties.

    "If events develop in this key, Britain's trading floors traditionally favored by Russian companies, including state-run companies, would start losing ground, and Continental exchanges will obtain an opportunity to attract Russian companies to their bourses," said the president of Russia's Union of Industrialists and Entrepreneurs, Alexander Shokhin.

    Earlier Thursday Russia announced it would expel four British diplomats and stop issuing visas to officials, in a direct retaliation to Britain's expulsion of Russian diplomats three days ago, in protest against Moscow's refusal to extradite Andrei Lugovoi, who Scotland Yard suspects of murdering former Russian security officer Alexander Litvinenko in London last November.

    Shokhin warned that British companies in Russia may now face difficulties with tax authorities and regulators, and that inspections may become more frequent. "Perhaps, under broadly equal conditions, some companies may fail to win tenders," he said.

    He said that U.K.'s decision to refuse entry visas to Russian officials could be easily applied to the executives of Russia's state-owned enterprises.

    "There is nothing to stop the British from saying that managers of state-owned corporations are also state officials. In addition, many officials who sit on boards of directors will fail to enter the U.K. as their companies' business will require," h said.

    Shokhin warned Russian authorities against mirroring British punitive measures, saying that it could end up in a "political ping-pong, which may mean a chill in Russia-U.K. relations, if not a return to the Cold War times."

    The Board of the Russian Union of Industrialists and Entrepreneurs, which Shokhin chairs, includes most of Russia's richest people - owners and top executives of leading Russian companies, many of which are listed in London and New York.

    On the board are the heads of Evraz, LUKoil (Vagit Alekperov), Troika Dialog, Renova (Viktor Vekselberg), Basic Element (Oleg Deripaska), Sistema (Vladimir Yevtushenkov), IBS, VTB Group (Andrei Kostin), Gazprom (Alexei Miller), Novolipetsk Steel (Vladimir Lisin), Severstal (Alexei Mordashov), Interros (Vladimir Potanin), MMK, Alfa Bank (Mikhail Fridman), UES Russia (Anatoly Chubais), and Vimm-Bill-Dann.

    Gazprom, LUKoil, Sistema, Novolipetsk Steel, UES, Evraz and Severstal are listed on LSE; Newly-formed aluminum giant United Company RusAl is considering a London IPO this fall.

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