Russia's Kudrin quits Putin tour, media abuzz

SOCHI, Russia, Sep 22 (Reuters) Finance Minister Alexei Kudrin, widely respected by foreign investors for his prudent stewardship of Russia's huge oil wealth, could be dropped in a reshuffle, expected on Monday, media speculated.

The speculation about Kudrin heightened when journalists saw him walk out of an investment exhibition in the Black Sea resort of Sochi that President Vladimir Putin was attending.

Putin has ordered his new prime minister, Viktor Zubkov, to produce a new line-up to lead Russia through parliamentary and presidential elections over the next six months. A government source told Reuters that Monday was the likely day for an announcement.

Investor interest has centred on the fate of Kudrin and the cabinet's other leading liberal, Economy Minister German Gref. Both men were in Sochi for a government-sponsored investment conference yesterday.

Newspapers have been predicting for days that both men will be casualties of the cabinet shake-up and reporters watched their behaviour closely for clues.

Correspondents said Kudrin, architect of carefully-framed macroeconomic policies, suddenly leave a tour of an investment exhibition, headed by Putin, yesterday and go to a restaurant for lunch with an aide.

Putin continued touring the exhibition with other key cabinet colleagues and then went to a meeting with investors.

Guards later barred Kudrin and his aides from entering the cordoned-off area where Putin was meeting the businessmen. After verbal exchanges, Kudrin went in on his own.

Last evening, the normally shy and reserved minister went out alone again, this time to an exclusive night club in Sochi designed like a offshore oil platform, where he declined to answer a reporter's question about his future, saying only with a smile: ''Everything will be fine.'' Putin has given no hint about who may go and who may stay in the reshuffle. But he has blamed some ministers in the current government for being too preoccupied with their employment after the presidential election in 2008.

Kudrin is board chairman of diamond miner Alrosa, which has started active negotiations to diversify its business and acquire gold and coal mining assets.

The minister has repeatedly refused to comment on press reports that Putin has asked him to leave the cabinet but his unusual behaviour at the investment conference left observers more convinced than ever that he is likely to go.

There is less certainty about what may happen to Economy Minister Gref, who chairs the government commission coordinating preparations for the 2014 Winter Olympics in Sochi.

Gref was at one stage tipped to become head of the billion state corporation, to be created later this year, which will manage all the construction work for the games.

But Putin appointed former oil pipeline monopoly boss Semyon Vainshtok to head the corporation, a blow to Gref, a bespectacled ethnic German, known for his elegant dress style.

Both Kudrin and Gref worked with Putin in the St Petersburg mayor's office in the 1990s.

Gref travelled to Sochi with Alexander Shokhin, a former economy minister and chief debt negotiator, who now heads a business lobby.

Both men went around the plane, shaking hands with aides and journalists.

Gref, who moderated many discussions at the Sochi investment conference, introduced Shokhin as a former Economy Minister at one of the sessions.

''There is no such thing as a former Economy Minister, and that applies to you as well, German Oskarovich,'' Shokhin snapped back.

He said ''no comment'' when asked by Reuters whether he had received an offer to work in the new government.

REUTERS SBC KN1724