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NEW YORK -- Russian President Vladimir V. Putin strongly defended the purchase by Rosneft, a state-controlled company, the Baikal Finans Group, which won Sunday's auction for the largest subsidiary of the oil giant Yukos, reported the New York Times.
"Today, the state, using absolutely legal, market mechanisms, is ensuring its interests -- I consider this perfectly normal," Putin told reporters at a news conference in Moscow. The Baikal Finans Group, which had widely been thought to be a shell company.
Putin talked of how the oligarchs, or private businessmen, obtained properties at bargain-basement prices soon after the breakup of the Soviet Union in 1991. "Some market participants got multibillion state assets using different tricks, including some violations of then-existing legislation," Putin said.
By contrast, he said, the purchase by Rosneft "was done in absolute conformity with market means."
With the purchase complete, Rosneft is scheduled to merge sometime next year with Gazprom, Russia's natural gas monopoly, which had widely been thought to be the government's choice to win the auction in the first place.
The Bush administration is protesting Russia's auction of Yukos's main oil production unit and warned it could have a "chilling effect" on foreign investment in Russia, according to Reuters.
"We are disappointed that Russia went ahead with the auction of the Yukos subsidiary," White House spokesman Scott McClellan told reporters on Tuesday.
President Bush could raise the issue when he meets with Putin on Feb. 24 in the Slovak Republic
McClellan's toughly worded statement on Yukos stood in contrast to Bush's pledge on Monday not to let disputes get in the way of good relations with Putin, a key ally in the war on terrorism.