- The Washington Times - Tuesday, December 14, 2004

MOSCOW (AP) — Swedish furniture giant Ikea’s Russian division was forced to call off the official opening ceremony of its second, huge shopping mall to the north of Moscow after officials decided at the last minute that visitors’ cars could damage an underground gas pipe.

A retail pioneer on the Russian market, Ikea was puzzled by the ban Friday, and said there had been no concerns previously over the gas pipe. Company managers have said that the company has been pressured for not paying bribes in Russia.

“I don’t understand what’s happening, and I consider the current situation to be sabotage against Russia,” the Izvestia newspaper quoted Lennart Dahlgren, the head of Ikea’s operations in Russia, as saying.

“One has to have a certain amount of courage to react to an unfair situation that has occurred through the fault of the authorities,” Mr. Dahlgren said. Izvestia also quoted him as saying that “I fear for my life,” but did not say explicitly what had triggered that.

Yevgeny Seregin, head of the Moscow region’s construction department, said that Ikea had been told that it would need to build a road around the gas pipe, Izvestia reported.

“The investors decided to quietly ignore this. After all, they would have to spend more money,” Mr. Seregin said.

By opening its second, $300 million mall in the Moscow region, Ikea was set to continue blazing a trail it started after Russia’s 1998 financial crash, when it was the first Western retailer to enter the battered market. Russian shoppers flocked to its store on opening day and the company reported record sales.

Ikea has plans to open 18 stores in Russia.

The Vedomosti daily estimated that Ikea could lose $150 million if it fails to open in time to accommodate the pre-New Year shopping spree.

The setback comes as Western investors look to Russia with new caution.

On Sunday, the core production unit of the Yukos oil giant is expected to be sold in what observers say is the culmination of a Kremlin-driven campaign to politically neutralize its jailed former CEO Mikhail Khodorkovsky.

Last week, Russia’s No. 2 mobile-phone provider VimpelCom was slapped with a $157 million tax bill. Analysts have said the bill is the extension of a fight between its core shareholder — tycoon Mikhail Fridman — and a company believed to be controlled by Russia’s information technology minister.

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