Putin sacks chief of staff

Russian President Vladimir Putin tonight signed an order relieving chief of staff Alexander Voloshin of duty, a Kremlin spokesman said.

Rumours that Voloshin had quit rattled Russian political and business circles for several days.

Voloshin reportedly tendered his resignation after Saturday’s arrest and jailing of Mikhail Khodorkovsky, the head of the Russian oil giant Yukos.

The announcement came hours after prosecutors froze a huge chunk of Yukos shares, plunging the stock market into its second nosedive in a week. The benchmark RTS Russian stock index closed down 8% after the announcement of the share freeze and Yukos shares lost 14%.

The stock market’s sharp reaction appeared to reflect investor fears that a probe of Yukos that began in July could foretell troubles for Russia’s biggest companies.

Many worry that the Kremlin could launch a broad revision of the results of the privatisation of the 1990s, in which tycoons like Khodorkovsky snapped up prized chunks of state assets at giveaway prices in dubious auctions.

The freeze was a new escalation in a four-month-old probe of Yukos, which took a dramatic turn on Saturday when Khodorkovsky was arrested and thrown in jail after being seized by special agents at a Siberian airport.

The arrest was widely seen as an action staged by some of President Vladimir Putin’s top lieutenants to avenge the tycoon’s political activities, which included funding of opposition parties.

Voloshin, a top Kremlin advocate of big business, reportedly resigned to protest at Khodorkovsky’s arrest. The resignation would signal a strengthening of the security-service faction in the Kremlin – connected with Putin from his days as a KGB agent – which appears eager to stem the influence of magnates such as Khodorkovsky.