Russian President Vladimir Putin has fired the country's defence minister, two weeks after a criminal probe was opened into alleged fraud in the sell-off of military assets.
Anatoly Serdyukov has been widely unpopular in the ranks because of his reforms that radically cut the number of military officers and army units, but Putin had staunchly backed him in the past and his dismissal came as a surprise. Some observers say that Serdyukov's successor may take a less radical approach to the military reform.
Putin made the announcement in a meeting with Moscow regional governor Sergei Shoigu, whom he appointed as the new minister.
Putin's comments appeared to connect the decision to a probe announced by the country's top investigative agency last month into the sale of military assets, including real estate, at prices far below market value.
The Investigative Committee says the state suffered damages of 3 billion rubles (NZ$114 million) in just a few cases reviewed.
Putin did not give specifics in his televised remarks, but said he made the decision "in order to create the necessary conditions for the objective investigation of all issues" regarding the situation in the Defense Ministry.
Russia's military establishment has been haunted by corruption accusations for years and several top military officials have been convicted of embezzlement.
The case announced in October involves Oboronservice, a state-controlled company whose activities include servicing military aircraft and arms and constructing military facilities.
Investigators have searched Oboronservice's offices and the apartment of Yevgeniya Vasilyeva, a senior company official who formerly headed the Defense Ministry's property department and was a close aide of Serdyukov.
Investigative Committee spokesman Vladimir Markin said early today (NZ time) that Serdyukov would be questioned in the probe "if there is a reason" for doing so.
Serdyukov, a former furniture salesman, entered public service as a tax official and quickly rose through the ranks to become head of the Russian tax service before being appointed defense minister in 2007. Russian media have speculated that he owed his quick career to marrying a daughter of Viktor Zubkov, a close associate of Putin who was prime minister in 2007-8 and now serves as chairman of state-controlled gas monopoly Gazprom.
Some Russian media reports linked Serdyukov's ouster to his connections with Vasilyeva, which reportedly angered his father-in-law. But most observers agreed that while a family conflict could have triggered his firing, the real reason behind it could be a clash of interests over a costly military modernization program.
Serdyukov was widely hated by many in the military for his reform that dismissed as many as 200,000 officers, disbanded many units and turned plenty of military assets over to civilian hands. Over the past few years, he also has been locked in conflicts with defense industries over purchasing new weapons, pushing them to lower prices.
Speculation about his dismissal had floated around for years, but he had received Putin's staunch backing until now. Putin authorized and publicly praised Serdyukov's reforms, and it was not immediately clear if his legacy will now be reviewed.
The appointment of Shoigu, who had served as the nation's Emergency Situations minister for two decades before being appointed the regional governor half a year ago, will likely be welcomed by many in the military.
"Shoigu may now find himself in a difficult position facing the pressure for revising what has been done," military analyst Alexander Golts said on Ekho Moskvy radio.