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Articles & publications
15.06.2010
Svyazinvest committed to democracy: holding’s indendent directors to stay on RTO boardsRBC daily, Elizaveta Sergina
Despite the changes which are expected to take place in the capital of regional telecommunications operators after merging with Rostelecom, the number of independent appointees on RTO boards of directors, will likely not be decreased. As RBC Daily learned, Svyazinvest has decided to retain these positions on the boards of its own subsidiaries, until such time as they receive their own status as branches.
The assumption is that after the regional telecommunications operators of Svyazinvest are merged with Rostelecom, the number of independent appointees on the boards of directors would be reduced, a source which represents the interests of one RTO minority shareholder told RBC Daily. According to this source, reshuffles in the boards of directors could result in the dilution of minority shareholder’s equity positions owing to the RTO share swaps.
”However, in view of this situation Svyazinvest has decided to meet investors half way and believes it would be possible to retain the positions of independent directors on the boards”, the source points out. The source goes on to note that such decision is of special importance to minorities in the context of the upcoming merger. “And although the merger will take place de facto as early as June, a number of unresolved issues still need to be dealt with. The range of unresolved issues includes the real estate owned by RTOs, and also the problem of rolling out cellular assets. It should also be noted that minority representatives could influence the decision-making process on all of these positions”, the source claims.
The merger of Svyazinvest’s regional telecom operators with Rostelecom was approved as part of the concept for the reorganization of Svyazinvest. Board of directors meetings are scheduled to be held at all seven RTOs and Rostelecom in June, during which shareholders are to discuss the merger of Svyazinvest’s remaining subsidiaries with the national operator. According to the timeline, as early as next spring the various RTOs will be turned into branches.
”Hopefully the boards of directors of RTOs will retain the previous number of independent directors. Their presence is necessary to ensure the transparency of the reorganization process”, according to executive director of the Investor Protection Association (IPA) Denis Kulikov. He points out that Sibirtelecom’s recently held meeting approved the previous number of independent directors on the board of directors (three persons). Meanwhile, people at IPA expect this trend to remain in place. Svyazinvest will attempt to retain its positions of independent directors on the boards of directors of RTOs”, says first deputy general of Svyazinvest Alexander Provotorov. Mr. Provotorov went on to say that the decision on each specific candidate and the number of appointees will be adopted by each company on an individual basis.
Independent director for legal issues in the field of telecommunications Anton Bogatov claims that maintaining independent directors on RTO boards of directors is a positive trend. However, he pointed out that despite the presence of independent directors in most Russian companies, their decisions frequently depend on the position of majority shareholders.
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