President of the Russian Union of Industrialists and Entrepreneurs (RSPP) Alexander Shokhin proposed to limit the rights of non-resident shareholders and shareholders with unidentified citizenship “to protect national interests.” He announced this initiative in a letter to the head of the Ministry of Economy Maxim Reshetnikov, RBC reports. Such a step is proposed against the background of Western sanctions imposed in response to the Russian military operation in Ukraine, which began on February 24.
The measures proposed by Mr. Shokhin, according to the RSPP, will be temporary – for example, until the end of 2022. The exact dates in the union were not named. Restrictions will affect shareholders who are members of companies included in the list of strategic enterprises, or companies with state participation, or companies in which organizations with state participation or strategic enterprises own a stake of 20%.
Among the proposed measures:
- not to take into account the votes of foreign shareholders at the general meeting of shareholders (exceptions should be determined by the Central Bank or the right commission to increase the sustainability of economic development);
- deprive them of the right to demand the holding of an extraordinary general meeting of shareholders, not to send them ballots for voting on the agenda of the meeting;
- deprive them of the opportunity to demand access to public documents and information;
- to allow the company not to accrue and not to pay dividends on shares owned by non-resident shareholders;
- not to extend to them the right to demand redemption of shares in cases when a decision on reorganization / delisting is made or changes are made to the charter restricting the rights of shareholders;
- deprive them of the preemptive right to purchase additional shares / convertible securities of the company, as well as newly placed additional shares of a new category / convertible in them issue securities issued by open subscription;
- do not apply to them the rules arising from the purchase of more than 30% of the shares of a public company (for example, sending a mandatory offer to the owners of all securities after the purchase of such a package).
In addition, to reduce the negative effects of anti-Russian sanctions, the RSPP proposes a number of measures for a period of three to five years:
- lowering the threshold for the decision on delisting from 95% to 75% of the votes of all shareholders of the company, removing the limit of 10% of net assets for the redemption of the company’s own shares;
- reduction of the ownership threshold from 95% to 90% for forced redemption of shares;
- change in the procedure for determining the market price of shares in cases where it is determined as a weighted average of the results of trading (ie when buying shares from minority shareholders after reorganization and after buying a large stake of 30%), halving – from six months to three – calculation period weighted average price.
The Ministry of Economy has not yet given the RSPP an answer to these proposals, the union said.
Earlier, the United Russia party proposed to nationalize the production of companies that left Russia after the sanctions. The Public Consumer Initiative has sent to the government and the Prosecutor General’s Office a list of foreign companies that are proposed to be nationalized in the future. According to Izvestia, the list includes 59 companies, including Volkswagen, Apple, IKEA, Microsoft, IBM, Shell, McDonald’s, Porsche, Toyota, H&M. Interfax reported that the Central Bank has already approved a project on the external management of assets of companies that have left Russia.
Read more about the initiative in Kommersant’s publication FM External Management Outlines Course.