Companies can better resolve corporate issues without votes of foreign shareholders — RSPP

The decree of Russian President Vladimir Putin, which allows large Russian companies not to take into account the votes of shareholders from unfriendly countries, will make it possible for them to regulate the decision making on critical corporate issues and continue the operate normally. This is an opinion Alexander Varvarin Vice-President for Legal Regulation and Law Enforcement of the Russian Union of Industrialists and Entrepreneurs (RSPP) shared with TASS.

"Today, these issues are in a state of deadlock, foreigners simply do not vote on them, do not attend boards of directors and shareholder meetings. Russian shareholders cannot violate the law and shareholder agreements. The decree of the President of the Russian Federation allows us to resolve the current situation and continue normal operation of companies," he said.

Varvarin also noted that the decree is an important and necessary decision in the field of regulation of corporate relations.

"In view of the sanctions applied, many foreign shareholders and members of management bodies do not participate in the adoption of corporate decisions of Russian companies. Often, participation in the adoption of such decisions can have criminal consequences for foreign persons," he explained.

This creates difficulties for the management bodies of Russian companies to make decisions on the most important issues, including the approval of a strategy, the payment of dividends, and personnel matters, he added.

On January 17, President Vladimir Putin signed an executive order setting forth a temporary procedure of adopting resolutions in Russian major joint stock companies in energy, machine-building and trade sectors. Management authorities of such companies will be able to make decisions without counting votes of shareholders from unfriendly countries. The temporary procedure will be effective until December 31, 2023 inclusive.