Russian authorities oppose proposal to allow businesses not to publish financials until July 2024 - RSPP

Russian regulators have rejected a proposal from the Russian Union of Industrialists and Entrepreneurs (RSPP) to allow businesses to not disclose their financial statements until July 2024 due to the risks of sanctions.

The proposal to extend restrictions on information disclosure was foremost opposed by the Central Bank of Russia (CBR), and the government supported the bank's position, the president of the business lobby group, Alexander Shokhin told reporters on the sidelines of the Eastern Economic Forum on Tuesday.

"We actually have an answer, but we're not happy with it. Everything is already good [with information disclosure], since there is a list of exceptions from disclosure of information," Shokhin said.

"It's more the position of the CBR that is negative, since they are responsible for the development of the financial market. And the government supports the Central Bank, believes it is necessary to develop the financial market," Shokhin said.

Earlier in the summer the RSPP asked the government to allow companies to not disclose financial statements until July 2024. The request was made because the government resolution issued in the spring of 2022 that suspended companies' obligation to disclose information about their activities due to the threat of sanctions against Russian entities and individuals expired on July 1, 2023. A new government resolution, No. 1102, also allows companies to conceal information sensitive to the risk of sanctions in some cases, but unlike the previous rules it does not allow them to not disclose information such as balance sheets and reports about their financial results.

"We believe that one point needs to be added - if a company itself, including a public one, believes that the risks of disclosing information are greater than the advantages of disclosure in terms of raising investment, then there should be some registry of these companies that are included in this additional list [of those who do not disclose some information] on an individual basis besides that included in the resolution of June 4," Shokhin said on Tuesday.

Companies themselves have an interest in attracting investors, he said. "Even companies that have the right not to disclose start to open something up when they understand that there are positive effects. Therefore, our position is that this should be flexible," Shokhin said.

When companies "understand that potential restrictions and sanctions can sharply reduce investors' interest in investing in these companies, companies should have the right to weigh the pros and cons themselves," Shokhin said.