Subsidiaries banned from voting in parent company

AO UniCredit Bank
Fri, 04/09/2015

Subsidiaries of Russian Joint Stock Companies will not be able to vote for shares of their parent companies any longer.
                                                                                                                                                                                                                                                        
In order to prevent schemes where companies lobby their interests via stocks owned by their subsidiaries, the Ministry of Economic Development of the Russian Federation has announced a draft law amending the Federal Law on Joint Stock Companies. 

Almost all OECD countries have already imposed similar restrictions which shall avoid that companies make important decisions, e.g. the election of management, in the interest of the company, not its shareholders.

The draft law, which points into the direction of improving protection of shareholders’ rights, may come into effect at the end of August 2015. However, companies will have a 2-year transition period to restructure their capital.

 

Contact:
Ekaterina Konovalova,
Relationship Manager
Global Security Services Russia
Ekaterina.Konovalova@unicredit.ru