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Russia's Yandex to adjust corporate governance structure

Credit: REUTERS/Shamil Zhumatov

Russian internet company Yandex plans to adjust its corporate governance structure in an effort to respond to an "evolving regulatory environment" with the creation of a Public Interest Foundation (PIF), the company said on Monday.

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MOSCOW, Nov 18 (Reuters) - Russian internet company Yandex YNDX.O plans to adjust its corporate governance structure in an effort to respond to an "evolving regulatory environment" with the creation of a Public Interest Foundation (PIF), the company said on Monday.

Yandex said the company's priority share, currently held by Russia's state-owned Sberbank SBER.MM, will be transferred to the PIF, whose board of directors will include Yandex CEO Arkady Volozh.

The ownership structure of Yandex has been in the spotlight since Russia's lower house of parliament proposed a draft law limiting foreign shareholding in Russian internet firms to just under 50%.

Yandex N.V., the parent company of Yandex Group, is registered in the Netherlands. Volozh holds 48.41% of the voting rights in the company, according to Yandex’s annual report.

The PIF board will be made up of three members of Yandex's management team - Volozh, deputy CEO Tigran Khudaverdyan and HR Director Elena Bunina - as well as representatives from five Russian universities and three non-governmental organisations.

Yandex's golden share will pass to PIF, which will have no economic rights, but certain voting rights, including the power to block a single entity accumulating 10% or more economic or voting interests, down from the current threshold of 25%.

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Also on Monday, Yandex authorised the repurchase of class A shares of Yandex N.V. worth up to $300 million, sending Yandex company shares up more than 5% as of 0722 GMT.

In a further effort to assuage any fears over governance volatility, Volozh pledged not to sell 95% of his class B shares before 2022.

All changes will be subject to shareholder approval at a meeting on Dec. 20. Sberbank said separately on Monday that "in general" it was supporting proposed changes at Yandex and the bank's management board was due to meet on Tuesday to review the proposals.

(Reporting by Maria Kiselyova; additional reporting by Tatiana Voronova; writing by Alexander Marrow; editing by Katya Golubkova and Jason Neely)

((maria.kiselyova@thomsonreuters.com; +7 495 775 1242; Reuters Messaging: maria.kiselyova.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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