Major Russian Companies Could be Allowed to Withhold Key Corporate Management Info

Major Russian companies might soon be relieved of a legal duty to publicly disclose some information, Izvestya reports. According to the news outlet, the Ministry of Economic Development hammered out a bill that could allow firms not to publish information about its founders, top management or information that the company is in the process of reorganization or any new legal entity that may arise from it.

These measures, the government expects, will help avoid sanctions against major Russian companies and their managers.

Analysts believe that the measure should be temporary, otherwise it will affect the investment attractiveness.
“The ability to hide some of the information is appropriate as a temporary protective measure against Western sanctions, but no more than that,” says Sergei Kalenjyan, Dean of the Higher School of Corporate Governance of the Russian Academy of Science and Technology. According to him, there must be a time limit for the withholding of information by the companies, in order to avoid the creation of opaque schemes.

The manager of strategic analysis institute FBK Grant Thornton, Igor Nikolaev, believes that Russian business will lose a lot in terms of investment attractiveness if they are allowed to withhold information, since investors need predictability and transparency.

In early April, the U.S. Treasury Department imposed new restrictions against 38 Russian companies, businessmen and officials. The sanctions list included, among others, such large companies as Rusal, En +, Basic Element and GAZ Group. Later, the U.S. authorities agreed to ease sanctions against Oleg Deripaska’s companies if the businessman relinquishes his control over them. Russia has vowed to introduce tit-for-tat measures against American companies and businessmen.