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Leaders
December 2019 www.intellinews.com I Page 8
The non-governmental foundation is modelled on a Dutch stichting, an ownerless special-purpose vehicle often used to separate ownership from control and protect assets from hostile takeovers. Its board is made up of representatives from
five Russian universities, three Russian non- governmental organisations, and three top Yandex executives, the Financial Times reported.
The Russian government is caught on the horns of a dilemma. On the one hand it is keen to see Yandex develop into a world-class company. It
is already a European leader in innovation and a major boon for the government’s efforts to digitise the Russian economy. On the other hand, Yandex controls large amounts of personal data on the Russian population that the authorities are keen to safeguard. Russia has already implemented a set of laws that demand internet companies keep their data on users in Russia where it is subject to Russian law.
Yandex already has a golden share that is held by state-owned bank Sberbank since 2009, but this will now be transferred to the Public Interest Foundation.
Sberbank has also been at the forefront of tech innovation and is in the process of transforming itself into a technological platform. The CEO of the bank German Gref has already suggested dropping the word “bank” from its name and rebranding the retail banking giant as simply “Sber”.
However, Yandex has had a complicated relationship with Sberbank. In addition to successful joint projects Yandex Market and Yandex Money, they have also found themselves in stiff competition, particularly after Sberbank bought a 20% stake in Yandex rival Mail.ru to take its share in the company to 45% and will build
up a rival business. The joint venture between Sberbank and Yandex to set up an e-commerce marketplace that would have taken a significant share of the Russian economy into the cloud reportedly ended in divorce in July after only a year of cooperation. But the companies continue
to work together and industry insiders close to the two companies say their joint ventures are
not only still functioning, but some are highly profitable. Since then Sberbank bought a 20% in Yandex competitor Mail.ru to take its share in the company to 45% and will build up a rival business.
The restructuring of Yandex’s management and the change of owner of the golden share will not affect the current shareholder structure of the company where Volozh remains the largest shareholder and in charge of day to day operations.
“We needed to find a decision that would satisfy three sides by keeping management in our hands, reassuring foreign investors about Yandex’s business potential, and defending national interests,” Volozh told staff in his email, explaining the need for the change.
Before the changes are put in place Yandex executives are due to meet with US investors, who own most of its free float, ahead of an extraordinary general meeting (EGM) slated for December 20 where the decision needs to be approved by shareholders.
“I am very committed to this business and urge our shareholders to support the proposals we are announcing today,” Volozh said in a statement. “With this behind us, we can get back to doing what we do best: innovating, providing world-class products and services to our users, and delivering superior returns to our investors.”
Striking the balance between corporate needs and public interests
The new structure also removes the danger that control of the company could easily fall into the hands of foreign portfolio investors, most of which are American.
The quirks of the shareholder structure means that the shares of the company’s CEO Volozh give him a de facto majority control of corporate voting. However, if Volozh were to die these voting rights would be cancelled and the votes