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Leaders
December 2019 www.intellinews.com I Page 9
would transfer to the publically owned shares, giving the majority control in the company to the pub;ic shareholders – something the Russian government was not happy about.
“No country in the world would like to see its biggest tech company that is deeply wired into
its economy suddenly controlled from abroad overnight. This is not just a Russian issue. This
is a global issue,” a market participant told bne IntelliNews. “This deal is a delicate balancing act of addressing Russia’s legitimate national security concerns but at the same time leaving one of Russia’s best and most successful management teams in control of the company in a deal that should also be acceptable to the company’s international shareholders.”
“The amendments include the creation of a Public Interest Foundation (PIF), with no economic rights, but with certain limited governance
rights. The Company’s Priority Share, currently held by Sberbank, will be transferred to the PIF and its terms will be amended. The amended Priority Share will give the PIF the right to block the accumulation by a single entity, or a group
of related parties acting in concert, of shares representing 10% or more of economic or voting interests in Yandex (compared with the current threshold of 25%),” Yandex said in a press release.
The proposed changes have to be approved at the EGM in December and requires 75% approval from the Class A Shareholders, so in this case Volozh alone won’t be able to push the deal through. There are a number of complicated corporate governance changes on the docket for the EGM that have to be approved by shareholders that include the creation of two new directors on the board that are there to represent the public interest. The powers of these directors is limited to questions that affect the public interest and national security concerns and the overall management of the company is left to its existing team.
“The PIF’s two designated directors will also serve on a newly created Public Interest Committee of
the Yandex NV board, which will have oversight over a limited and clearly defined set of questions deemed to be of public interest,” Yandex said in a press release and went on to name those rights as:
• Transactions involving the sale or transfer of material intellectual property
• Transactions involving the sale or transfer of Russian users’ personal data to non-Russians
• Changes to Yandex internal policies on protection of Russian users’ personal data • Entry into agreements with a non-Russian
state or international intergovernmental organisations
The members of the 11 person PIF include: “representatives from five leading Russian universities (Higher School of Economics, Moscow Institute of Physics and Technology, Moscow State University, St Petersburg State University and the St Petersburg National Research University of Information Technologies, Mechanics and Optics) and three non-governmental institutions (the Russian Union of Industrialists and Entrepreneurs (RSPP), Moscow School of Management
Skolkovo and the Endowment of Moscow School #57), all of which have long and successful histories of cooperation with Yandex. The PIF board will also include three representatives
of Yandex management (Arkady Volozh, Tigran Khudaverdyan and Elena Bunina),” Yandex said.
Volozh has also changed the rules surrounding his shares and they votes they carry. As part of the deal he has agreed to lock up 95% of his shares for at least years, meaning he can’t sell during this period.
It was also agreed to change the rules surrounding the transfer of his majority voting rights in the event of his death. Volozh has now set up a family trust and in the event of his death the shares will be transferred to the trust for two years. The representative of the trust trust is obliged to vote in line with the board, in order to ensure business continuity. This arrangement is designed to provide some breathing space for