Page 30 - bne_Magazine_September_2018

30 I Special focus bne September 2018
Digging into Russian dividends
Ben Aris in Berlin
Twenty years ago Russia suffered the most debilitating financial cri- sis since the collapse of the Soviet Union in 1991. An Asian currency crisis had taken a year to filter around the world and finally infected Russia’s econ- omy after oil prices collapsed to $10 a barrel. The cash-strapped Russian econ- omy quickly collapsed and on August 17, 1998 the ruble lost three quarters of its value in a day, the entire top tier of the banking sector was destroyed and the state defaulted on some $40bn worth of treasury bonds. The economy was left in tatters and the man on the street would have left the country if he could.
That was at the peak of the wild 90s. Corporate takeovers were contested using guns and “breakfast bombs” (explosives hidden under cars to catch executives on the way to work). And taking control of a company often amounted to little more than crossing
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a shareholder’s name out of the compa- ny share register and writing your own in on top.
Russia has come a long way since then. The system is far from perfect, but prop- erty rights are respected and enforced. The killing has stopped and the economy
and becoming a minority financial shareholder is a routine strategy.
All this is because Russian business- men’s attitude to their equity has changed. In the 90s owning equity was simply a way of controlling a compa- ny’s cashflow that could be siphoned
“The revolution in corporate governance that was pioneered by oil major Yukos in the early noughties has spread to most of Russia’s leading companies”
is stable and growing. More than any- thing the revolution in corporate gover- nance that was pioneered by oil major Yukos in the early noughties has spread to most of Russia’s leading companies
off using a network of shell companies and the so-called transfer pricing schemes. But since then equity has changed its role and now is increas- ingly the conduit for paying investors