Auditors insist Rostelecom’s controlling interest should be ‘directly held’ by govt

21 Jun 2011

According to Russian news agency Prime Tass, the Russian Audit Chamber has concluded that the controlling interest in national telecoms operator Rostelecom must be directly held by the government. The decision comes after a probe into the ramifications of the so-called ‘mega-regional merger’, which saw the disparate interests of state-owned telecoms holding company Svyazinvest absorbed by Rostelecom on 1 April 2011. According to Rostelecom, as at 31 May 2011, Svyazinvest held 40.07% of the share capital in Rostelecom, with the remaining stakes held by the National Settlement Depository (22.56%), the Depository Clearing Company (11.99%) and Vnesheconombank (6.86%).

Russian telecoms minister Igor Shchegolev commented: ‘We expect a new player to appear on the market next year and hope that it will be capable of fulfilling the tasks set by the government, and that it will not demand constant subventions and subsidies, and will be able to survive and compete with other major players. Our estimates show that more than 50% will be controlled by the state. If in the future a decision is made to move on to a model that allows the company to be run without the full state-owned package, it will be a separate decision’.

Meanwhile, deputy Prime Minister Igor Shuvalov confirmed: ‘Svyazinvest is not on the list [of state-owned assets that the Russian government plans to sell by 2015]. The question of its privatisation should be raised only after reorganisation. Svyazinvest will cease to exist as a company [after the reorganisation]. We believe that after the reorganisation, after all of the corporate procedures, Rostelecom shares should be offered on the market’. In May 2011 TeleGeography’s CommsUpdate reported that Rostelecom had applied to the financial markets regulator to list up to 25% of its shares on an overseas stock exchange. In a disclosure document revealed that month, Rostelecom indicated that it intends to list 735.8 million shares, out of a total of around three billion, most likely on the London Stock Exchange, by the end of 2011. However, telecoms minister Schegolev explained: ‘As a rule, before a company can place shares on an exchange it has to present auditable accounting documents for the previous year. Therefore, it would be proper to consider such a possibility from 2012’. Federal budgetary requirements are thought to be a potential stumbling block.

Russia, Rostelecom