Communications minister declines seat on Rostelecom board

29 Jun 2011

According to Reuters, Russian communications minister Igor Shchyogolev has declined to take a seat on the board of state-controlled national operator Rostelecom, after being elected as a member at the firm’s recent annual general meeting (AGM). It is believed that the move is in compliance with President Dmitry Medvedev’s order that all government ministers should relinquish seats on state company boards by October 2011. The purge is expected to improve Russia’s poor investment climate by reducing the excessive state influence in competitive sectors.

Shchyogolev was re-elected at the AGM, despite prior pleas not to vote for his candidacy. The votes cast in his favour came courtesy of a group of minority shareholders led by former Svyazinvest chief executive Yevgeny Yurchenko. The group, known as the Popov Fund, claims that it owns around 15% of Rostelecom’s shares, with Yurchenko holding 8.2% himself. It is expected that Yurchenko will now exercise his right to call an extraordinary shareholder meeting to try and assume Shchyogolev’s seat on the board. According to Reuters, Shchyogolev, who previously acted as the chairman of Svyazinvest’s board, recently left the boards of both Svyazinvest and Channel 1 in accordance with Medvedev’s wishes.

As previously reported by TeleGeography’s CommsUpdate, on 1 April 2011 Rostelecom merged seven so-called ‘mega-regional’ telcos into its central operations, namely: North-West Telecom, CenterTelecom, Southern Telecommunications, VolgaTelecom, Uralsvyazinform, Sibirtelecom and Far East Telecom. All seven firms had previously operated under the control of state-owned telecoms holding company Svyazinvest. In May 2011 Rostelecom 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.

Russia, Rostelecom, Svyazinvest