To overcome sanctions, MTS Russia transfers 1% shares to CEO

To overcome sanctions, MTS Russia transfers 1% shares to CEO

The owners of the Russian telecommunications company Mobile TeleSystems (MTS) transferred about 1% of their shares to the president & CEO of the company, Vyacheslav Nikolaev, said an official statement.

Thus, the effective ownership share percentage collectively held by Russian financial/industrial holding company Sistema and its subsidiaries has been reduced to below 50%, now standing at 49.94%. According to a section of the media, the move is in order to protect themselves from potential sanctions.

They announced a reduction in the effective share of ownership of the main shareholder of AFK Sistema in its capital to 49.94%. Viacheslav acquired 19,983,816 ordinary shares in MTS held by Bastion, a wholly-owned subsidiary of MTS itself, in addition to shares previously acquired under MTS’ long-term incentive programmes, to increase his stake to more than 1.0%.

“Increasing my stake in MTS at this challenging moment is driven by my strong and continued belief in the vision, strategy, and future of MTS. We see the potential for powerful new drivers to emerge as local companies take on even more significant roles in the Russian economy,” Vyacheslav said.

The media reports indicated that this step is associated with fears of imposing sanctions on AFK Sistema and its main shareholder Vladimir Yevtushenkov (who owns 59.2% of the corporation’s shares), which would negatively affect the work of MTS. Now that AFK Sistema does not have a controlling stake in MTS, there is no longer such a risk for the operator.

The transfer of shares to Vyacheslav was approved by the operator’s board of directors on the recommendation of its committee on remuneration and nominations. Sistema is a publicly-traded Russian investment company with a diversified portfolio of assets serving over 150 million customers in the sectors of telecommunications, high technology, financial services, retail, paper and packaging, agriculture, real estate, tourism, and medical services.

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