Three cos to be added to list of economically significant organizations -first dep Russian econ minister

ST. PETERSBURG. June 6 (Interfax) - The Russian government's list of economically significant organizations (ESO) will be supplemented by three more companies, a decision on which was reached a few days ago, First Deputy Economic Development Minister Ilya Torosov told Interfax on the sidelines of the St. Petersburg International Economic Forum.

"There will be three more. A total of nine [companies will be on the list]," he said.

The Russian Economic Development Ministry requests from relevant ministries and agencies to put companies on the list, with the final decision made by the government.

The Russian government approved the first edition of the list of Economically Significant Organizations at the beginning of March 2024. It included legal entities participating in the ownership structure of Alfa-Bank, AlfaStrakhovanie, the X5 and Azbuka Vkusa chains, and fertilizer manufacturer ACron . These were, respectively, JSC AB Holding, UNS-Holding LLC, X5 Corporate Center LLC, City Supermarket LLC, and JSC Acron Group. Khakassia's Arshanovsky LLC open-pit mine was also on the list.

ESO status provided for by Law N470-FZ allows a company's Russian beneficiaries to receive securities and shares in the company into direct ownership through the courts excluding foreign holding companies from the ownership chain, or to transfer the rights to them to someone else. In addition, the document allows, through the courts, for the temporary suspension of the corporate rights of the foreign holding structure in relation to the ESO, for example, to vote at meetings, receive dividends, or dispose of securities and shares.

The economically significant organization mechanism was first used by authorities with respect to X5 Retail Group, "related" to Alfa-Bank. The Russian Industry and Trade Ministry filed an application to suspend X5's corporate rights in Corporate Center X5 LLC. The Moscow Region Arbitration Court granted the request on April 25.

Similar requests were later granted by the court in relation to foreign structures that own four more ESOs. Acron is the exception so far.