14 Sep 2010 10:36

OGK-2 moving register from Central Moscow Depositary

MOSCOW. Sept 14 (Interfax) - Gazprom's OGK-2 wholesale generating company has become the latest high-profile issuer to dispense with the services of Central Moscow Depositary (CMD), which is having its registrar's license revoked following a probe by the markets regulator that uncovered a number of alleged violations.

OGK-2 said in a statement that its board of directors on September 10 decided to terminate the contract with CMD effective November 9, 2010, and had confirmed CJSC Specialized Registrar - Gas Industry Registrar as its new registrar effective November 10, 2010.

Several companies, most of them from the power sector, have dispensed with the depositary's services over the summer. Reports say an inspection in June revealed as many as 13 violations in its operations and a reported nine fines totaling 6.3 million rubles were imposed.

Federal Financial Markets Service (FFMS) chief Vladimir Milovidov said on September 9 that the registrar's license had been pulled but with a stay until February 1, 2010 to enable issuers to move their registers or complete share placements.

Milovidov said the regulator's decision to pull the license "confirmed the infringements set down in the inspection report." He said there had been several grounds to revoke the license, and they included ignoring court rulings, instructions by the regulator, and regulations to counter money-laundering. The regulator is prepared for litigation if the depositary decides to challenge the decision, he said.

CMD said it reserves the right to challenge the decision to strip it of its registrar's license in court, sand might do so once it receives official paperwork and it and its lawyers have analyzed this.

The depositary said on September 10 that the decision was in no way affecting its business, that it was operating to normal schedule and that restrictions had not been imposed on accepting new clients and conducting transactions.

The depositary said that the regulator's inspection report, the depositary's own substantiated objections to it and legal practice presented no grounds for such stringent punishment as a license withdrawal. The depositary said representatives of the professional community, the business community and many of its clients shared that conviction in its entirety.

Tyumenenergo and Lenenergo , as well as the Volga and Centre, Volga, South and Urals inter-regional grid companies that are controlled by the state-owned the Inter-District Grid Company Holding (IDGC Holding) have all moved their shareholders' registers from CMD.

At the end of August it was reported that all state power companies had been instructed to sever ties with the depositary and that the instructions came from Russian Deputy Prime Minister Igor Sechin.

Two privately owned generating companies - the Sintez Group's TGK-2 and E.ON's OGK-4 have also dispensed with the depositary's services.

In addition seafood retailer Russian Sea (Russkoye Morye), Murmansk Shipping , Northern Shipping , Motovilikha Works and some other companies have transferred to other registrars.