AFK Sistema's effective stake on MTS falls below 50% as CEO acquires more shares
MOSCOW. March 24 (Interfax) - The effective stake owned by Vladimir Yevtushenkov's AFK Sistema holding in telco MTS has fallen below controlling.
Sistema until now owned 50.54% of MTS. MTS said on Thursday that Sistema's effective stake was now 49.94%. At the same time CEO Vyacheslav Nikolayev has increased his stake from 0.022% to 1.022%, having received shares from the company's wholly owned subsidiary Bastion LLC.
Nikolayev "has acquired 19,983,816 ordinary shares in the company, in addition to shares previously acquired under MTS's long-term incentive programs," the operator said in press release. The transfer of the shares held by Bastion LLC was approved by the MTS board of directors, having been earlier recommended for approval by the board's remuneration and nomination committee.
The MTS press office did not comment on the parameters of the deal, which took place on March 24.
"The move reflects generally accepted best practices around higher CEO ownership, which can help better align the interests of the CEO and the company, incentivize long-term shareholder value creation, provide additional executive weight in decision-making processes, and better balance shareholder and management influence in corporate governance processes," MTS said in the press release.
The company also stated that after the transfer of shares to Nikolayev, the total stake of AFK and its subsidiaries in the capital of MTS did not change and remained at 42.085%, as Sistema and its subsidiaries were not a party to the transaction.".