9 Sep 2022 10:28

Russia allows subsidiaries of strategic resource developers to not disclose info to "unfriendly" shareholders

MOSCOW. Sept 9 (Interfax) - Russia's president has issued an order that allows limited liability companies that are subsidiaries of strategic companies developing subsurface resources in Russia to not disclose information about their activities to their shareholders who are from "unfriendly countries."

The presidential order, No. 618 dated September 8, has been posted on the official website for publication of legislation.

"Limited liability companies, equity stakes in which are directly or indirectly owned by legal entities that are users of subsurface resource allotments located on the territory of the Russian Federation and included in the list of strategic enterprises and strategic joint-stock companies [...] have the right to not provide information about their activities to participants of such limited liability companies who are persons of foreign nations committing unfriendly acts," the decree said.

This is the latest measure to close access to Russian corporate information. Earlier, in response to sanctions against Russia over the military operation in Ukraine, the Central Bank and government allowed companies to temporarily not disclose certain information, such as interim and annual financial statements and auditor reports. This information is also being removed from public access on the Internet.

The government also gave companies the right to refuse to provide information to shareholders if this could lead to the imposition of sanctions.

A source told Interfax earlier that the Finance Ministry was drafting a presidential order that would allow LLCs to refuse to give shareholders access to corporate documents due to the threat of sanctions for themselves and "other parties."