Resolution signed with list of confidential corporate info, grounds for restricting disclosure - Russian govt

MOSCOW. July 5 (Interfax) - The Russian government has set the list of corporate information that issuers of securities are still permitted not to disclose in order to protect themselves from possible restrictive measures, and the corresponding resolution has been signed, the government's press service said in a statement.

Companies subject to sanctions, banks authorized in the field of state defense orders, organizations registered or operating in Crimea, Sevastopol and new Russian territories, as well as structures inside the military-industrial complex, will be able to hide data.

Companies will be able to exercise the right to publish data in truncated form if, in their opinion, the disclosure or provision of information will lead, or may lead to the introduction of sanctions against them, as well as other persons, according to published resolution No. 1102.

These legal entities will be able to limit disclosure of the data specified in a special list. It includes, among other things, information on the composition of the management and control bodies over the financial and economic activities of issuers, information on affiliates and subsidiaries, financial investments, foreign currency transactions, and transactions, including data that the transactions have not been made.

"In addition, the list contains information about the segments of the issuer's activities in terms of information about the provision of services to them, about the products manufactured, the purchase of goods, the performance of some work, information about counterparties, their industry and geographical structure," the government press service said.

A narrower list of data permitted for non-disclosure is proposed for situations where the issuer itself does not belong to the listed structures, but the disclosed information concerns a sanctioned person, a bank authorized in the field of state defense orders, a defense industry structure, or persons working in Crimea and new territories. In this case, the issuer will be allowed not to disclose information about these persons, about participation in capital, if any, as well as about transactions.

In addition, data on operations and licenses related to the implementation of the state defense order, military-technical cooperation, and the sale of military or dual-use products should not be made public.

This ruling was prepared as part of the gradual return of companies to the disclosure of their corporate reporting. A year ago, due to the threat of expanding Western sanctions, they received the right not to disclose any information about themselves, in particular interim and annual accounting (financial) statements, as well as IFRS statements. This was in effect until July 1, 2023, and was provided for by government decree No. 351 of March 12, 2022.

"Unlike Resolution No. 351, according to which an issuer could not disclose any information at all, Resolution No. 1102 does not provide for complete data nondisclosure. It does not imply the possibility to not disclose, for example, the balance sheet and income statement," the head of the Information Disclosure Service of Interfax Group, Dmitry Olenkov said.

In fact, there was a return to the concept previously outlined in Resolution No. 400 of 2019, which allowed issuers already subject to sanctions, as well as authorized banks in the field of state defense orders, not to disclose the data listed in a special list. It mentioned, in particular, information about the shareholders and controlling persons of the issuer, members of its management bodies, subsidiaries, counterparties, etc.

The new document has expanded the list of companies that may not partially disclose data in comparison with Resolution No. 400. It includes companies operating in new Russian regions, Olenkov said. The list of information that is allowed not to be disclosed has also increased: data on candidates for management and control bodies, information on subjects of reorganization and persons among whom a closed subscription for shares was carried out have been added.