Putin allows sanctioned Russian firms to disregard shareholders from ‘unfriendly’ states

Russian President Vladimir Putin signed a decree on Tuesday, allowing certain companies to disregard the votes of shareholders from so-called ‘unfriendly’ countries when making corporate decisions.

The document, published online on a legal information portal, will apply to companies in the energy, mechanical engineering and trade sectors with annual revenue of more than 100 billion rubles ($1.46 billion). It will remain in force until the end of 2023.

According to the new law, management of the companies will be able to make decisions without counting the votes of shareholders from ‘unfriendly’ countries. To qualify, however, the companies must meet a number of criteria. One of these is that other countries or international organizations must have imposed sanctions against the owners or beneficiaries of such companies. Another criterion is that foreign persons with ties to unfriendly states have interests of 50% or less in the authorized capital or shares in such companies.

In case nationals from unfriendly states are members of a company’s management authority, other shareholders will have the right to pass a resolution without counting their votes, the document said.