Restricts decision-making by foreign minority shareholders in energy, machinery manufacturing and trade

On 17 January 2023, the President of the Russian Federation issued Decree No.16, which allows Russian companies operating in the energy, machinery manufacturing, and trade sectors to change their corporate decision-making to prevent minority shareholders and their appointed directors linked to foreign States that have imposed sanctions on the Russian Federation or controlled by such States from voting at shareholder meetings. The decree applies to the companies under the certain conditions: (i) if a company's controlling shareholder or ultimate beneficial owner is sanctioned by a foreign State, and (ii) the shareholders from mentioned foreign States hold less than 50 per cent equity interest in the company, and (iii) the company's annual revenue exceeds 100 billion rubles. The decree is temporary and has an effect until 31 December 2023.

On 18 December 2023, the Presidential Decree No. 958 extended the application of the measure until 31 December 2024.

• Type:

  • Treatment and operation (Company laws and corporate governance)
  • Treatment and operation (Operational conditions , Other)

• Industry:

  • Manufacturing (Manufacture of coke and refined petroleum products, Manufacture of machinery and equipment n.e.c.)
  • Services (Wholesale and retail trade)

• Sources:

  • publication.pravo.ru, Указ Президента Российской Федерации от 18.12.2023 № 958 "О внесении изменений в некоторые указы Президента Российской Федерации", http://publication.pravo.gov.ru/document/0001202312180046?index=1, 18 Dec 2023
  • http://publication.pravo.gov.ru, Указ Президента Российской Федерации от 17.01.2023 № 16 "О временном порядке принятия решений органами некоторых российских хозяйственных обществ", http://publication.pravo.gov.ru/Document/View/0001202301170007, 17 Jan 2023
  • lexology.com, Update: New Decree Allows Certain Russian Companies to Remove Voting Rights of Minority Shareholders and Directors from Unfriendly States, https://www.lexology.com/library/detail.aspx?g=484e5250-42a9-4785-a37d-8e9ccd5d4b67&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2023-01-24&utm_term=, 20 Jan 2023