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Russia YUKOS shrholders in surprise stake revelation
By Dmitry Zhdannikov
MOSCOW, June 19 (Reuters) - Major shareholders in Russia's second-largest oil firm YUKOS (YUKO.RTS) revealed themselves and their multibillion rouble fortunes on Wednesday, an unprecedented act of transparency in Russia's corporate history.
Analysts praised the move by YUKOS, which is seeking a listing in the United States, and said it would help improve transparency in Russia's notoriously opaque business sector by forcing rivals to follow suit.
Russia, the world's second-largest oil exporter after Saudi Arabia, needs huge foreign investment to unlock its vast economic potential, say economists. But that implies corporate governance standards all investors can trust and which, over time, will help better integrate Russia into the global economy.
Analysts said the information disclosed on Wednesday indicated that YUKOS Chief Executive Officer Mikhail Khodorkovsky controls 36 percent of the company, whose market capitalisation currently stands at more than $20 billion.
"This is the single largest revelation of personal wealth in Russia. Based on YUKOS market capitalisation this 36 percent stake could be valued at 7.2 billion dollars," Steven Dashevsky from Aton Brokerage said.
The information was issued on Wednesday by the Menatep Group, which owns 100 percent of YUKOS Universal Ltd, which in turn controls 61 percent of YUKOS's shares.
Menatep said in a statement Khodorkovsky controls 9.5 percent of Menatep and another 50 percent of Menatep through a special trust arrangement, of which he is the sole beneficiary.
"It clearly shows that Khodorkosvky de facto controls those shares," said Dashevsky.
Menatep also said YUKOS Vice Presidents Mikhail Brudno and Vassily Shakhnovsky each controlled seven percent in Menatep.
Vladimir Doubov, a member of the State Duma lower house of the parliament, and Leonid Nevzlin, a member of the Federation Council, the upper chamber, control seven percent and eight percent respectively. Both are former YUKOS executives.
Platon Lebedev, the head of Menatep Group, also owns seven percent in Menatep, while the remaining 4.5 percent belongs to other shareholders, Menatep said.
YUKOS, one of Russia's fastest-growing oil firms, plans to boost its oil output by 20 percent this year to 1.4 million barrels per day.
Over 20 percent of YUKOS's shares are free floated, while another 10 percent belong to the firm's Veteran Petroleum Trust.
TREND TOWARDS OPENNESS?
Valery Nesterov from Troika Dialog brokerage said that many other Russian firms had also promised to reveal their core shareholders, but YUKOS was the first to keep its promise.
"Western investors will of course enjoy this move, which could push companies such as Sibneft or LUKOIL to follow YUKOS's example," he said. "The disclosure could become a fundamental factor behind another YUKOS rally when the summer stocks stagnation ends," he added.
Analysts also pointed out that the YUKOS announcement could be linked to moves by the U.S. authorities to tighten rules for obtaining a U.S. stock exchange listing, due to heightened sensitivity over transparency in the wake of the Enron scandal.
Since winning office two years ago President Vladimir Putin has sought to make tax and legal structures more pro-business, cutting tax rates and pushing banking and other structural reforms as Russia pushes to join the World Trade Organisation.
In March, Russia' top financial market watchdog unveiled a corporate code of conduct designed to nudge Russian companies into making themselves accountable to their shareholders in Russian courts, which are themselves being overhauled.
The adoption of international accounting standards, regular payment of dividends and protection of minority shareholder rights are also key to persuading investors Russia is creating a law-abiding market economy that protects foreign capital.
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