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. Last Updated: 07/27/2016

46 Stand for Election to UES Board

Portfolio investors have nominated 31 people to the 15-seat board of directors at Unified Energy System, the national electricity company, the investors said Monday.

Two were nominated by foreign equity funds.

The fight for board seats is expected to be tough this year, with shareholders jockeying for influence over a massive restructuring. The government, which owns 53 percent of the utility, has also put up 15 candidates.

Adding to the annual intrigue over board nominations are a group of Russian industrial giants who are believed to have bought a joint stake of 15 percent over the past six months.

One of the buyers, MDM Group, which has interests ranging from banking to metals and coal, has said it would put up two candidates.

Monday was the deadline for nominations. The annual meeting, where the next board of directors will be elected, is due at the end of May.

A group of portfolio investors with 3.4 percent of the company's shares have nominated a current board member, Alexander Branis of Prosperity Capital Management, and Vadim Kleiner of Hermitage Capital Management, to run for the board.

National Reserve Bank, a private Russian bank that has about 4 percent, has put up 12 candidates, but a bank spokesman declined to name them. Alexander Lebedev, the chairman of the bank, has a seat now but has said he will not run again.

Minority investors are keen to hold seats on the board of UES, whose shares are among the most liquid on the Russian stock market and continue to be widely held despite a massive sell-off by foreign investors last year.

UES's power generators will be spun off in the coming years as part of a government plan to dismantle the state monopoly and launch a competitive electricity market.

The board controls the internal restructuring at UES and has authority over asset transfers, so minority investors use board seats to lobby against transactions that could damage the value of their holdings.