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. Last Updated: 07/27/2016

Melnichenko Vacates Chair at MDM Bank

Andrei Melnichenko, the country's youngest billionaire, has given up his post as board chairman of MDM Bank, the bank said Wednesday.

Melnichenko, a co-owner of the bank, has been replaced by Andrei Vernikov in a bid to improve corporate standards in the company.

Melnichenko will retain his seat on the board, which several newly elected independent directors will also join.

Melnichenko, 33, whose personal fortune is estimated at $1.6 billion, is the country's 27th-richest man, as well as its youngest billionaire, according to Forbes Russia. He jointly owns MDM, Russia's No. 5 lender by assets, with partner Sergei Popov.

"According to Western corporate governance standards, a bank's owner cannot also be its manager," said Ilya Razbash, senior vice-president at MDM Bank, explaining the rationale behind the company's management reshuffle.

Five out of nine new board members, including the chairman and the heads of board committees, are independent.

Melnichenko was unavailable to comment on the management changes.

At a news conference Wednesday, MDM's CEO Andrei Savelyev dismissed rumors that the company was getting ready for a sell-off.

"I can officially say that no negotiations -- with either Russian or foreign investors -- are taking place. We are working on increasing the bank's market capitalization and are restructuring its business. We are not looking for a strategic investor parallel to that," he said.

MDM is getting ready for an IPO, but the final decision will not be made in the coming 12 to 18 months, he added.