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. Last Updated: 07/27/2016

Svyazinvest Stakeholders Seek Rights

Sistema wants minority shareholders rights extended in Svyazinvest, the national fixed-line phone operator in which it owns a blocking stake, Vedomosti reported Tuesday.

In a proposal submitted to the Economic Development and Trade Ministry, Sistema called for amendments to Svyazinvest's charter to empower minority stakeholders in corporate governance, the paper said, citing Sistema Telecom CEO Sergei Shchebetov.

Sistema also called for the Svyazinvest board to decide the budget, capital expenditure and merger and acquisition activities of Svyazinvest's seven regional subsidiaries.

Sistema also wants the subsidiaries to report their quarterly financial results under U.S. generally accepted accounting principles, Vedomosti said.

Sistema has been pushing for changes to Svyazinvest's charter since Comstar, part of Sistema holding, bought the stake of 25 percent plus one share in Svyazinvest from Leonid Blavatnik and Viktor Vekselberg in December.

Last month, Sistema Telecom and the Investor Protection Association entered into a cooperation agreement for the "implementation of joint projects in the interests of minority shareholders of interregional telecommunications companies of Svyazinvest," a Sistema spokeswoman said Tuesday.

"Our firm made it clear from the start that we were buying not just a 25 percent blocking stake in Svyazinvest, but also rights to operational leadership in the company," said the spokeswoman. "It is not a normal situation to be divested of your rights as a legitimate stakeholder in a company just because of the observance of some bureaucratic norms."