My “charges” are getting agitated:
Four Timid Ones Four major companies have complained to Deputy Prime Minister Igor Sechin about a government bill drafted at the president’s initiative. They are afraid of having to share information about themselves with minority shareholders and members of their boards of directors. Last week, the State Duma (the lower house of Russia’s parliament) passed on first reading a bill that would significantly expand minority shareholders’ rights to information about companies (amendments to the law on joint-stock companies and the securities market). Read the full article
Rosneft, Transneft, Surgutneftegas, and TGK-2 are writing to Sechin to oppose Medvedev’s bill on corporate disclosure. I won’t say anything about TGK-2—I’ve never dealt with them. But I’ve sued the first three many times, including over disclosure issues. Despite winning cases against Rosneft and Transneft, I still haven’t managed to obtain the documents from them. Surgutneftegas handed over documents without waiting for court, but in a laughably small volume. The “Medvedev” amendments would mean these crooks would have no chance of successfully defending in court their refusals to provide information, so off they ran to complain to Sechin. What’s interesting is that all three—Rosneft, Transneft, and Surgut—conduct their corrupt little schemes under Sechin’s “protection,” including with Gunvor. That is the Great Secret of Russia they are guarding. The absurdity and stupidity of their letter become completely obvious when you look at the point where they object to disclosing information not only to shareholders, but also to members of the company’s board of directors. If even a Rosneft board member, for example, has no right of access to Rosneft documents, then what is the point of having a board of directors or corporate governance at all? I’d like to remind the swindlers at Rosneft that they have an audit committee on their board with broad powers, but under Rosneft’s proposals, members of Rosneft’s board audit committee would not have full access to Rosneft documents. So what exactly would they be auditing, and how? The wife’s grocery shopping? How many leeks were bought, and how much mayonnaise? And of course the most outrageous part is the political side of the letter. The country’s president launches a reform of corporate governance in state-owned companies and, with much fanfare, puts forward proposals that all sorts of experts approve. Then companies owned by the state (Transneft is 100% state-owned, and the state holds 85% of Rosneft’s ordinary shares) ask for this reform to be scrapped by writing a letter to Deputy Prime Minister Sechin. So where does the President stand, and where does a deputy prime minister stand? And shouldn’t Khudainatov and Tokarev be kicked out for such insolence? It’s one thing when the opposition goes after Medvedev—that’s what an opposition does. But when he is publicly told to get lost by people hired by Rosimushchestvo (Russia’s Federal Agency for State Property Management), that’s really not a good look. And while I’m at it: here’s a link to an excellent article by Guriev and Tsyvinsky, Ratio economica: This Has to Be Earned They discuss technological breakthroughs (“Skolkovo” and the like) as a “magic recipe” for economic growth. Their conclusions are skeptical. The authors diplomatically write that a “technological leap” will not work without an overall improvement in the investment climate and reform of traditional institutions. Given the first part of this post, I would decode their message like this: it is pointless to spend so much effort on “Skolkovo” and nanotechnology when the mega-monsters of the traditional economy—Gazprom, Rosneft, Transneft, and so on—are packed with hellish thieves who do whatever they want; who spit on court rulings and presidential orders; and who have put the police, the FSB (Russia’s security service), the prosecutor’s office, and the Investigative Committee on retainer.