MOSCOW Russian internet firms Yandex, Mail.Ru and Vkontakte may be included in a list of the country's strategic assets, meaning they must obtain official permission before selling stakes to foreign investors, according to a draft law.
The initiative could dent the attractiveness of Russian web stocks which have so far been darlings of investors in part due to their perceived immunity to risks related to state control and corruption.
Five deputies from the State Duma, the lower house of parliament, have proposed expanding the list of strategic assets to internet companies, including search and mailing sites, with over 20 million monthly visitors over a six-month period, the draft law, published on the Duma's website, showed.
"This means the purchase of more than a 10 percent stake in such companies by a foreign investor would need state approval, as well as the placement of the shares on an international stock exchange," wrote Renaissance Capital analyst David Ferguson in a research note.
"The regulations would also affect transactions made by Russian investors completed through offshore vehicles. If passed, the legislation would be slightly negative for Yandex and Mail.Ru, in our view."
Mail.Ru, Yandex and Vkontakte declined to comment, saying only they were currently studying the draft law.
Shares in Mail.Ru Group were off 1.04 percent in London by 9:30 a.m. EDT, while Yandex's New-York listed stock opened 1.08 percent lower.
Bank of America Merrill Lynch said in a research note it expects the initiative "to add to negative sentiments" towards the Russian market, "as another indication of growing government influence in the economy".
"While from 2008 through May 2012 out of more than 140 transactions 94 percent have been approved by the regulator, we believe that the changes might have a potentially negative impact on the investment climate and internet companies' corporate governance," said Anastasia Obukhova at VTB Capital.
Yandex, known as the 'Russian Google', raised $1.4 billion in a blockbuster initial public offering on the U.S. Nasdaq exchange in May 2011, following an oversubscribed 2010 share sale by Mail.Ru Group in London.
Social network Vkontakte has just dropped plans to float following the flop of Facebook's recent initial public offering.
Renaissance's Ferguson said that while no specific deals were expected in the short term, Yandex shareholders such as private equity funds Baring Vostok and Tiger Global - which he says have 19 percent and 17 percent stakes respectively - would find any future exit more complicated as a result.
The Vedomosti newspaper also wrote on Thursday that Yandex may already be considered a strategic asset because it uses cryptography in its Yandex.Money service, a payments service similar to PayPal.
State-controlled lender Sberbank already owns a so-called golden share in Yandex.