Russia's Yandex gets green light from Putin over new governance structure

MOSCOW (Reuters) - Russian internet giant Yandex was given the green light to pursue planned changes to its governance structure, after President Vladimir Putin signed a law late on Tuesday concerning the management of Russian offshore companies.

FILE PHOTO: The logo of Russian internet group Yandex is pictured at the company's headquarter in Moscow, Russia October 4, 2018. REUTERS/Shamil Zhumatov

Yandex, which provides a raft of online services including taxi-hailing and the main Russian-language search engine, proposed a corporate governance revamp last week to assuage Kremlin fears over potential foreign influence.

The new structure will include a public interest foundation (PIF) run by a board of 11 Russian nationals with the power to block a single entity accumulating a 10% or more stake in Yandex, either in terms of ownership or voting rights.

That is down from the current threshold of 25%.

The company’s ownership structure had been brought into the spotlight by a draft law to limit foreign shareholdings in Russian internet firms to just under 50%.

Three U.S. funds are among Yandex’s shareholders.

After Yandex’s announcement, Anton Gorelkin, the pro-Kremlin lawmaker behind the proposed foreign ownership legislation, said he would withdraw his bill and rework it.

Yandex said earlier this month its PIF will be incorporated in Russia’s western exclave of Kaliningrad, a special economic zone with favourable tax conditions.

The decision is subject to shareholder approval at a meeting on Dec. 20.

Special administrative regions were set up in the summer of 2018 in Kaliningrad and in the Russian far east to support Russian companies subjected to sanctions, giving them tax and currency regulation benefits.

The new law, which came into force on Tuesday, allows foundations that manage companies to be transferred to these administrative regions. Yandex is not subject to any sanctions.

Putin said separately on Tuesday he has met Yandex shareholders, the RIA new agency reported, but provided no further details.

Yandex declined to comment.

Reporting by Nadezhda Tsydenova; Writing by Alexander Marrow; Editing by Katya Golubkova and Jan Harvey