Yandex is a Russian company
The hand of the Russian state is now watching over Yandex
In order to save even bigger trouble with the Kremlin, Russia's leading IT company Yandex will in future be supervised by a foundation of public interest. That's not a good sign.
The Russian state has no confidence in the prudence of private companies. This is nothing new. 15 to 20 years ago he had different industries in mind than today and the methods he used to assert his interests were rougher. The then most successful and largest private oil company Yukos was broken up and indirectly nationalized because its boss Mikhail Khodorkovsky had become too arbitrary for the Kremlin in the country's most important economic sector. Today, as elsewhere, the focus is on the future of digital technologies and the control of their data and influence. The Russian internet is under increasing pressure. Instead of nationalization, this is now called “safeguarding public interests”.
A maximum of 20% for foreigners
Yandex, Russia's best-known and largest IT company with a reputation far beyond the country, has been feeling this pressure particularly hard for months. A legislative initiative by Duma deputy Anton Gorelkin, according to which foreigners may own a maximum of 20% of Russian Internet companies, was clearly directed against Yandex. The company is mainly owned by its founder Arkadi Wolosch and a wide range of shareholders, mainly foreign shareholders because of the listing on the New York technology exchange Nasdaq. A solution that has apparently been negotiated with the state should now prevent Yandex from getting even worse - Gorelkin promptly announced that he would revise his legislative proposal.
In the future, a foundation of public interest will have a right of veto on crucial issues. Delegates from several Russian universities sit on the Board of Trustees, as well as representatives from three organizations and management. In future, the foundation will have a “golden share”, a veto right on share sales of 10% and more. She is also sending two additional members to the board of directors of the Dutch parent company Yandex N.V. One of them takes a seat on a sub-committee to safeguard the “public interest”.
In everything that affects the national security of Russia - intellectual property, personal data, servers - nothing goes without its consent. And in extreme cases, the foundation may even remove the head of the Russian Yandex company by bypassing the board of directors. Finally, Volosch hands over his block of shares in a family trust. This is to prevent his shares from falling into foreign hands in the event of Volosch's death.
What the regulation hides
The construct would actually be completely superfluous for a privately held company. The security of the data of a company that offers a large number of integrated IT services, from the search service and taxi service to the delivery of food to financial issues, is central. The Kremlin's fixation that this treasure must remain in local hands has now dominated regulation. It ignores two central points: In today's Russia, control of the state always means control by the secret services, who understand data security as something completely different from consumers. And technical and entrepreneurial innovation benefits from a free environment. The Yandex model could catch on. That would be a bad sign for the investment location.
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