MOSCOW, May 24. /TASS/. The State Duma, lower house of the Russian parliament, has adopted the bill "on external administration on governing an organization" in the first reading on Tuesday. The document provides for introduction of external administration for foreign companies, that announced their withdrawal from the Russian market.
The bill concerns those companies that have decided to leave the country without obvious economic reasons, "based on anti-Russian sentiment in Europe and the United States, while their activities significantly affected the stability of the economy (for example, if they were the only suppliers of critical industries, produced essential goods or were city-forming)".
The decision on such companies will be made by the interdepartmental commission under the Economic Development Ministry following the proposals of other ministries and heads of regions. It will require a court decision to transfer of management from foreign owners to external management. Foreign owners will have the opportunity to resume work in Russia or sell their stakes.
The VEB.RF state corporation or another agency may be appointed as the external administration of a company that has announced its withdrawal from the Russian market.
"The state development corporation VEB.RF or another organization proposed by the interdepartmental commission and agreed with the head of the constituent entity of the Russian Federation in which the organization is registered or operates can be appointed by the court as an external administration," the explanatory note to the bill says.
By decision of the interdepartmental commission, an application may be sent to the court to replace the designated organization with another one if there are grounds established by the Russian government. In addition, expenses incurred by the external administration and its remuneration are reimbursed at the expense of the organization. The list and limits of such expenses and remunerations are determined by the Cabinet, the bill says.
The bill suggests that external administration will be appointed for up to 18 months. Its powers may be prematurely terminated upon the request of shareholders owning more than 50% of shares to eliminate the circumstances that served as the basis for the appointment of an external administration. The powers of the external administration may also be terminated upon transition to the liquidation of the company or initiation of bankruptcy proceedings. Interruptions in the supply of consumers and disruption of critical supply chains, an increase in consumer costs, job cuts, as well as actions or inactions that will lead to man-made disasters or loss of life can be regarded as grounds for appointing an external administration for foreign companies.
Position of the Economic Development Ministry
The Economic Development Ministry said that the lawmakers managed to come up with a balanced draft law on external management. The ministry emphasized that if adopted, the law would be applied pointwise, only in critical situations, when hundreds and thousands of people working at enterprises that left Russia could be under the threat of dismissal.
"The point is to "pick up" companies for temporary management, only in those cases when it is really necessary, to preserve industries and jobs that are important for the economy," an official with the ministry’s press service explained to TASS.
The ministry also recalled that the regions will have the opportunity to apply to the interdepartmental commission under the Economic Development Ministry to make a decision on sending an application to the court for the appointment of an external administration.