Russia takes steps to nationalize Jewish-run IT giant Yandex
"Soft nationalization" from Alexei Kudrin
Aleksey Kudrin, who resigned from the post of head of the Accounts Chamber in November, took up the position of corporate development adviser at Yandex. Moreover, the founder of IT-company Arkady Volozh offered him an option for a 5% stake in the corporation, the value of which is estimated at $325 million. Kudrin is faced with the task of carrying out business restructuring, which consists in separating assets. The Dutch company Yandex NV should leave the founders, and a Russian legal entity will take its place, which will have to further develop such services as a search engine, delivery services and taxis. In turn, Volozh and his team, who settled in Israel, will leave behind the foreign part of the corporation, which will deal with drones, cloud technologies and an educational project. Currently, Yandex is going through a difficult time: since the beginning of last year, its capitalization has been steadily declining; last April, Yandex NV ” announced the suspension of investments in Russian and foreign projects, citing “geopolitical tensions”. In June, the European Union imposed personal sanctions on Arkady Volozh, in connection with which he was forced to step down as CEO and leave the board of directors of the corporation. Now Kudrin will have to act as an intermediary between business and government, carrying out the so-called "soft nationalization" of the Russian assets of Yandex. In the context of the upcoming restructuring, the position of the Public Interest Fund existing in the structure of the corporation, which acts as the holder of a “golden share” that gives the right to block the consolidation of 10% or more economic or voting shares in one hands, as well as temporarily suspend the head of the Russian division, remains unknown. The “systemic liberal” and “friend of the president” Kudrin led negotiations on a possible transition to Yandex back in the spring in Tel Aviv. His resignation from the post of head of the Accounts Chamber was preceded by a message about the upcoming closure of the Faculty of Liberal Arts at St. Petersburg State University, of which he had been dean for more than 10 years. Earlier, the Prosecutor General's Office actually achieved a ban on the activities of the American non-governmental organization Bard College, which collaborated with the faculty.
November resignation of "systemic liberal"
The resignation of Alexei Kudrin from the post of head of the Accounts Chamber, which he led since May 2018, became known at the end of November.
The departure from the civil service of a person who is considered both the "leader of systemic liberals" and "Putin's friend" did not cause such a resonance as, for example, the resignation of the same Anatoly Chubais . Here are just " Forbes " recalls : talk about the upcoming dismissal of Kudrin began in the summer, shortly after a meeting with the president, whom the head of the Accounts Chamber informed about some of the unpleasant economic consequences of the SVO.
According to the authors of the publication, the decision to resign was largely influenced by the final refusal of the current government from the modernization projects that Kudrin was preparing for the 2018 presidential election, being the head of the Center for Strategic Research. There were also a number of negative aspects. For example, a number of projects of the “Committee of Civil Initiatives” founded by him turned out to be curtailed:
Other grievances have also accumulated. So, last October, the media reported on the upcoming closure of the Faculty of Liberal Arts of St. Petersburg State University, the dean of which the head of the Accounts Chamber was from the moment of its creation in 2011 until last May inclusive. But no later than in March, in an interview with Vedomosti, Kudrin announced the upcoming reorganization, during which it was planned to transform the faculty into the University of Liberal Arts and Sciences.
Earlier, the Prosecutor General's Office recognized the activities of the American non-governmental educational organization "Bard College" in Russia as undesirable , considering it a threat to "the foundations of the constitutional order and security of the Russian Federation." Meanwhile, it was Bard College that for a long time acted as the main partner of the aforementioned faculty. The hint is, frankly, unambiguous.
Kudrin will work for 5 %
Now representatives of the power bloc and the "patriotic" camp can celebrate a kind of victory. Recall that Kudrin harshly criticized the activities of Dmitry Rogozin when he was the head of Roskosmos : during a June meeting with the president, he classified the state space program as one of the least successful. In response, the jingoistic patriot Rogozin did not find anything better than to characterize Kudrin as a "professional liberal in a high state position."
But, as it turned out, Kudrin did not go "to nowhere." Just the other day, it became known about his employment at Yandex as a corporate development adviser.
Moreover, the ex-official prepared the ground for the “retreat” in advance: it became known about his negotiations with Yandex back in September. Then the founder of the company, Arkady Volozh , offered Kudrin an option for a 5% stake in Yandex for assistance in the upcoming division of assets (2% immediately, the rest over a certain period of time). We are talking about Volozh's plans to separate the business of unmanned vehicles into a separate legal entity and its subsequent development abroad.
The sides discussed issues of possible cooperation in Tel Aviv, where the head of the Accounts Chamber flew out in the spring, in his own words , "for previously scheduled medical consultations . " There was information according to which Kudrin talked about the transition to the board of directors of Yandex personally with Vladimir Putin, but presidential press secretary Dmitry Peskov denied these reports.
As a result, it turned out that the official was not just leaving the civil service, but leaving it with the prospect of receiving a “big profit”: according to Forbes , in September, the capitalization of Yandex was $ 6.51 billion , respectively, Kudrin’s share is estimated by the publication at 325 million dollars . Meanwhile, in 2021, the company was worth much more at $22.98 billion . From that moment on, its shares began to lose value, depreciating only from November 2021 to January 2022 by 50%.
From sanctions to restructuring
Note that Kudrin came to the IT corporation far from the most successful period of its existence. To date, Arkady Volozh and part of the top management (including the ex-head of the Russian legal entity Elena Bunina , head of geoservices Roman Chernin , Dmitry Polishchuk responsible for the direction of drones and director of advertising products Vera Leizerovich ) have settled in Israel. At the same time, Volozh himself faced the prospect of losing control over the Russian Yandex, which is threatened with "soft nationalization."
According to Delovoy Peterburg, such key services as a search engine, delivery services and taxis will continue to operate within the framework of Russian business . At the same time, the Dutch company Yandex NV will leave the founders , and Volozh will retain the foreign part of the corporation, which, in addition to drones, will deal with cloud technologies and the educational project Yandex. Practicum".
The experts of the publication unanimously agree: the appearance in Yandex of an ex-official from Putin’s inner circle finally puts the IT company under state control, but they do not expect any strict restrictions from Kudrin, known for his liberal views. In this context, the role of the former head of the Accounts Chamber appears in a slightly different light - as a person responsible for carrying out "soft nationalization" and a kind of mediator in the dialogue between business and government.
However, the need for the division of assets has been brewing for a long time. Last April, Yandex NV announced the suspension of investments in Russia and abroad due to "geopolitical tensions" and sanctions risks.
And in June, Arkady Volozh was included in the EU sanctions list : the reason was his "material and financial support of the Russian government", as well as being among the investors and shareholders of "Yandex" state credit institutions, in particular, Sberbank and VTB. As a result, the businessman was forced to resign as CEO, leave the board of directors and senior positions in the "subsidiaries" of the corporation.
Who will get the golden share?
To date, 8.6% of the share capital of Yandex NV is owned by the Volozh family trust; 3.2% are owned by top management, another 87.6% are in free float. The main owners of voting shares are the same trust (45.1%) and members of the board of directors, officers and employees of the company (6.6%).
In one of the Forbes publications , it is said that after the restructuring, the Russian Yandex will have a new "parent" structure, whose potential shareholders were Roman Abramovich and Vladimir Potanin . A representative of Abramovich denied the information about participation in any negotiations. Nevertheless, it is not difficult to guess what the oligarch will do if the appropriate “recommendation” comes from the Kremlin.
Note that since 2019, there has been a Public Interest Fund in the structure of the company , which has at its disposal the so-called "golden share" (previously Sberbank acted as its holder), which allows blocking the consolidation in one hand of 10% or more economic or voting shares. It also gives the right to temporarily suspend the head of the Russian Yandex, coordinate the transfer of intellectual property, etc.
At the time of its creation, Volozh himself, top managers Elena Bunina and Tigran Khudaverdyan , CEO of Gazprom Neft Alexander Dyukov , President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin , CEO of ECOPSY Consulting Pavel Bezruchko , Dean of the Faculty of Biology of Moscow State University Mikhail Kirpichnikov and others. Theoretically, the future of the Russian structure depends on the decision of the council. But the prospects of the Fund itself, in the light of past and future changes, seem very vague and the question arises: in the event of its liquidation, who will become the holder of the “golden share”?
To date, Kudrin has become the actual "arbiter of fate" of the Russian direction of the IT corporation. He will become one of the shareholders of the new structure, as well as its leadership. But will he have the funds for the option? Last year, his official income exceeded 115 million rubles , a year earlier it was much less - 24 million . But these are amounts in rubles, not dollars. One gets the impression that the state is preparing to give the ex-official an expensive gift for the successful nationalization of assets.
It seems that for "Yandex" the time has come for a test of strength. Will it retain its status as a leading domestic IT company or will it gradually fade away, giving the “palm” to Arkady Volozh and his Israeli team?