MOSCOW - The National Depository Center (NDC), Russia's only settlement depository servicing the full range of Russian securities, issued a statement today with regard to the July 13 meeting of the Board of Directors of Depository Clearing Center CJSC (DCC) attended by all NDC representatives on the Board. The agenda of the meeting included an item on the need to call an extraordinary general meeting (EGM) of DCC shareholders to vote on an additional share issue. NDC regrets that a detailed discussion of the additional share issue (number of additional shares, method of placement, placement price, form of payment for additional shares etc) did not take place at the meeting despite requirements under the Federal Law “About Joint Stock Companies” and DCC’s Charter which provide for Board approval of significant issues related to any increase in charter capital before a vote at an extraordinary meeting of shareholders.
Nikolai Egorov, Director, NDC, said: “DCC’s Board of Directors should consider the matter of increasing the charter capital, and should propose to shareholders that this issue be placed on the agenda. The Board also should prepare for the EGM a proposal on all significant provisions relating to an additional share issue necessary for voting. The issue of a charter capital increase was not included into the agenda of the Board meeting held 6 July. Moreover the investment plan presented by DCC revealed that, as a DCC shareholder, NDC could face a problem of insufficient returns on its investments. We also expect that the Charter will incorporate changes in DCC’s budget, tariffs and strategy in accordance with corporate governance standards.”
Considering the fact that the legal requirements for joint stock companies were breached, five members of the Board of Directors voted against calling an extraordinary meeting of DCC shareholders for 8 August, 2007.
NDC pointed out that on 6 July the Company published its position regarding DCC’s proposed additional share issue. The NDC position favored a preliminary discussion of this issue between DCC shareholders and NDC partners in the context of consolidation and the future configuration of the settlement depository structure created on the basis of NDC and DCC.
1. In accordance with the paragraph 3 Clause 49 of the Law “About Joint Stock Companies” and also with paragraph 11.3 of DCC’s Charter, any decision on an increase in charter capital must be made by a general meeting of shareholders only at the Board of Directors’ suggestion.
2. Paragraph 30.6 of DCC’s Charter says that a decision putting such a matter to a vote by shareholders must by supported by three-quarters of the Members of the Board.
Not-for-Profit Partnership “The National Depository Center” is the largest settlement depository in Russia, servicing the full range of equity securities of Russian issuers. It services 100% of transactions conducted in the federal bond market of the Bank of Russia, 95% conducted in the corporate and regional bond markets, and 90% of stock exchange share transactions. NDC provides storage of global certificates and depository accounting for 99% of corporate bond issues, and 95% sub-federal and municipal bond issues. The international rating agency Thomas Murray has assigned NDC an A+ rating as a central depository. In 2006 the value of assets in storage was RUR 3.3 billion, turnover was RUR 30.7 billion, and the total number of operations 1.9 million. NDC is the largest paying agent on behalf of corporate bond issuers. It is Russia's national numerating agency, authorized to assign the international ISIN and CFI indexes. It is also a member of the international accounting infrastructure, providing settlements on the global financial markets using a direct account at Clearstream Banking S.A.
Among NDC’s founders are Bank of Russia and MICEX CJSC. Members include Bank of Russia, MICEX CJSC, OJSC Bank of Moscow, Sberbank, International Moscow Bank, JP Morgan Bank International LLC, Vneshtorgbank OJSC, Bank Rossiysky Credit OJSC, Evrofinans Mosnarbank OJSC, Rosbank, Gazprombank CJSC, ING Bank Eurasia CJSC and Deutsche Bank LLC. Recently Vneshekonombank was approved as a new member. The Partnership also has a stake in CJSC Depositary Clearing Company (36.96 %) and in CJSC Settlement Depository Company (29%).
For further information about NDC: www.ndc.ru, or NDC press service: +7 495 232 0910, .