CEO of Russia's VK resigns as state assumes control of internet firm

VK

03/12/2021 15:47

By Alexander Marrow
    MOSCOW, Dec 3 (Reuters) - Boris Dobrodeev on Friday said he
was stepping down as CEO of Russian internet company VK
 MAILRq.L , amid a significant overhaul of the firm's
shareholder structure that has seen state-owned entities assume
control. 
    State consolidation of decision-making power at Russia's
second-largest internet firm, which runs the country's most
popular social network VKontakte, Russia's answer to Facebook,
could presage greater interference in the sector by the
government, an internet analyst said.
    Moscow has clamped down on technology companies this year
with fines related to banned content and Russians' user data, in
particular foreign social media firms, a campaign critics
characterise as an attempt by the Russian authorities to exert
tighter control over the internet.  urn:newsml:reuters.com:*:nL1N2SE12R
    
    VOTING SHAKE-UP
    VK said it had been notified of the planned changes in the
shareholder structure of MF Technologies, which holds a 4.8%
stake in the company, but controls 57.3% of its voting rights.
    On Thursday, Russian billionaire Alisher Usmanov's holding
company USM said it had sold 45% of the 54% MF Technologies
stake under its control to state-run insurer Sogaz, which is
part-owned by a longtime ally of President Vladimir Putin.
 urn:newsml:reuters.com:*:nL8N2SN3DL
    Shareholders in Sogaz, which was founded by gas giant
Gazprom  GAZP.MM , include banker Yuri Kovalchuk, whom Putin has
publicly called a personal friend. Gazprom CEO Alexei Miller is
board chairman at Sogaz. 
    As of Oct. 27, Kovalchuk and his wife controlled around half
of the shares in the Aquila firm which holds 32.3% of Sogaz, and
Gazprom and its companies have another 23.7%. 
    A USM representative told Reuters a deal with Gazprombank
over its remaining 9% stake in MF Technologies was ongoing.
Gazprom owns just under 50% of Gazprombank.
    On Friday, Gazprom Media said Gazprombank  GZPRI.MM  had
transferred it a 45% stake in MF Technologies. Previously,
Gazprombank held a 36% stake acquired from Sberbank in November.
 urn:newsml:reuters.com:*:nL8N2SO1JY
    Gazprom on Friday declined to comment when asked about its
plans for VK. 
    
    RISKS & UNCERTAINTY
    Internet analyst Pavel Klimarev wrote on his Telegram
channel, ZaTelekom, that the changes would give Gazprom Media,
and consequently the Russian state, more control over the media
landscape. 
    He predicted that more pressure would be exerted on Russia's
independent internet companies, such as Yandex  YNDX.O , as well
as on the likes of Alphabet Inc.'s  GOOGL.O  YouTube. 
    The RBC daily reported, citing four sources, that Vladimir
Kiriyenko, first vice president at state-owned Rostelecom
 RTKM.MM  and son of Putin's first deputy chief of staff Sergei
Kiriyenko, was set to become VK's new CEO.
    Rostelecom declined to comment on the report.
    London-listed shares in VK jumped on Thursday's news but
were 8% lower on Friday by 1530 GMT. 
    "The change significantly increases risks for VK -
uncertainty over the strategy, management," said Maria
Sukhanova, TMT analyst at BCS Global Markets.
    

 (Reporting by Alexander Marrow; additional reporting by
Vladimir Soldatkin and Gleb Stolyarov; Editing by Kirsten
Donovan)
 ((alexander.marrow@thomsonreuters.com;))