Russia’s search giant and main news aggregator Yandex has announced that it would corporate in a restructuring that will allow the Kremlin’s newly created Public Interest Fund (UIF) to take control of key decisions of the company, including suspending management temporarily, blocking the company’s potential acquisition, and the appointment of two permanent members of the board of directors.
The change will allow the newly created governing body, which includes Russian universities and non-governmental organisations that have close ties to the government bodies to hold the “golden share” of the company, which is owned by state-run lender Sberbank.
The Fund will have the right to veto company decisions on issues such as the transfer of personal data of Russian users or significant intellectual property. At the same time, the Fund will not be able to influence other issues of Yandex’s operational, strategic, and economic activities.
The management board of the fund will consist of only three members of the Yandex management team, including the founder and executive director of the company Arkady Volozh, as well as representatives of leading universities and non-governmental organisations.
In an email to employees, Volozh assured that the company will retain control over its daily activities, but stated that it should take into account the social significance of its products – from maps and traffic data to food and car delivery, adding, “public interest is now passing through us.”
Yandex’s announcement came after Russian lawmaker Anton Gorelkin proposed restricting the foreign ownership of leading Internet companies to tighten the Kremlin’s control over the Internet. The draft law, submitted to the State Duma, Russia’s lower house of parliament, in late July proposes limiting foreign ownership in internet firms to 20% if they are considered by a special commission to be a “significant source of information”.
Experts agree that one of the reasons Yandex decided to make changes to the management structure is related to Gorelkin’s bill to limit the share of foreigners in large tech companies. A few hours after Yandex announced a change in the management structure, Gorelkin announced that he would withdraw the bill to complete it.
The Kremlin proposed restructuring will be put to a vote by shareholders on December 20.