The Moscow Region Arbitration Court has ruled in favor of the Ministry of Industry and Trade in its case against X5 Retail Group N.V. from the Netherlands, suspending corporate rights in its Russian subsidiary, LLC “Corporate Center X5″. According to reports from ”Interfax” citing the retailer’s press service, the court decision has not been made public yet, leaving the details undisclosed.
Following the Ministry’s claim, the court has transferred the shares of X5 Retail Group N.V.’s Russian subsidiary to Russian shareholders and ultimate owners of GDR X5. This move requires them to receive shares in LLC “Corporate Center X5” in proportion to their stake in the Dutch company. Non-Russian shareholders are also eligible for this, but will only receive dividends in type C accounts.
Previously, LLC “Corporate Center X5” was classified as an economically significant organization (ESO) by Russian authorities, allowing for the potential expropriation of shares held by foreign entities. X5 Retail Group N.V. operates popular retail chains like “Pyaterochka”, “Perekrestok”, and “Chizhik” across Russia, establishing itself as a major player in the country’s grocery retail sector with over 21,000 stores in 67 regions.
The primary shareholder of LLC “Corporate Center X5” is “Alfa-Group” CTF Holdings S.A. with a 47.86% stake, while Axon Trust held 11.43% of the shares as of April 2023.
This marks the third “Alfa-Group” entity to be subject to foreign control removal, following similar actions taken against Alfa-Bank and Alfastrakhovanie. The impact of foreign ownership under current sanctions has disrupted corporate governance and dividend distributions for Russian companies, as highlighted by The Bell.
Article from theins.ru