NDC’s General Meeting Elects New Board of Directors

MOSCOW - The National Depository Center (NDC), Russia’s only settlement depository servicing the full range of Russian securities, has announced that on 19 July 2007 a general meeting of NDC members was held. The meeting voted in a new Board of Directors which includes the following members:

Vladislav Zimin, Economic Advisor in the Department for Control over Financial Markets, Russia’s Central Bank, has been elected a member of NDC’s Audit Commission.

Sergei Lykov, new Chairman of the Board of Directors, NDC, said of his new post: “I completely support NDC’s course for improvement of the corporate governance system and formation of Russia’s central settlement and depository facility on the basis of NDC. I intend to make every effort in order to bring NDC’s corporate governance system in line with the best international corporate governance practice. Introducing an independent director into the NDC’s Board was an important decision. It will allow the provision of an impartial evaluation of the company’s operations and a new vision of NDC’s development with regard to corporate governance and successful implementation of its strategic plans.”

Alexander Potemkin, President, MICEX, pointed out: “Election of NDC’s new Board of Directors headed by Sergei Lykov, member of the Managing Board, Vnesheconombank, is a principal step on the path to improvement of corporate governance at NDC, which is an important part of the MICEX Group. Sergei Lykov is known in the Russian financial market as one of the most competent specialists. I am sure that the new Board headed by the new Chairman, representing interests not only of NDC’s major clients and MICEX founders but also of minority shareholders (namely leading Russian and foreign banks), will accomplish the tasks of global development. This will allow NDC to strengthen its position as the most important infrastructure element in Russia’s financial market.”

The general meeting of NDC members considered a plan of actions aimed at improvement of the company’s corporate governance system, and an update on progress of NDC’s reorganization from not-for-profit partnership into a joint stock company. Nikolai Egorov, Director, NDC, said: “NDC in its development has reached the stage where it needs to have a new legal status in order to achieve new strategic goals. On behalf of NDC, LeBoef, Lamb, Green & MacRae LLP conducted legal research of NDC’s reorganization conditions from not-for-profit partnership into a joint stock company. The firm presented the conclusion that the reorganization is possible only after some changes in Russian legislation is made. At the moment, there are no legal grounds for a reorganization of a not-for-profit partnership (excluding a stock exchange) into a joint stock company. NDC management is to begin discussing with authorities the possibility of making appropriate amendments to the Federal Law “About the Stock Market” and to other acts. The plan of actions aimed at improvement of the company’s corporate governance system approved at the meeting includes two groups of actions. The timing for some of these actions does not depend on completion of NDC’s reorganization: among such actions are the formation of a Committee for Strategy and Investment Policy and a Committee for Remuneration, development of principles for the selection and replacement of members of NDC’s deliberative bodies and certain other steps. Preparation of changes to NDC’s charter and Code of Corporate Conduct will be implemented after a decision on reorganization is made. NDC management has brought to the Board of Directors’ and the general meeting’s notice NDC’s opinion regarding its interaction with CJSC Depositary Clearing Company (DCC). We are entrusted with the task of informing the shareholders of RTS OJSC of NDC’s opinion as a minority shareholder in DCC and inform Russia’s Federal Service for Financial Markets of this situation.”

NDC’s members also decided:

•         to pay fees in accordance with NDC’s Regulations on Fees and Remuneration for Members of the Board of Directors and Members of Audit Commission.

•         to approve new wording of the Regulations on Management of Temporarily Spare Funds.

•         to take into consideration information about results of an operational audit held by Deloitte & Touche.

•         to approve proposed changes in NDC’s budget for 2007 and to approve the budget for 2007 with the suggested wording.

•         to take into consideration information about the budget for Modernization of NDC’s Technical Platform for 2007.

Biographies:

Sergei Lykov, Member of the Managing Board, Vnesheconombank

Sergei Lykov graduated from the Moscow Financial Institute in 1975. In 1975-1991 he worked for Russia’s Central Bank in various posts, from Economist to Chief of the Main Foreign Currency Economic Directorate. In 1991-1994 he worked for North-European Financial Company CJSC (later Eurofinans) as First Deputy General Director and First Deputy Chairman of the Managing Board. In 1994-1996 he joined Mosbusinessbank as Vice President, Director of Foreign Exchange Operations and International Settlements Department. In 1996-2005 he worked for Eurofinans-Mosnarbank as a Member of the Managing Board and Senior Vice President. In 2005-2007 he was elected Deputy Chairman of the Managing Board, Vnesheconombank. Since 1994 he has been Deputy Chairman of the Managing Board of a number of companies including MICEX, Eurofinans-Mosnarbank, Kraslesinvest, Roseximbank, Malev, and the Corporation for Krasnoyarsk Region Development. In 1997-2003 he was a member of the Council of NDC.

Alexander Ikonnikov, Partner, Board Solutions; Independent Director; Head of Audit Committee, Baltika OJSC

Alexander Ikonnikov holds a PhD in Economics, and graduated from the Moscow Oil and Gas Institute. In 1997-1998 he worked for Russia’s Ministry of Fuel and Energy as a Head of External Economic Relations and Investment Attraction Department. He was responsible for intergovernmental agreements in the energy sector and relations with international financial organizations (Moscow Bank of Reconstruction and Development, EBRD, EximBank). In 1998 he was invited to join the National Association of Stock Market Participants (NAUFOR) as Deputy Chairman of the Managing Board. His task was to prepare a program for the protection of investors’ rights. He is a founder of the Association for Protection of Investors’ Rights. In 2002 he took part in the foundation of the Association of Independent Directors and took the post of Chairman of its Supervisory Council. 

About NDC

 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, .