- What happened?
- Letter of Central bank regarding general meeting of shareholders (stockholders) holding in 2020
- Information message of the Central Bank on the deadline for disclosure of the list of affiliates and annual accounting (financial) statements by joint-stock companies
- Actual consequences of the taken measures and recommendations
1. What happened?
On April 02, 2020 President of the Russian Federation Vladimir Putin signed Decree No. 239 dated April 02, 2020 “On measures to ensure the sanitary and epidemiological welfare of the population in the territory of the Russian Federation in connection with the spread of a new coronavirus infection (COVID-19)”[1] (hereinafter – the “Decree as of April 02, 2020”). The Decree as of April 02, 2020 was issued to ensure sanitary-epidemiological welfare of population in the territory of the Russian Federation in connection with the spread of novel coronavirus infection (COVID-19) and as a continuation of Decree of the President of the Russian Federation as of March 25, 2020 No. 206 “On the non-working days declaration in the Russian Federation” based on the results of the address to the nation dated March 25, 2020.
This Decree as of April 02, 2020 establishes non-working days from April 04, 2020 to April 30, 2020 inclusive.
Subsequently, the Central Bank of the Russian Federation (hereinafter – the “Central Bank”) issued a number of informative letters in connection with the establishment of non-working days from April 04, 2020 to April 30, 2020 providing implications for joint-stock companies in the part concerning:
· method of general meeting of shareholders holding in 2020;
· deadline for disclosure by joint-stock companies of the list of affiliates for the first quarter of 2020 and the annual accounting (financial) statements for 2019.
2. Letter of Central bank regarding general meeting of shareholders (stockholders) holding in 2020
The Central Bank published an information letter dated April 03, 2020 No. ИН-06-28/48 “On general meetings of shareholders holding in 2020”[2], according to which, based on the sanitary and epidemiological situation, in order to take measures to ensure the non-proliferation of coronavirus infection, it recommends:
· joint-stock companies to hold general meetings of shareholders in absentia (by voting ballot);
· shareholders (stockholders) who have the right to vote should refrain from attending in-person meetings of shareholders.
Moreover, the decision to change the form of the annual general meeting of shareholders shall be made by the same corporate body as the original decision on convening of the annual general meeting (the Board of Directors or in its absence, the Executive body pursuant to art. 65 of Federal law dated December 26, 2020 No. 208-FZ “On joint stock companies” (hereinafter – the “JSC Law”), and the shareholders shall be notified immediately about the change of form of the annual general meeting in the same manner in which notice was given of the meeting and other available methods (para. 1.2 art. 52 of the JSC Law).
Furthermore, the Central Bank reminds that, since March 18, 2020 general meetings of shareholders (including annual one) in 2020 according to the decision of the board of directors supervisory Board) of the joint stock company can be held in form of absentee voting in connection with the adoption of Federal law from March 18, 2020 No. 50-FZ “On acquisition by the Government of the Russian Federation from the Central Bank of the Russian Federation ordinary shares of public joint stock company “Sberbank of Russia” and on recognition as invalid separate provisions of legislative acts of the Russian Federation” (hereinafter – “FZ No. 50”).
At the same time, the agenda of such general meeting may include issues specified in para. 2 art. 50 of the JSC law:
· election of the board of directors (supervisory board) of the joint-stock company,
· election of the audit commission of the joint-stock company,
· approval of the annual report and annual accounting (financial) statements of the joint-stock company (if the company’s charter does not refer to the competence of the board of directors (supervisory board) of the joint-stock company).
It should be noted that this exception, introduced by FZ No. 50, applies only to meetings held in 2020. Previously, general meetings of shareholders on the above-mentioned issues could not be held in the form of absentee voting.
3. Information message of the Central Bank on the deadline for disclosure of the list of affiliates and annual accounting (financial) statements by joint-stock companies
Central Bank published an information note April 03, 2020 “On the deadline on the disclosure of joint stock companies of the list of affiliates for the first quarter of 2020 and the annual accounting (financial) statements for 2019”[3], according to which, on the basis of para. 1 of the Decree as of April 02, 2020 in connection with the establishment of non-working days from April 04, 2020 to April 30, 2020 inclusive, the Central Bank informs about the dates of mandatory information disclosure by securities issuers.
1) joint-stock companies (securities issuers) shall disclose the list of affiliates for the first quarter of 2020 no later than May 07, 2020. As a general rule, joint-stock company is required to disclose the list of affiliates for the first quarter of the year no later than within 2 business days from the end of the reporting quarter – March 31 (para. 73.3 Regulation of the Central Bank No. 454-П of December 30, 2014 “On disclosure of information by issuers of equity securities”).
2) annual accounting (financial) statements of joint-stock company for 2019 shall be published no later than May 12, 2020. Joint-stock companies are required to submit annual financial statements within 90 days after the end of the year (para. 86 of “Regulations on accounting and financial reporting in the Russian Federation”, approved by Order of the Ministry of Finance of the Russian Federation dated July 29, 1998 No. 34н).
Meanwhile, the Central Bank has already previously extended the above-mentioned terms of mandatory disclosure of information by issuers of securities up to April 07, 2020 and April 09, 2020, respectively (information message dated March 27, 2020 “On the deadline for disclosure by joint-stock companies of the list of affiliates for the first quarter of 2020 and annual accounting (financial) statements for 2019”[4]).
4. Actual consequences of the taken measures and recommendations
Thus, the Central Bank of the Russian Federation decided to extend the disclosure of mandatory information to adopt measures to ensure non-proliferation coronavirus infection in connection with the adoption of the Decree of the President of the Russian Federation dated April 02, 2020 No. 239 “On measures on ensuring sanitary and epidemiological welfare of the population on the territory of the Russian Federation in connection with the spread of novel coronavirus infection (COVID-19)” and the establishment of non-working days April 04, 2020 to April 30, 2020. Therefore, legal entities, whose employees switched to remote mode of work or temporarily do not perform labor (official) functions due to non-working days, may be able to meet the requirements of the legislation in part of mandatory disclosures after the end of the high-readiness mode.
Moreover, the Central Bank recommended that companies should take advantage of the opportunity provided for in art. 2 of FZ No. 50, and to conduct general meeting of shareholders in absentia, and the shareholders entitled to vote at such meeting, not to try to visit such meetings. Accordingly, such recommendations are aimed at ensuring the non-proliferation of coronavirus infection (COVID-19) and will help to avoid personal contacts between shareholders and officials of the joint-stock company.
Authors:
Ksenia Stepanischeva, Counsel
Igor Savryga, Junior Associate
[1] http://publication.pravo.gov.ru/Document/View/0001202004020025
[2] https://cbr.ru/StaticHtml/File/59420/20200403_in_06_28-48.pdf
[3] http://static.consultant.ru/obj/file/doc/cbr_press_osroke_raskrytiya.pdf
[4] https://cbr.ru/press/pr/?file=27032020_094800if2020-03-27T09_48_24.htm