They will be able to participate in meetings virtually

The Central Moscow Depository is going to simplify the participation of shareholders in general meetings using the Internet. Such a project, according to the developers, should help reduce the costs of issuers. It is not difficult to create an electronic voting mechanism, however, according to experts, the demand for this service will be limited due to the increased costs of the shareholders themselves.

Last Friday, the Central Moscow Depository (CMD) announced the launch of a project for remote presence at general meetings of shareholders. According to the registrar's plan, as a result of its implementation, shareholders will have the opportunity to take part in meetings via the Internet, ask questions and vote online using electronic ballots.

CMD was created in 1994. According to the PARTAD rating, CMD ranked second in the number of issuers with more than 500 shareholders. CMD clients are 1.5 thousand companies, the depository maintains about 6 million personal accounts of security owners. Revenue for 2009 amounted to 867 million rubles, net profit - 170 million rubles.

The implementation of the project will reduce the costs of issuers with a large number of minority shareholders. According to CMD, sending documents to 300 thousand shareholders costs the issuer an average of 15 million rubles. Thus, almost all energy companies transformed from RAO UES of Russia had a comparable number of shareholders. Sberbank and AvtoVAZ have about 150 thousand shareholders registered in the register. Chief Managing Director for Legal Affairs of the Ilim Group (8 thousand shareholders) Alexey Lomko said that for his company mailing out documents for one meeting costs more than 1 million rubles. But it's not uncommon for companies to hold three or four meetings a year.

The head of the Federal Financial Markets Service, Vladimir Milovidov, also calls the possibility of remote voting using electronic ballots a promising area. However, he notes that separate regulation of such procedures will need to be developed. In addition, he said, the shareholders meeting should not be completely virtual.

Other market participants indicate that demand for services to organize virtual shareholder meetings will be limited. Thus, according to the general director of the NIKoil registrar, Maxim Kalinin, his company offered clients the use of electronic newsletters, but due to the fact that their distribution is expensive, the project was not in demand. An electronic signature certificate can only be obtained from specialized certification centers that have FSB licenses. “The cost of one electronic signature is about $100,” points out Mr. Kalinin. “It is unlikely that the issuer will pay for the creation of such signatures for each shareholder.” In addition, the expert adds, in order to use this signature, the personal presence of the shareholder will be required to sign documents on accession to the electronic signature agreement. “This service may not reduce, but increase our costs,” agrees RusHydro board member Evgeny Gorev. “It will not be possible to completely abandon the physical holding of shareholder meetings.”

Foreign shareholders of Russian companies may be interested in remote participation in shareholder meetings. “For the West, this format of shareholder meetings is not an innovation,” points out Evgeny Gorev. The first online meeting of shareholders was held in 2009 by the American Intel, however, according to foreign media reports, to date no more than a dozen issuers have taken advantage of this opportunity.

Polina Smorodskaya

Shareholders will be gathered on the Internet