The Ministry of Industry and Trade asked the court to deprive X5 Retail Group of its rights to its Russian subsidiary. The company manages the Pyaterochka and Perekrestok chains

The Russian Ministry of Industry and Trade has notified X5 Retail Group NV that it has filed a claim with the Moscow Arbitration Court to suspend the Dutch company's corporate rights in relation to its Russian subsidiary, Corporate Center X 5 LLC. This was reported in a statement by the X5 Retail Group press service.

“The legal proceedings will not affect the company’s day-to-day operations in Russia, and its businesses continue to operate as usual,” the company said.

According to X5's statement, if the court satisfies the Ministry of Industry and Trade's claim, the company's shareholder rights in relation to the subsidiary will be suspended, X5's shares will be transferred to the Russian company and distributed among the holding's beneficiaries in accordance with their shares in the Russian jurisdiction.

Against the backdrop of the Ministry of Industry and Trade's lawsuit, X5 announced that CEO Igor Shekhterman, President Ekaterina Lobacheva and six members of the board of directors would leave the company's board. However, they will continue to manage Corporate Center X 5 LLC.

Deputy Minister of Industry and Trade Viktor Yevtukhov explained the agency's claim by the fact that the Russian subsidiary of X5 was included in the list of economically significant organizations ( ESO ). According to him, the direct participation of the Dutch company in the Russian structure "creates risks of causing harm to the Russian division of X 5, Russia and its citizens."

• In 2023, Vladimir Putin signed a law simplifying the transition of companies included in the list of economically significant organizations (ESO) to Russian jurisdiction from other countries. In early March, the Russian government approved a register of six such organizations.
• According to the government order, Kommersant notes , the Ministry of Finance, the Ministry of Industry and Trade and the Ministry of Energy will be able to file lawsuits in the arbitration court to suspend the corporate rights of foreign holdings in the EZO. So far, the talk is about suspending the rights until the end of 2024.
• As The Bell noted , companies included in the EZO list can thus be returned to Russian jurisdiction through the courts. This procedurewill allow Russian shareholders to receive dividends that are not paid due to sanctions imposed after Russia's invasion of Ukraine.
• X5 Group is the largest grocery retailer in Russia by turnover. On the Russian market, the company, among other things, manages the Pyaterochka, Perekrestok, Chizhik, Krasny Yar and Slata retail chains. As of April 20, 2023, Kommersant writes , 47.86% of X5 was owned by CTF Holdings SA, which is associated with Alfa Group, and another 11.43% belonged to Axon Trust.