The Russian way of corporate governance What are the governance issues that arise from this case? One of the governance issues was the inactivity of the Russian government. Yukon did not obey the law. There are/were Russian laws that “purport to provide protection for minority investors by giving them representation on corporate boards and the right to veto deals smacking of conflict of interest”. Oil is really important for Russia so it is understandable that they did not pay much attention to Yukon, but it is a provenance issue and it should not have happened.
The shareholders also shouldn’t have approved with the plan. They also approved the plan to issue more shares which lead to them losing control. Were the concerns of the foreign minority shareholders Justified? Yes, they were barred from voting which was not allowed. It was a case of corruption, even when they were allowed to vote they got ignored. What should the Russian government have done? They should have enforced the law. The Job of the government is to enforce the law and to govern the companies.
They didn’t act like a government but more like a submissive. Research what happened to Mikhail Storybooks after the article was written. Was this an acceptable answer to concerns about corporate governance? Since 2005 he was put in a Siberian Jail for 9 year. I don’t think this was an acceptable answer to concerns about corporate governance. It was not the act of 1 person and meanwhile corruption still goes on in Russia. The Russian government also made mistakes and they blame it all on Mikhail Storybooks.