CBR sees no reason for major companies to leave exchange - deputy governor
MOSCOW. Oct 22 (Interfax) - The Central Bank of Russia (CBR) believes that the risk of major companies delisting from the exchange is exaggerated, as there are currently no grounds for this, CBR deputy governor Filipp Gabuniya said in an interview with Interfax.
"At this point, it seems to us that this is somewhat exaggerated. We don't see grounds for the delisting of major securities issuers," Gabuniya said.
"However, current regulation allows the exchange, in certain situations, to make decisions on lowering the listing level and even delisting. But in each case it is necessary to assess the consequences of such a decision for retail and institutional investors," Gabuniya said.
The head of state bank VTB , Andrei Kostin said in July that major public companies are increasingly thinking about delisting amid the stagnation of their market capitalization and high profits. This is becoming a "dangerous tendency" and a reason to consider encouraging issuers not to leave the exchange, he said.
A delisting due to the intentional violations of the issuer must become painful for the initiators of such conduct, the senior managing director for issuer and government relations at the Moscow Exchange , Yelena Kuritsyna said later. She said there are currently loopholes that allow companies to stop being public while avoiding legal requirements, and it is time to think about closing them.
"A company does not disclose information, does not hold an annual meeting of shareholders, a company does not have a board of directors, because it is not holding shareholder meetings. What do you do with it? Naturally, a desire arises to say that it must be delisted in order to show that we're watching and making sure that companies whose shares are traded on the exchange meet at least the basic standard," Kuritsyna said.
"But then the question immediately arises. Who will we punish in this situation? Will we punish the company that intentionally, among other things, perhaps, does this in order to get a delisting decision and not fulfil all the legal requirements it does not like - to buy out shareholders, that a large number of votes need to be collected. Or will we punish investors who acquired this company's shares and whom we are suddenly depriving of liquidity, the possibility of buying and selling these shares? This is a very difficult dilemma," she said.
"It seems to me that a possible solution to the issue might be for a delisting to be possible by decision of the exchange and by the decision of the regulator. But so that such a delisting, in cases where the company starts to behave inappropriately toward investors, is as painful as possible, not even the company, but for those individuals who chose such a decision, such conduct," Kuritsyna said.
