MOSCOW, March 29. The Russian Ministry of Industry and Trade filed an application to the court to suspend the corporate rights of X5 Retail Group N.V. in relation to the Russian subsidiary that manages the Pyaterochka, Perekrestok and Chizhik retail chains, the company reported, assuring that the court proceedings will not affect the daily operation of the enterprises.
“X5 Retail Group N.V. … announces that the Ministry of Industry and Trade of the Russian Federation has notified the company of an application to the Arbitration Court of the Moscow Region to suspend the company’s corporate rights in relation to its Russian subsidiary LLC Corporate Center X 5,” the statement says.
At the beginning of March, the Government of the Russian Federation included LLC «Corporate Center ICS 5» in the list of economically significant organizations — to implement the law excluding foreign holdings from their ownership structure. This is necessary, among other things, for payment dividends — now, in a number of cases, real Russian owners cannot exercise their rights due to Western sanctions, the Cabinet of Ministers noted.
«The legal proceedings will not affect the company's daily activities in Russia, and its enterprises continue to operate as usual. After receiving notification of the application, the company's supervisory board held an urgent meeting to discuss this event,» the company added. At the same time, X5 CEO Igor Shekhterman and X5 President Ekaterina Lobacheva will leave the board of the Dutch company, but will continue to fulfill their responsibilities for managing the subsidiary, “focusing on developing and maintaining the stability of Russian retail operations.”
Changes have also occurred in the composition of the supervisory board of the Russian subsidiary. As a result, the management and supervisory board of X5 Retail Group N.V. will consist of two and three members, respectively, and the board of directors of LLC «Corporate Center X 5» will consist of six.
It is noted that if satisfied, the claim will lead to the suspension of the shareholder rights of the parent structure in relation to the subsidiary and the subsequent distribution of its shares between the holders of depositary receipts and the ultimate owners of the Dutch company. In turn, the subsidiary will be transformed into an open joint-stock company with shares listed on the Moscow Exchange.
X5 Group is one of the largest Russian retailers. As of December 31, the company operated 24,472 stores. The chain includes stores «Pyaterochka», «Krasny Yar», «Slata», «Victoria», «Deshevo», supermarkets «Perekrestok», as well as discounters «Chizhik». The parent company is registered in the Netherlands.