Russian lawmakers’ talk of limiting foreign ownership in tech companies crashes Yandex stocks
On October 11, the value of shares in the Russian tech company Yandex plummeted on the Moscow Stock Exchange, falling roughly 18 percent over the course of the day. The company’s shares suffered similar losses after trading opened on the Nasdaq in the United States. Yandex’s total capitalization losses are estimated at 100 billion rubles (almost $1.6 billion), echoing market fluctuations a year ago, when Sberbank was reportedly close to buying part of Yandex.
According to the newspaper Vedomosti, the stock's collapse is a result of yesterday’s meeting of the State Duma Committee on Information Policy, where lawmakers discussed draft legislation from United Russia deputy Anton Gorelkin that would limit foreign ownership in “significant information resources” (including Yandex) to 20 percent. Foreign owners’ voting rights in companies that fail to observe the new requirements would nevertheless be restricted to 20 percent, and non-compliant information resources would be prohibited from selling advertising.
“We don’t comment on the movement of our shares,” said Yandex’s press office. In the parliament, Gorelkin says his new regulations would also apply to Mail.Ru Group, which saw the value of its shares fall three percent on the floor of the London Stock Exchange. Sources told Vedomosti that Gorelkin’s draft law was introduced at the request of staff in the Putin administration.
At the State Duma committee meeting, lawmakers couldn’t come to a unanimous decision about Gorelkin’s bill. Committee chairman Leonid Levin said the group will continue collecting proposals until October 20, and a final decision to support or reject the legislation won’t be made until November. Levin acknowledged that the core dispute over the bill is between the interests of the state and investors. Through the Federal Antimonopoly Service and Roskomnadzor, the government has already endorsed the initiative.
“It’s either security, and we postpone investment, or investment is what counts, and if we lose it, then all the services will cease to exist… It’s extremely important to understand here that the committee’s task is to bring together the different positions and find balance,” says Levin. Yandex General Director Elena Bunina calls the legislation discriminatory, arguing that the regulations “shoot Russian tech companies in the foot.”