2003-02-03
On February 3, 2003 The Institute of Corporate Law and Corporate Governance presented an updated rating list of 25 major Russian companies judged for the quality of their corporate governance practices in the III quarter of the 2002.

Compared with the results of a similar assessment performed in the 2^nd quarter of 2002, the standings of the most businesses surveyed are substantially the same. This reflects, on the one hand, the traditional relative "lull" in corporate activity in July-September 2002 following a flurry of annual shareholders' meetings. On the other hand, such consistency also confirms that the corporate governance situation on the Russian securities market has stabilized, with companies interested in outside investments making consistent efforts to improve their information disclosure records and lower corporate governance risks. The CORE-rating list is still led by VimpelCom, while Rosneft-Purneftegaz comes last. Lenenergo fell from the 2^nd place to as low as the 11^th-12^th places shared with Aeroflot   after failing to provide the Institute during the three months under review with any of the essential corporate documents sought as a shareholder. Lenenergo was also found to have an inferior balance sheet structure: lower current liquidity and capital ratio. In contrast, Severo-Zapadniy Telecom rose to the 3^rd-4^th places from the 7^th-8^th positions it had earlier had on the CORE-rating list. The climb was due mostly to the company's greater overall transparency, in particular, improvements made to its corporate website. Better financial performances also meant higher rankings for a number of oil companies including Sibneft, YUKOS, Tatneft, and Tyumenskaya Neftyanaya Kompaniya. In the opinion of the Institute's experts, the restated Federal Law "On the Securities Market", in effect since January, 2003, should favorably bear upon the standard of corporate governance practices at Russian companies. The statute makes more stringent requirements, for example, on information disclosure about corporate operations in the form of quarterly reports. Companies are now obliged to reveal a large scope of data about themselves, their finances and business, their shareholders/participants, the persons serving on their governing bodies, and interested-party transactions executed.

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