Shareholders of Russia’s number two insurer, Ingosstrakh, have banned foreigners from the company’s board of directors. Czech PPF Investments, a minority shareholder says it will now challenge the decision in court.
Those wishing a seat on the board of Ingosstrakh need a higher financial education, at least three years of work experience in the insurance business and be Russian citizens. Ingosstrakh’s shareholders approved an amendment to its charter of incorporation, which excludes non-Russians. The amendment was proposed late last week by majority shareholder – Oleg Deripaska's Basic Element. Basic Element said Ingosstrakh’s defense industry clients’ concerns with the information security were at the heart of the change. The adoption of the proposal hasn’t impressed minority shareholder – Czech PPF Investments group. PFF took a 38% stake in the insurer last May and has been pressing for board representation. It now says it will challenge the decision in court. Independent lawyer Yan Dasgupta of Gridnev & Partners also has doubts about the legality of the new amendment. And experts point out that the company may limit access to the information that may contain State secrets without banning foreigners from its board. The looming court battle also comes against a background of Ingosstrakh questioning the legality of the PPF Investments purchase of its stake in the insurer. Ingosstrakh says the stake was acquired by subsidiary companies without the official notification.