Igor Sechin moves to another dimension

Kommersant discovered that the powers of Igor Sechin, the head of Rosneft, may be greatly expanded. The latest changes to the charter of the company will enable its president to decide on the transactions, the price of which will be ten times more than it is now – $500 million. The Board will approve transactions for the amount of up to $1,5 billion. Such powers are not uncommon in privately owned companies, but public structures do not trust their heads so much. The officers of Rosneft itself explain the changes as a “movement to another financial and economic dimension”, but it is essentially the same thing. The limitations were introduced to the charter of the company, when its then president Sergey Bogdanchikov “lost the trust” of the then Vice-Prime Minister Igor Sechin.

Pursuant to the law on joint-stock companies, the companies’ boards of directors approve transactions for 25 to 50% of the assets’ balance value. Everything over 50% is in the competence of the shareholders’ meeting. According to Advocate Evgeny Zhilin, Managing Partner of the Law Firm "YUST", there are no limitations on the decisions concerning transactions below 25% of the assets’ value. The lawyer explains: “The procedure in most cases depends on the scale of the business and the possible lack of trust to the leader”. The value of the Rosneft assets in the first quarter of the current year reached 5,5 trillion roubles. This means that the law allows Rosneft to leave at the president’s discretion the transactions of up to $40 billion.