Roland Oliphant
Alexei Navalny, the bane of both the Kremlin and
state corporations, found himself elected to the board of
state-owned Aeroflot on Monday — and immediately promised to create
an anonymous complaint system to improve governance at the flagship
airline.
Navalny, the anti-corruption blogger and
opposition leader, was installed as an independent member of the
board after winning more than 787 million votes at the airline's
annual shareholder conference.
He announced his victory on Twitter with a
euphoric: “Fly Aeroflot!”
Before rising to prominence as a leader of the
anti-Kremlin movement that has staged huge protests since disputed
parliamentary elections in December, Navalny was best known as a
whistleblower who became a minority shareholder in state-controlled
companies in order to expose corruption.
Earlier this month his home and the offices of
his Rospil anti-corruption campaign group were raided by police
investigating violence at an opposition rally on May 6.
“Aeroflot will help me escape investigators.
I'll live on an airplane, like the teacher in ‘The Adventures of
the Italians,'” he joked on Twitter, referencing the 1974 Soviet
comedy “The Unbelievable Adventures of Italians in Russia.”
Aeroflot is 51.17 percent owned by the state.
Its authorized capital consists of 1.11 billion shares.
Navalny was nominated in February by billionaire
banker Alexander Lebedev, who owns a 15 percent stake in Aeroflot
through his National Reserve Bank.
Lebedev split his votes between Navalny and
Sergei Alexashenko, a Higher School of Economics professor who was
also elected as an independent board member, Navalny told
Forbes.ru.
Writing on his blog, Navalny thanked financial
advisers ISS & Glass Lewis, which had advised their clients to
back him as an independent who could be relied upon to serve
minority interests.
Analysts said the move was positive for
Aeroflot, as they expected Navalny to push minority shareholders
interests and improve corporate governance to make the company more
sustainable over the long term.
This will be the first time that Navalny has had
an opportunity to improve governance from the inside of one of
Russia's state corporations.
Navalny said he planned to introduce a six-step
plan for corporate governance at the airline.
“It's a complex of measures, starting from the
creation of a system under which all reports of abuse will go to an
auditing committee, and independent directors on that committee
will be responsible for checking the signal, and ending with the
publication of quasi-secret documents to all shareholders,” he told
Forbes.ru.
Aeroflot remains one of the few high-profile
state-controlled firms that Navalny has not crossed swords with in
his career as an activist investor, and he reiterated his faith
that it “is not a particularly sinister company; it's not Gazprom
or Rosneft.”
The relative respect seems to be mutual.
Aeroflot chief Vitaly Savelyev has said that Navalny's
corruption-fighting experience could be a boon for the airline.
By contrast, Rosneft president Igor Sechin last
week accused Navalny of spying for competitors. Navalny, who is a
minority shareholder in Rosneft, is pressing the oil firm to
release the minutes of all meetings of the company’s shareholders
and the board of directors for 2009.
Navalny will replace National
Reserve Bank's previous independent director, so his arrival is not
revolutionary, said Andrei Rozhkov, transportation analyst at IFC
Metropol.
“But he is more ambitious and, I
think, likely to pursue minority shareholder interests and the
improvement of corporate governance more vigorously,” he
said.
Specifically, Navalny could ask the
board and management to announce their dividend payout ratio and
ask for quarterly dividends, which would encourage minority
shareholders to invest in the airline, he said. Currently, Aeroflot
only issues annual dividends.
Other analysts were more circumspect.
“I'd say it is neutral for the company,” said
Vladimir Dorogov, an aviation analyst at Alfa Bank. “Aeroflot has
managed to improve its corporate governance over the past three
years quite substantially, I don't see any specific opportunities
for Navalny to improve things — just marginal stuff.”
Lebedev's motives for nominating Navalny remain
opaque. The former KGB officer, who also owns Britain's Independent
and Evening Standard newspapers and with Mikhail Gorbachev controls
the opposition-minded Novaya Gazeta newspaper, has been publicly
critical of the authorities, and appointing Navalny would be very
much in line with his stated political views.
But commenting on the job at the time of his
nomination in February, Navalny told The Moscow Times that Lebedev
had approached him for his “professional skills.”
"I have a clear, understandable program to
improve corporate governance in state-owned or state-controlled
companies, which applies to Aeroflot," he said.
Dorogov, at Alfa Bank, speculated that the
airline might be seeking to capitalize on Navalny's anti-corruption
reputation.
“Actually it is difficult to tell what Lebedev's
motives are for doing anything. It sometimes seems he does things
for no other reason than to upset people,” he said. “In any case,
the state could probably have stopped this if it had wanted to. So
it is a positive sign that the government is not interfering in
business affairs.”
Navalny said state shareholders had not voted
for him, and insisted that the government had not accepted him on
the board of its own will.
Navalny's appointment is unlikely to impact
analysts' recommendations to investors regarding Aeroflot shares,
which were generally positive but fraught with concerns that face
the entire aviation sector.
“He cannot change the fundamentals —
he can't reduce the oil price, which is over 30 percent of the
airline's operating costs, or bring down ticket prices,” Rozhkov
said.
http://www.themoscowtimes.com/business/article/navalny-elected-to-aeroflot-board/461034.html#ixzz1yuWeRCfc