The Kurgan Oblast Parliament Suggested Freezing Dividends in Russia

03.06.2009 — News

THE KURGAN OBLAST.

The Kurgan Oblast Parliament is getting ready to put forward an initiative that is unprecedented in Russia. According to the anti-crisis plan, the deputies suggested that joint-stock companies be prohibited to pay dividend on common and preferred stock.

On 23 June 2009, the draft amendment to the federal law will be brought up for the Oblast Duma discussion. At the moment the relevant committees of the RF State Duma are preparing the legal evaluation of the amendments. The findings from Moscow will most probably be negative since adopting them would lead to amending other legislative acts - including the Russian Constitution.

As the Oblast parliament informed RusBusinessNews, there exists a milder option - companies that receive state subsidies should limit the dividend payout on their shares until 1 January 2011. This measure will let the companies to save the working capital and survive the financial crisis.