Principal shareholders

The Company’s share capital is RUB 7,965,224.3450, consisting of 2,943,258,269 ordinary shares and 242,831,469 preferred shares. We neither have convertible securities, nor exchangeable securities, nor securities with warrants.

The following table sets out certain information with respect to the ownership of our ordinary shares by each shareholder.

The Company is indirectly controlled by the Russian Government, which holds 53.2% of the Company’s ordinary shares through Svyazinvest, VEB and Federal Agency for State Property Management (FASPM). There are no measures in place to ensure that such control is not abused.

Russian law, including the Joint Stock Companies Law and corporate governance requirements applicable to companies listed on Russian stock exchanges, provide certain protections to minority shareholders. For instance, there are supermajority shareholder approval requirements for certain corporate actions, pursuant to which a shareholder is able to demand that the company purchase the shares held by that shareholder if the shareholder voted against or did not participate in voting on certain types of actions. In addition, companies are required to obtain the approval of disinterested shareholders for certain transactions with interested parties and the shareholders owning not less than 1% of the company’s stock may bring an action for damages caused by the company’s managers or directors. Furthermore, since our Shares are listed on MICEX-RTS, we are and expect to continue to be required to comply with a number of corporate governance standards which provide additional protection to its shareholders, including minority shareholders. However, no assurance can be given that the applicable Russian laws and the corporate governance standards with which we have to comply will be able to fully protect the interests of our minority shareholders if such interests are in conflict with the interests of its other shareholders.

None of the Company’s shareholders have voting rights different from any other holders of the Shares.

Each shareholder of the Company has an obligation under Russian law to notify in writing the Company and the FSFM about (i) an acquisition of 5% or more of the ordinary shares, and (ii) any circumstances which result in a change in the number of such shares above/below the 5%, 10%, 15%, 20%, 25%, 30%, 50%, 75% or 95% threshold. Pursuant to the FSFM regulation such notice shall be given within ten days after the shareholder became or should have become aware of (i) the acquisition or disposal of such shares, or (ii) if such acquisition or change results from additional share issuance, after the date the shareholder became or should have become aware of the state registration of the report on the results of such additional share issuance.

Ownership of Ordinary Shares by each shareholder as at April 30, 2012

Shareholder Number Ordinary Shares
Svyazinvest1, 2 1,276,624,469 43.37
FASPM1, 2 218,620,597 7.43
LLC Mobitel3 192,719,452 6.55
VEB1 72,013,105 2.45
Other minorities4 1,183,301,243 40.20
Total 2,943,258,269 100.00

Ownership of Preferred Shares by each shareholder as at April 30, 2012

Shareholder Number Preferred Shares
1 Controlled by the Russian Government.
2 Holds an interest in the share capital in the Company notifiable to the Company and the FSFM, as described below.
3 The Company owns 99.9% of the share capital of LLC Mobitel.
4 Including stock option program.
LLC Mobitel 30,487,109 12.55
Other minorities 212,344,360 87.45
Total 242,831,469 100.00