July 12, 2003, Moscow. JSFC Sistema's Board of Directors adopted, at its latest meeting today, a resolution with a recommendation for the Board of Directors of ??? KNTS to appoint A.Yu. Goncharuk General Director of ??? KNTS, and G.Ya. Krasnikov, the company's General Designer and Science Director. ??? KNTS will, from now on, have a position of general designer, who will also be its science director, which is standard world practice for major companies engaged in science research, development and manufacturing of high-tech products, so as to keep the functions of running day-to-day business and spearheading research and development apart within corporate management.

Speaking on the Board of Directors' Resolution, Vladimir Yevtushenkov, the JSFC Sistema Board's Chairman, said, "The positions the Science Center Concern has captured in the industry in Russia and in world markets are a bridgehead from which its can launch a new, and more active strategy. In fact, the idea is to launch a research and development complex, the largest in the electronics industry, with a modern approach to managing its science innovation projects. We believe that achieving this goal will require the company's management setup to be given a new format. Alexander Goncharuk's experience and skills could be used with the highest effect in an area we consider critical and extremely important to our business. We recommend Gennady Krasnikov for General Designer because we are certain that his enormous work record and reputation in this industry could be applied with maximum effect in his new position that we hold to be very responsible and important, too. Our choice of the candidates has the support of Nobel laureate Zhores Alferov, Vice President of the Russian Academy of Sciences, who is head of the Board of Trustees of ??? KNTS.

Also at today's meeting, JSFC Sistema's Board of Directors named V.S. Lagutin, now CEO of OAO MGTS, one of Sistema Telekom's biggest enterprises, in its recommendation to the Board of Directors of ZAO Sistema Telekom, as its preferred choice for General Director of ZAO Sistema Telekom.

Sidelight:

JSFC Sistema's electronics assets are pooled in ??? KNTS (Russian acronym for Science Center Concern). The Concern's enterprises are engaged in designing, developing and manufacturing microelectronics products, industrial electronics, telecommunications equipment, and consumer electronics. The Concern's headquarters and most of its enterprises are centered on a Moscow suburb of Zelenograd, the Russia Silicon Valley, with several businesses located in Voronezh, South Russia, and Prague, the Czech Republic.

The Concern's other businesses are OAO NIIME and Mikron Plant, the biggest microcircuit manufacturer in Russia; VZPP-Mikron, a major microelectronics manufacturers; NIITM, the leading developer of microelectronics processing equipment in Russia; and Elaks, Elion and Kvant plants, which manufacture processing equipment and industrial and consumer electronics. The STROM Telecom company develops and manufactures telecommunications equipment and software that it supplies to major telecommunications companies in Europe and Asia.

OAO KNTS' Board of Trustees is led by Zhores Alferov, a Nobel laureate and Vice President of the Russian Academy of Sciences. JSFC Sistema's President Yevgeny Novitsky is Chairman of the Board of Directors of OAO KNTS.

For more detail, contact:

Investor Relations Department
Andrei Bliznyuk
Tel: +7 095 730 1543
bliznyuk@sistema.ru

Press Office
Olga Pestereva
Tel + 7 095 730 1705
pestereva@sistema.ru