Krasnodar, August 27, 2007: Southern Telecommunications Company (“UTK”) (RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reports that on 24th August 2007 Standard & Poors Governance Services raised its Russia national scale corporate governance score (CGS) on Southern Telecommunications Company to “CGS-4.9” from “CGS-4.8”. The global scale score was affirmed at ‘CGS-4+’.
According to Standard & Poors, the upgrade on the Russia national scale primarily reflects the fact that "UTK" PJSC has conducted an open tender for audit services in 2007. The rating agency views this as positive, despite reservations with regard to the independence of the tendering committee.
UTK’s management is open to the investment community and seeks to develop transparent governance procedures. Transparency remains constrained, however, by the delayed publication of the annual IFRS accounts, and shareholder rights remain adversely affected by preferences given to the majority owner in relation to the dividend payout schedule.
The overall CGS on "Southern Telecommunications Company" PJSC is the result of four component scores on the global and Russia national scales:
- Ownership structure and external influences - 4+/4.8
- Shareholder rights and stakeholder relations - 6+/6.6
- Transparency, disclosure, and audit - 5/5.3
- Board structure and effectiveness - 4/4.2
Additional information on the CGS upgrade is available at the corporate site in the section “Investor Relations/Ratings” and at https://www.standardandpoors.ru/
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