Russia rethinks dividend policy in context of Ukraine | beyondbrics

Russia rethinks dividend policy in context of Ukraine | beyondbrics:



"Russia is rethinking investor friendly dividend reforms as the Ukrainian crisis weighs on its faltering economy. Rules introduced last year that would oblige state companies to put more of their profits in shareholders’ pockets may be shelved, according to a report out on Wednesday.



Russia has been pushing state companies to pay more generous dividends in an effort to improve the country’s investment image and boost interest in upcoming privatisations. Rules introduced in late 2012 setting a minimum 25 per cent pay out were a step in the right direction but, as often happens with Russian regulations, there was room for interpretation.



Russia gave state companies the “choice” of paying 25 per cent of net income calculated on the basis of their International Financial Reporting Standard accounts or 35 per cent using Russian Accounting Standards. But pressure was applied to get state companies to migrate to IFRS. Do the arithmetic and it’s not difficult to see why. In most cases state companies can get away with paying smaller dividends if they stick with RAS."



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