*Free Razb0rka report on Magnit*
Razb0rka made their report on Magnit available for free online: https://boosty.to/razb0rka/posts/437952bd-57cc-47db-8bb6-ed24350fa7bb

This provides us the chance to provide a free translation into English (see attachment). This allows subscribers to get a better understanding of what the Razb0rka reports look like.

Razb0rka report on Nornickel
We have now translated and published the Razb0rka analysis on the Nornickel RAS report over Q1 2025.

All Razb0rka reports can be found in the members area of EAHCISS (under 'files'). You can login via the EAHCISS website (www.eahciss.org), please let us know if you face any problems.

Razb0rka report on Yandex (not to be confused with Nebius!)
We have now translated and published the Razb0rka analysis on the Yandex IFRS (IFRS Accounting Standards) report over Q1 2025. We attached the financial report for your convenience.

All Razb0rka reports can be found in the members area of EAHCISS (under 'files'). You can login via the EAHCISS website (www.eahciss.org), please let us know if you face any problems.

Euroclear provided more information on the release of funds
We earlier reported on the information the Clearstream released in their annual report. Euroclear has now too reported on this matter in their annual report (attached, p. 190). We'll quote the relevant part:

"As of year-end 2024, Euroclear Bank holds amounts on restricted C- and I-accounts recognised off-balance sheet (see Notes II and III). These restricted accounts were opened unilaterally by NSD in 2023 in the name of Euroclear Bank as countermeasure to the interantional sanctions imposed. The amounts held on the restricted C- and I-accounts have significantly decreased and amount to resprectively to RUB 41.9 billion (0.4 billion €-equivalent) and RUB 9.7 billion (0.1 billion €-equivalent), compared to RUB 262 billion (2.6 billion €-equivalent) and RUB 19 billion (0.2 billion €-equivalent) last year.

Between April and September 2024, Euroclear Bank's type C-account has been seized or debited on several occasions following Russian decrees for an amount of approximately 2.8 billion €-equivalent for the benefit of NSD's sanctioned clients. These clients are consequently no longer entitled to the balance blocked in Euroclear Bank and these balances could potentially serve to compensate the affected clients if the competent authorities provide the authorisation to release these amounts. NSD I-accounts balances have decreased as NSD has paid out some of the underlying to bondholders outside of Euroclear Bank in RUB.

The EU has introduced in December a loss recovery and no liability clause to its Russian sanctions regime now allowing the competent authority of a Member State to authorise the release of cash balances frozen by a CSD and attributable to the National Settlement Depository (NSD) under certain conditions. Essentially, this new clause allows the Belgian Ministry of Finance to authorise Euroclear Bank to debit NSD's account with the amounts that have been taken from Euroclear Bank's accounts with NSD following Russian court decisions or in application of Russian countermeasures, so that Euroclear Bank can compensate its Participants. Euroclear Bank will only be able to pay out the compensation amounts once the Belgian Ministry of Finance has provided its authorisation."

Court Press Release in relation to Nord Stream II
The court in Zug (Switzerland) is responsible for the bankruptcy procedures of Nord Stream II. The court announced today (https://zg.ch/de/gerichte/zivil-und-strafrechtspflege/kantonsgericht#Mitteilung) that a debt restructering agreement was confirmed by the court. This should avoid the bankruptcy of Nord Stream II. The court's ruling has not yet been made public. We have attached the previous court ruling of the 9th of January 2025 for your reference. The full court press release consists of the following text (translated from German):

"Press release dated 9 May 2025
By decision of the Cantonal Court of Zug EN 2022 2 of 9 May 2025, the restructuring agreement (dividend settlement) of 30 April 2025 concluded between Nord Stream 2 AG and its creditors, including Annexes 1 and 2, was confirmed by the court. Pursuant to Art. 307 para. 1 SchKG, the decision on the debt restructuring agreement may be appealed under the Code of Civil Procedure. Pursuant to Art. 307 para. 2 SchKG, the appeal has suspensive effect, unless the appellate court decides otherwise. Since the decision of 9 May 2025 is not yet enforceable, the Cantonal Court of Zug does not provide any further information on the debt restructuring moratorium proceedings of Nord Stream 2 AG (cf. Art. 308 para. 1 lit. b SchKG)."

Razb0rka report on Ozon
We have now translated and published the Razb0rka analysis on the OZON IFRS (IFRS Accounting Standards) report over Q1 2025. We attached the financial report for your convenience.

All Razb0rka reports can be found in the members area of EAHCISS (under 'files'). You can login via the EAHCISS website (www.eahciss.org), please let us know if you face any problems.

Razb0rka report on Tatneft
We have now translated and published the Razb0rka analysis on the Tatneft RAS report over Q1 2025.

All Razb0rka reports can be found in the members area of EAHCISS (under 'files'). You can login via the EAHCISS website (www.eahciss.org), please let us know if you face any problems.

Razb0rka report on Alrosa
We have now translated and published the Razb0rka analysis on the Alrosa RAS report over Q1 2025.

All Razb0rka reports can be found in the members area of EAHCISS (under 'files'). You can login via the EAHCISS website (www.eahciss.org), please let us know if you face any problems.

Amount of unpaid dividends for Gazprom
Gazprom declared record dividends of 51.03 Rubles per ordinary share (=102.06 Rubles for the 2 ordinary shares that represent 1 depositary receipt [ADR]) over the first half of 2022.

Many investors were not able to convert their Gazprom depositary receipts into ordinary shares because of the refusal by brokers and (sub) custodians to facilitate this. As many of you are aware: Gazprom depositary receipts are not eligible for the payment of dividends due to changes in Russian legislation in April 2022. Once the depositary receipts are converted, investors can claim the unpaid dividends.

At least 800 million euros in unpaid dividends is likely to fall back to Gazprom post September 2025. This is due to the statute of limitations in relation to unpaid dividends (3 years).

In practice the amount will likely be higher as many investors that converted their ordinary shares post October 2022 have not yet claimed unpaid dividends due to the complexity of the procedure.

According to Gazprom, 5.90 percent of the share capital is currently still represented by depositary receipts: https://www.gazprom.com/investors/stock/. This amounts to approximately 1.4 billion ordinary shares.

EAHCISS is exploring options for (funding) class actions against financial institutions that misinformed investors about their option to convert and applicable sanctions or simply refused to facilitate the conversion of depositary receipts into ordinary shares. We will keep you updated in due course.

Razb0rka report on Inter RAO
We have now translated and published the Razb0rka analysis on the Inter RAO RAS report over Q1 2025.

All Razb0rka reports can be found in the members area of EAHCISS (under 'files'). You can login via the EAHCISS website (www.eahciss.org), please let us know if you face any problems.

New round of automatic DR-conversion
The Russian Central Bank took a decision on the 6th of June 2025 that provides for a new round of automatic conversion of DR's ([global or American] depositary receipts / GDR's / ADR's) that are stored in Russian infrastructure.

The decision by the Russian Central Bank is based on Russian legislation that allows the Central Bank of Russia to set the date for a (new) round of automatic conversion. The legislation does not allow the Central Bank of Russia to set a date for a new round of so called 'forced conversion', where investors can request the 'forced conversion' of DR's stored outside of Russian infrastructure, without any support of western brokers or depositary banks. The date for forced conversion / forced transfer (of ordinary Russian shares) was set in the law itself.

Unfortunately, this new round of automatic conversion will not be helpful to most western investors that seek to convert their Russian DR's, as their DR's are kept with non-Russian brokers.

To our knowledge it hasn't been possible to transfer DR's into Russian infrastructure. Even Russian brokers with sub-accounts with western brokers (such as Cifra broker) have not willing to accept inbound transfers DR's over the last years.

Fix Price share swap program
Fix Price has announced a share swap program. The share swap allows ADR-holders to swap the ADR's in Fix Price for ordinary shares of the Russian PJSC Fix Price. Fix Price has communicated that the transaction should be considerd economically neutral and that Kazakh holding of Fix Price will remain the majority shareholder in PJSC Fix Price. All information can be found on: https://exchange.fix-price.com/en/. Interested investor are advised to read the memorandum that is published on the website above.

Unfortunately, investors from countries that are considered unfriendly from a Russian perspective cannot participate in the share swap, unless the investor received permission from the Russian government. This permission can be requested from the Government Commission for Control over Foreign Investments in the Russian Federation (http://government.ru/department/560/) on the basis of article 1(b) of Decree of the President of the Russian Federation dated 01.03.2022 No. 81 (as amended on 20.05.2024) "On Additional Temporary Economic Measures to Ensure the Financial Stability of the Russian Federation".

Update on Russian case law regarding forced transfer and unpaid dividends
In this post we provide a first update on recent Russian court decisions. These court decisions were kindly provided by Irina Sibirina from the legal firm Itlektis.ru. More case law on Sberbank securities will follow soon.

Case 1: Forced transfer of Rosneft shares and unpaid Rosneft dividends
The first case involves an investor, mr. Gubaev, that bought Rosneft shares via the Swiss CBH Bank (the case materials speak in one section about directly buying ordinary shares but refer to converted depositary shares in another section). He applied to get his ordinary shares forcefully transferred from CBH Bank to his Russian brokerage account with ATON. According to the court materials, the chain of custody involved The Belgian Branch of Bank of New York Mellon and Citibank Russia. The Russian appellate court ruled in October 2023 that Citibank Russia
had wrongfully denied the request for a forced transfer and ordered Citibank Russia to carry out the forced transfer. The full case materials can be found here: https://kad.arbitr.ru/Card/1cc1f615-c31d-4c06-93e1-0c901dd26fdc.

Mr. Gubaev then requested the payment of dividends from Citibank Russia. Citibank Russia noted that the procedure for the payment of dividends that was set out by the Central Bank of Russia wasn’t followed by its account holders. Therefore, it transferred about 1 billion Rubles in dividends back to Rosneft. Then mr. Gubaev requested the unpaid dividends from Rosneft. Rosneft refused, because according to Rosneft it wasn’t fully established that the dividends that were returned by Citibank Russia included the dividends of mr. Gubaev. The court did not accept this argument and ruled that it is sufficient to establish that Citibank did not pay the dividends to mr. Gubaev and that Citibank had returned dividends to Rosneft. The court then ordered Rosneft to pay the unpaid dividends to mr. Gubaev. The full case materials can be found here: https://kad.arbitr.ru/Card/4039a05c-f2f0-4df1-9ddd-5eb8fd15ec10.

Both cases were brought to appellate courts and cassation. The decisions above were confirmed in cassation.

Why is this case interesting?
Rosneft has generally been very non-cooperative when it comes to claiming unpaid dividends.

This case shows 1) that forced transfer can still be carried out when the request for a forced transfer was unlawfully denied and 2) that Rosneft has unlawfully refused to pay unpaid dividends and that going through court can help to get a court to order Rosneft to pay the unpaid dividends.

Update on Russian case law regarding taking western brokers to Russian courts to transfer securities
In this post we provide a second update on recent Russian court decisions.

Case 2: Taking western brokers to court in Russia to transfer securities
The second case involves the Cypriot company Lafourcad, that was owned by a Russian individual. Lafourcad wanted to transfer 6,360,000 shares of Sberbank from its account with EFG Bank Luxemburg to its account with the Russian broker Renaissance Capital. EFG Bank refused and mentioned sanctions as the reason to refuse the transfer. Lafourcad then sent an application to the competent sanctions authority in Luxemburg to get authorization for the transfer, which was rejected.

Lafourcad then took EFG Bank to court in Russia for refusing the transfer. The Russian custodian for EFG Bank, Rosbank, which held the Sberbank shares for EFG Bank, was also involved in the case a third party.

The Russian court determined that EFG Bank illegally refused to carry out the requested transfer and ordered Rosbank to carry out the transfer. As a result, Rosbank had to transfer the Sberbank shares and dividends out of the account of EFG Bank into the account of Lafourcad with Raiffeisen bank.

All case materials can be found here: https://kad.arbitr.ru/Card/34af2ecf-7a13-40a3-a742-483a8073de50

Why is this case interesting?
Even if investors missed the opportunity to request the forced transfer of shares, investors may be able to sue their western broker and the Russian custodian in a Russian court. The court can then determine if the western broker unlawfully refused to transfer Russian securities to Russia. The court order can then be executed by the Russian custodian of the western broker. Many clients of western brokers hold ordinary Sberbank shares in accounts with western brokers that they would like to transfer to their account with a Russian broker, as this would often simplify the payment of dividends.

Although the Russian court considered itself to be competent on the basis of article 248.1 of the Russian Arbitration Procedure Code, which is primarily aimed at Russians that are affected by western sanctions, western investors may well be able to get the Russian court to consider the case on the basis of article 247(7) of the Russian Arbitration Procedure Code. This article states that Russian courts are competent if the dispute arose out of relations related to the circulation of securities, the issue of which took place in the territory of the Russian Federation (see for example the following cases: https://kad.arbitr.ru/Card/aa009897-397e-40b8-b0cc-a5f476e175a9 and https://kad.arbitr.ru/Card/abec3367-9671-44dd-a7fd-d846a3f97b52).

Update on Russian case law regarding financial compensation from Raiffeisenbank for unlawfully rejecting a request for forced conversion
In this post we provide a third update on recent Russian court decisions.

Case 3: Raiffeisenbank was ordered to pay financial compensation for failing to execute a request for forced conversion
The third case involves mr. Nesterenko that held ADR's (depositary receipts) of MTS via Interactive Brokers. Mr. Nesterenko requested Raiffeisenbank forcefully convert of his MTS ADR's. Raiffeisenbank Russia refused the request which a general statement that included various reasons why such a request can be rejected.

Mr. Nesterenko considered the rejection to be unlawful and went to court to request compensation from Raiffeisenbank. The court determined that mr. Nesterenko submitted the documents that he could reasonably gather and that Raiffeisen put unreasonable conditions in place. The court also considered that Raiffeisenbank, as a professional bank, has it's own resources to verify the information that was provided.

The court decided that Raiffeisenbank had to pay compensation to mr. Nesterenko and considered the share price on the Moscow Exchange, just prior to the date of filing the court case appropriate to establish damages. In addition previous dividend payments that were not received by mr. Nesterenko were added as compensation.

Raiffeisen appealed the judgement. Although the appellate court reversed the decision, the court of cassation reinstated the initial court decision. The case is currently being reviewed by the Russian Supreme Court.

All the case materials can be found here: https://kad.arbitr.ru/Card/50cc8fe1-3de6-4b33-a677-281d8f0913a4

Why is this case interesting?
This case shows that investors may well be able to receive financial compensation from Russian custodian banks if they wrongfully rejected a request for forced conversion.

Update on Russian case law regarding claiming unpaid Rosneft dividends: I can do this myself...
In this post we provide a fourth update on recent Russian court decisions.

Case 4: Who needs a lawyer to claim Rosneft dividends in court...?
The fourth case involves mr. Bychkov that held ADR's (depositary receipts) of Rosneft via the Cypriot broker EXT Ltd. and had them successfully converted via forced conversion. Mr. Bychkov then requested Rosneft to pay the unpaid dividends, which was only about 17,000 Rubles.

Rosneft refused the request, stating that it wasn't sufficiently proven that mr. Bychkov owned the ADR's at the Rosneft dividends over 2021 that were returned by Raiffeisenbank to Rosneft (in the amount of 6,915,398,471.46 Rubles!!) included the dividends that were due to mr. Bychkov.

Mr. Bychkov then went to court himself, without a lawyer. The relatively low claim of 17,000 Rubles would make it economically non-viable to be represented by a lawyer. Mr. Bychkov also didn't attend the hearing, probably due to travelling costs.

The court established that Rosneft had unlawfully rejected the request to pay the unpaid dividends and ordered Rosneft to pay the dividends.

Rosneft appealed and went to the court of cassation. Both higher courts agreed with the initial court decision.

All the case materials can be found here: https://kad.arbitr.ru/Card/a415ee98-a224-4b97-a1a0-c7e7a6be6b57

Why is this case interesting?
This case shows that investors can successfully file claims in Russian courts themselves, without a lawyer. It also shows that Rosneft may attempt to create a high burden for investors by appealing even low claim awards.