MOSCOW (Reuters) – Russia’s Moscow Exchange on Monday said it would suspend trading in the global depositary receipts (GDRs) of Russian retailer X5 from April 5 following an order from the Russian government.
X5’s Moscow-listed receipts hit a record high in early trade, but were 5.2% lower by 1330 GMT.
X5, Russia’s largest retailer, on Friday said that Russia’s industry and trade ministry had notified it of a claim lodged with the Moscow region arbitration court that could restrict certain rights of one of its subsidiaries.
X5 said possible restrictions could include prohibitions on voting in the shareholder general meeting and X5 being unable to dispose of its shares in the subsidiary or receive distributions from the subsidiary’s net profit.
The ministry’s move led the company to make a series of corporate governance changes, including CEO Igor Shekhterman and President Yekaterina Lobacheva stepping down from the management board.
X5 said the court proceedings would not impact its day-to-day operations in Russia, but flagged risks should the court satisfy the ministry’s claim and the subsidiary’s shares be disbursed.
“Ultimately, DR holders who do not participate in the distribution may end up not being able to recover their investment, and the value, profitability and liquidity of their GDRs may be adversely affected,” X5 said in its statement on Friday.