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Yandex signs up Putin ally to help with restructuring

Alexei Kudrin, former head of Russia's Audit Chamber, to advise on corporate development

Ten days after Yandex confirmed a review of its operations that include moving IP out of Russia and selling much of the remainder locals, it has hired an ally of President Vladimir Putin to help out with the restructure.

Alexei Kudrin, described as a longtime Putin ally and who resigned as head of Russia's Audit Chamber last week, has confirmed that he will be joining Yandex to advise on corporate development.

Kudrin was appointed as finance minister in 2000 when Putin started his first term as Russian president, and held the post for 11 years. He was also deputy prime minister from 2000 to 2004 and again in 2007. According to some sources, he is credited with helping the Russian economy rid itself of much of the foreign debt it had accumulated during the 1990s.

Kudrin's appointment follows last week's announcement from Yandex, which is often labelled as Russia's version of Google, that it was beginning a process of restructuring the group's ownership and governance "in light of the current geopolitical environment."

Although headquartered in Moscow, Yandex's parent company, Yandex NV, is registered in Amsterdam, and a special committee of the Board of Directors said that it was exploring various options. Notably, these included divesting ownership and control of all businesses in the Yandex Group inside Russia, while moving forward with operating the divisions of certain services independently from Russia, including self-driving technologies and cloud computing.

The company said the Board anticipated that Yandex NV would in due course be renamed, with those businesses being divested in Russia retaining exclusive rights to the use of the Yandex brand.

As The Register reported, this would leave Yandex NV holding much of the company's offshore operations, if carried out, with the rest passing to other owners – possibly Yandex management in Russia. The appointment of Kudrin may suggest that the Kremlin wishes to tighten its influence over the part of Yandex that remains inside Russia.

In August, Yandex announced it was selling its news aggregation platform and Zen infotainment service, along with its home page, to VK – aka Russia's Facebook – one of Russia's largest social media businesses. Russia's state-owned bank Gazprombank already has a controlling stake in VK.

However, according to Bloomberg, Kudrin's planned role would be to help protect Yandex from pressure inside Russia and ensure the company remained in private hands and under the control of management.

Yandex has inevitably been caught up in the fallout from the Russian invasion of Ukraine. In June, CEO Arkady Volozh resigned after being added to the European Union's list of individuals sanctioned as part of its response to the conflict.

The EU also accused Yandex at the time of "promoting state media and narratives in its search results, and deranking and removing content critical of the Kremlin, such as content related to Russia's war of aggression against Ukraine."

Earlier in the year, Yandex withdrew its financial guidance for 2022 due to uncertainty over the economic outlook. It cited the effect that the conflict would have on its business, including the hit to advertising caused by the withdrawal of multinational advertisers from the Russian market and tighter advertising budgets for domestic businesses. ®

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