On 23rd December 2004 the international rating agency Standard and Poor’s announced that they reduced the corporate governance score (CGS) of OJSC Uralsvyazinform after the Company’s Board of Directors took a decision not to prolong the contract of employment with the General Manager.

On 24th December 2004 Standard and Poor’s announced a reduction of scores of other regional telecommunication operators participating in the Svyazinvest holding, including OJSC North-West Telecom. The CGS of OJSC North-West Telecom was reduced to CGS-5 from CGS-5+.

OJSC NWT does not agree with the lowered rating, as: 

1. In the opinion of the company, it is unjustified to extend the reasons of one company’s score revision over all regional telecommunication operators.

2. In the opinion of the company, a double standard is used in the score revision:

• the factor of OJSC Svyazinvest’s dominating influence on strategic decision-making in the companies has been already taken into account by Standard and Poor’s in determining the rating of the holding’s companies, and that has been stated in the agency’s reports. Therefore, this cannot be the reason of the score lowering for the ‘Ownership Structure and External Influence’ assessment component. For neither the ownership structure, nor the external influence have changed;
• the factor of OJSC NWT’s General Manager’s replacement in the recent two years has been already taken into account by Standard and Poor’s in determining the rating of the company, and that has been stated in the agency’s reports. Therefore, this cannot be the reason of the score lowering for the ‘Ownership Structure and External Influence’ assessment component, either.

3. The lowering of the score for the component ‘Members and Efficiency of the Board of Directors’ is also unjustified, as decisions of the Board of Directors of one regional telecommunication company do not provide grounds for judging the efficiency of the Board of Directors of another company.

Undergoing the procedure of CGS assignment, along with the improvement of the working efficiency of the Board of Directors, observance of shareholders’ rights and ensuring information disclosure, is one of the most important areas of OJSC North-West Telecom’s work to improve corporate governance quality.