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Bill Steinman
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What goes on in Russia’s biggest companies?

Transparency International – Russia graded the 200 biggest Russian companies for the amount of information they disclose about themselves. Most of them flunked.

On a scale of zero to ten for transparency, the companies scored an average of 2.6.

Of the 200 companies, 41 didn’t receive a single point. They scored zero for transparency.

Twenty-eight percent don’t disclose any information about their subsidiaries and associates and where they operate.

TI-Russia looked at disclosure in three main areas:

  • A company’s published anti-corruption programs
  • Its organizational transparency
  • And disclosure of key financial information on a country-by-country basis

The profits reportedly earned by the 200 companies represent 70 percent of Russia’a national income, TI said.

Some companies did well — 32 received five points or higher.

The top ranked companies for overall transparency were Magnet (7.9), Sberbank (7.9), Kazanorgsintez (7.8), Rosseti (7.5), Nizhnekamsk- neftekhim (6.8), Udmurtneft (6.4), MTS (6.3), RUSAL (6.2), Megaphone (6.0), ALROSA (6.0), and Tactical Missiles Corporation (5.9).

Among those scoring zero for transparency were Pipe Innovation Technologies, Novoshakhtinskii Zavod Nefteproduktov, Krastsvetmet, Trans Nafta, GAZFOND, Ulmart, Metallokomplekt-M, Alfa Bank, New Stream Group, Forteinvest, Drilling Company “Eurasia,” and Euroset.

The worst sectors for transparency were trade and food, and infrastructure construction. Those companies had an overall average score below 1.5.

Of the 200 companies that make up Russia’s so-called “backbone enterprises,” only five have a confidential communications channel for whistleblowers to report corruption offenses.

Only 14 percent have published a CEO message in support of the company’s anti-corruption program.

And 166 of the 200 companies don’t regulate political contributions.

The full TI-Russia report is here (pdf).

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

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