Arkady Volozh, the founder and CEO of Yandex, has resigned from his company after being included in the EU’s latest package of sanctions on June 3, in response to Moscow’s invasion of Ukraine.
The EU points out Yandex’s responsibility in “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.”
Volozh himself is described as “a leading businessperson involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.”
Furthermore, as founder and CEO of Yandex, Volozh “is supporting, materially or financially, the Government of the Russian Federation and is responsible for supporting actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine,” says the EU — without providing specifics.
According to a company statement, Volozh has stepped down with immediate effect from his positions as CEO and Executive Director of Yandex N.V., the Netherlands-based mother company, as well as from his board and executive positions with international subsidiaries.
Unused voting rights
Through a family trust, Volozh holds Class B shares representing a 45.3% voting and 8.6% economic interest in Yandex N.V., says the statement. The businessman said he did “not intend to give any instructions to [his] family trust as long as sanctions are in place,” and that the trust will vote instead according to the recommendations of the company’s independent Board of Directors.
Volozh believes the sanctions as “misguided and ultimately counterproductive.”
In its statement, Yandex underlines that neither the mother company nor any of its subsidiaries are, as such, targeted by western sanctions. The company “does not believe” that Volozh’s resignation will affect its “operations, financial position or relations with partners.”
“The Board continues to function as normal. Yandex has a strong and deep management team that is well placed to take the company to new levels with the ongoing support of the Board,” the company stated.
In mid-March, another Yandex top executive resigned after being included in western sanction lists. Executive director and deputy CEO Tigran Khudaverdyan was hit with an asset freeze and travel ban from the EU.
Business not as usual
While not targeted directly, Yandex has been exposed in various other ways to the tensions that followed Russia’s invasion of Ukraine:
- Since late February, the company has seen its stock suspended from Nasdaq trading, and warned about a default risk (see update);
- It has had to “scale back or pause many of [its] planned investments in our businesses both domestically and internationally,” as described in its latest annual report to the SEC;
- It has seen its delivery and mobility activities stopped or threatened in a range of western countries.
- It is in the process of selling its news aggregation and entertainment services amid increased censorship and media crackdown, with rumors suggesting that other assets could be sold in the future.
According to media reports, thousands of Yandex employees have fled abroad — including to such countries as Turkey — since February 24, the day the Russian army started invading Ukraine.
Independent publication Meduza published a detailed account on how Yandex became part of Russia’s censorship machine.
