Will Tesla approach Evropeyskaya Elektrotekhnica with regard to corporate governance?

Will Tesla approach Evropeyskaya Elektrotekhnica with regard to corporate governance?

October 5, 2018. Moscow – Tweets from Tesla CEO Elon Musk appeared to be false and misled investors about the alleged purchase of Tesla shares at a higher price, as well as the forthcoming renunciation of the company to becoming a public one.

An investigation conducted by US SEC (the regulator of U.S. financial markets) jointly with the U.S. Department of Justice led to this conclusion.

The story continued as Musk signed a pre-trial agreement with the American regulator. According to the agreement, a number of sanctions have been imposed on the company and its CEO:

Sergey Dubenok, Head of the Board of Directors of PJSC Evropeyskaya Elektrotekhnica, a leading company on the Russian engineering market, commented on this situation:

"It took just four months for our Company to make a decision on including two (out of six) independent directors on the Board of Directors after Evropeyskaya Elektrotekhnica became a public joint stock company as the result of IPO on the Moscow Exchange (the placement was held in September 2017). Moreover, the Board already included independent members at the first general meeting of the Company's shareholders (June 2018) after the IPO. For us, it was a natural step designed to protect the interests of the Company's minority shareholders. The absence of this vital element in Tesla's corporate governance practice, whose shares were placed on the stock exchange in the summer of 2010, is truly unexpected.

I would also like to note the importance of keeping a constant awareness of the responsibility to stakeholders that the company's leaders bear. Provocation and outrage on the part of business leaders in the public field is possible, but should be constructive, measured, and not damage the reputation of the company and its development prospects. Taking into account everything that Elon Musk has said and done publicly, he is very lucky to have the opportunity to maintain his position of CEO at Tesla.”

About the Group of Companies PJSC Evropeyskaya Elektrotekhnica

PJSC Evropeyskaya Elektrotekhnica (MOEX: EELT) provides comprehensive services in the sphere of creating energy and electric power supply systems, electric lighting systems, and low current systems at all types of facilities, as well as industrial electric heating systems.

The Company has been working in the electrical engineering market since 2004, and at present has its own engineering and production facilities. The Company is one of the leading distributors of electrical equipment in Russia, offering customers a wide range of products made both in Russia and abroad. Thanks to a well-organized and efficient logistics system, the Company is able to supply products (including oversize loads) all over Russia, including to hard-to-reach areas of the North, as well as Belarus, Kazakhstan, Turkmenistan, Kyrgyzstan and Uzbekistan. The Company established its own production of transformer substations, electric switchboard equipment of any complexity (up to 6300A), electric lighting systems and electric heating systems.

The Company implements projects in the Oil&Gas sector, electric power sector, nuclear industry, metal industry, mining industry, and manufacturing industry and at transport infrastructure facilities. Evropeyskaya Elektrotekhnica's customers include companies such as Rosneft, Gazprom, NOVATEK, LUKOIL, and Nizhnekamskneftekhim. The Company's projects include Power of Siberia, Yamal LNG, Smolensk NPP, Data Center of Sberbank of Russia, and the Domodedovo, Sheremetyevo, and Pulkovo airports, etc.

Since 2018, the Group has been producing highly efficient modular process equipment for clients in Oil&Gas and petrochemical markets at the site of its subsidiary ROG-Engineering, a research and production company in Ufa (Republic of Bashkortostan, Russia).

Key financial indicators of PJSC Evropeyskaya Elektrotekhnica (IFRS):

The number of employees is about 400 (as of June 30, 2018). Since September 2017, common shares of PJSC Evropeyskaya Elektrotekhnica are traded on the Moscow Exchange with trading code EELT.

In June 2018, the Company was named "Leader of Import Substitution" at the "Leader of Competitive Sales" annual national awards, in which 450 domestic suppliers from various industries took part.

Contacts:

PJSC Evropeyskaya Elektrotekhnica

Tel .: +7 (495) 640-93-48

Mailing address: Building 3, 1 Lyotchika Babushkina St., Moscow, 129344

For more information, please contact:

Stanislav Martyushev

Director for Corporate Communications and Investor Relations

PJSC Evropeyskaya Elektrotekhnica

Tel. +7 (495) 640-93-48, ext. 164       

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