OREANDA-NEWS. Standard & Poor's Governance Services said today it lowered its corporate governance score (CGS) on Russian mobile telecommunications operator Mobile TeleSystems (OJSC) (MTS) to 'CGS-6+' from 'CGS-7'. At the same time, the Russia national scale CGS on the company was lowered to 'CGS-6.9' from 'CGS-7.4'.

The lowering of the CGS reflects concerns about the reduced board representation of directors independent from the majority shareholder, Sistema JSFC, following the 2006 annual general meeting (AGM).

Although we do not perceive any immediate risks in this respect, we note that the ability of independent directors to balance Sistema's influence and provide effective oversight of transactions involving other Sistema subsidiaries has reduced.

"The balancing power of independent directors is important in minimizing the general risks of concentrated ownership, even in view of Sistema's historically positive role in MTS," said Standard & Poor's governance analyst Oleg Shvyrkov.