Owen steers Virgin deal

The European Bank for Reconstruction and Development (EBRD) will finalise a contract – worth approximately u0.5 million in fees – with a major City firm this week.

Lawyers from the firm will advise on a project which focuses on assisting the development of companies and securities law in Russia. The bank would not comment on which firm it had selected from the eight submissions.

The proposed changes will affect several areas, including mergers and acquisitions and restructuring, increasing work for City firms.

The EBRD is working alongside the Russian Federal Commission for the Securities Market to restructure the Russian stock market and to regulate investment funds, the laws affecting corporate governance – including the protection of minority shareholders – and capital markets.

Chris Owen, partner at Allen & Overy's office in Moscow says: “There is a need to improve corporate governance in Russia to encourage an environment where there is a likelihood of inward investment.”

David Bernstein, legal counsel at EBRD says: “There have been complaints in the Russian market of a lack of transparency with no clear rules of the game.”

He adds: “If we can overcome these problems, then the investors will come back.”

A partner at Couderts – which also works with EBRD – Sally March says: “Since the disruption in the economy last August, many Russian companies are drowning in debt. It is important that the legal system offers simple procedures for companies that are able to restructure, as well as prompt litigation for those that cannot.”

Russian investments amount to a quarter of the EBRD's total signed commitments as of June 1998 and Russia continues to be the single largest recipient of the EBRD's technical co-operation funds.