OREANDA-NEWS. On August 27, 2007 Southern Telecommunications Company [(RTS: KUBN, KUBNP; MICEX: UTEL, UTELP; ADR OTC: STJSY, KUE FRA)], the largest fixed-line operator in the South Federal District of Russia, hereby notes that rating agency Standard & Poor’s confirmed its 4+ RCG rating.  At the same time, S&P raised its rating of the company on the Russian sales from RCG 4,8 to RCG 4,9, reported the press-centre of Svyazinvest.
 
According to S&P’s report, the upgrade reflects mainly the fact that a tender was held to select the operator’s 2007 auditor.  The tender is viewed as a positive, although major concerns were voiced about the independence of the tender committee.
 
The management of STC has expressed its willingness to engage in an open dialog with the investment community and within the scope of its powers is striving to set in place more transparent corporate governance procedures.

Meanwhile, transparency is constrained by the company’s late release of its IFRS financial statement and the violation of minority shareholder rights due to the advantage held by the majority shareholder in the schedule of dividend payouts.
 
STC’s Russian corporate governance rating is the result of four analytical components based on the international and Russian scale:
 
• ownership structure and external influence - 4+/4,8;
• shareholder rights and interested party relations - 6+/ 6,6;
• financial transparency, information disclosure and audit - 5/ 5,3;
• composition and efficiency of the Board of Directors - 4 / 4,2.
 
More detailed information on the operator’s credit rating upgrade can be found in the section “Investors and shareholders.  Company ratings” of STC’s corporate website or at http://www.standardandpoors.ru.