OREANDA-NEWS. Armada Group (MICEX-RTS: ARMD) reports that the company's Board of Directors was changed by an Extraordinary General Meeting held on 21st July. The majority in the new Board is representing RBC founder German Kaplun and did not have anything to do with managing Armada before. Alexey Kuzovkin, one of the company's originators who had chaired the Board of Directors since 2009, was elected but chose not to part of the new Board. An Extraordinary General Meeting scheduled for 22nd July by another shareholder Bank Narodny Credit with the same list of candidates for the Board of Directors did not take place for lack of quorum.

"The meeting held on 21st July and its resolutions raise doubts as to their legality," Alexey Kuzovkin commented. "The meeting was scheduled when the proceedings were still underway against ARSENAL ADVISORS LTD, RBC founders' company. Besides, there were law violations when preparing and holding the meeting, which will be challenged through court procedures."

Alexey Kuzovkin also said the resolution on changing the Board of Directors was unfounded and inadvisable and offered some arguments.

Since Armada's IPO in 2007 the Group's revenue growth in each year exceeded the growth rate of the Russian IT market, and in 2014 Armada entered Russia's Top 20 largest Russian IT companies according to Expert RA and Top 10 software designers. Armada's customers included more than 1,200 organisations, including 75 companies of Russia's Top 100.

Armada has developed organically and through acquisitions. In various years the Group incorporated PM Expert (Russia's company No.1 in project management), Helios IT (among CNews Top-3 IT infrastructure management companies), PMT/MEDIALOG (ranked by CNews as No.1 in designing software for healthcare).

In 2013, Armada's revenue stood at RUB 5 billion. Preliminary figures indicate that contracts worth of more than RUB 3.6 billion have been awarded in 2014. In the midst of the slumping IT market, in 2013, Armada launched a staff optimising programme to enhance the Group's profitability in 2014.

In June 2014, Armada's Board of Directors approved a dividend policy providing for 15% to 30% of the Group's net profit to be paid in dividends and a policy of partial buyback of Armada's shares from the open market.

Since the time of IPO, the majority of members in Armada's Board of Directors have been the founders of the companies incorporated in the Group. "Over these years our team has built a sustainably developing company. The Board of Directors has always been open to discussing any issues with the Group's shareholders and its resolutions took into account one of the recent key issues of the shareholders - dividends and buyback of shares," Alexey Kuzovkin said. "That Board of Directors had all the required authority to efficiently manage the Group and responsibility for implementing the Group development programme. The voting shareholders, however, neither expressed any criticism concerning the management nor offered any alternative development programme."

The EGM of 21th July was initiated by co-founder of RBC German Kaplun. As a result of the Meeting, the majority in the new Board of Directors was gained by the candidates who had not been previously involved in managing Armada. These include German Kaplun (RBC co-founder), Alexander Morgulchik (RBC co-founder), Artem Inyutin (RBC ex-Director) and Dmitry Kirpichenko (ex-Director of Maxwell-Capital Fund affiliated with RBC, whose licence was later revoked by the Central Bank of Russia).

"I don't believe these members of the Board of Directors are competent enough and capable of providing long-term development for the Group. While the new Board of Directors has so far offered no action plan, the market is well aware of their tactics towards RBC minorities during the decline period," Alexey Kuzovkin went on.

"In addition, I'd like to point out the circumstances that preceded the initiative to change the Board of Directors. Since 2013, a limited group of investors related to German Kaplun has given me zero-option offers to buy their share (over 30% of the company) at a price much in excess of the market cost through fund raising. It is my refusal to accept such offers that brought about further events."

"Considering all the above circumstances, I think it's impossible for me to continue working at the company," Alexey Kuzovkin said.