OREANDA-NEWS. Fitch Ratings has put the ratings of Sistema Joint Stock Financial Corporation (Sistema) and its subsidiaries OJSC Mobile TeleSystems (MTS), Joint Stock Oil Company Bashneft (Bashneft), and OJSC MTS Bank (MTS Bank) on Rating Watch Negative (RWN). The rating actions follow charges being levied against Vladimir Evtushenkov, the majority shareholder and Chairman of the Board of Directors of Sistema, in connection with the legalisation of shares of BashTEK group.

KEY RATING DRIVERS
Fitch believes the consequences may be negative for all the affected companies, but the likelihood of negative developments and the exact impact cannot be estimated at this stage. Sistema made a public announcement that its major shareholder and Chairman of its Board of Directors was charged with legalisation of shares of BashTEK group. Sistema's management believes that the acquisition of BashTEK group was legal and transparent.

RATING SENSITIVITIES
Fitch will resolve the RWN once there is greater clarity on the developments following the charges against Mr. Evtushenkov. The ratings could be affirmed or downgraded.

FULL LIST OF RATING ACTIONS
Sistema
Long-Term Issuer Default Rating (IDR) of 'BB-': placed on RWN
Local currency IDR of 'BB-': placed on RWN
National Long-Term Rating of 'A+(rus)': placed on RWN
Senior unsecured ratings of 'BB-' and 'A+(rus): placed on RWN
Loan Participation Notes issued by Sistema International Funding S.A. and guaranteed by Sistema of 'BB-': placed on RWN

MTS
Long-Term IDR of 'BB+': placed on RWN
Short-Term IDR of 'B': placed on RWN
Local currency IDR of 'BB+': placed on RWN
Local currency Short-Term IDR of 'B': placed on RWN
National Long-Term Rating of 'AA(rus): placed on RWN
Senior unsecured ratings of 'BB+' and 'AA(rus): placed on RWN
Loan Participation Notes Issued by MTS International Funding Ltd and recourse to MTS of 'BB+': placed on RWN

Bashneft
Long-Term IDR of 'BB': placed on RWN
Short-Term IDR of 'B': placed on RWN
Local currency Long-Term IDR of 'BB': placed on RWN
Local currency Short-Term IDR of 'B': placed on RWN
National Long-Term Rating of 'AA-(rus)' : placed on RWN
Senior unsecured ratings of 'BB' and 'AA-(rus)' : placed on RWN

MTS Bank
Long-term IDR of 'B+': placed on RWN
Short-term IDR of 'B': not affected
National Long-term Rating of 'A-(rus)': placed on RWN
Viability Rating of 'b-': not affected
Support Rating of '4': placed on RWN.