Cherkasy Azot's Shareholder Register Frozen.

The Kiev Economic Court has ruled that Cherkasy Azot’s (AZOT) shareholder register was invalid during the period from June 26 2004 to March 2006. According to the ruling, which answered a complaint by AZOT’s main minority shareholder group, during the period AZOT’s registrar, the Ukraine Energy Company, was simultaneously also a shareholder, which is illegal. The agreement between the registrar and AZOT was also declared invalid. Earlier the Higher Economic Court ruled that AZOT’s last three share issues were illegal. Vladimir Nesterenko: AZOT’s main minority shareholder is putting pressure on the main shareholder, the Ukrsib group, to buy out the minority stake or perhaps to sell the majority stake. Although we expect Ukrsib to appeal, which would have the affect of suspending the ruling until the appeal is decided, the challenge to the share registry represents an escalation of the conflict which significantly increases risks to the company’s stock. We therefore suspend our coverage of Cherkasy Azot (AZOT) pending the resolution of the conflict. If the ruling is implemented, it would mean that AZOT local stock could not change hands. Also, the company would not be able to hold shareholder meetings. Please look out for our analyst’s notebook to be issued shortly.