Russian President Vladimir Putin has signed a decree enabling the state to suspend the directors and shareholders of any companies that fail to meet state defence contracts under conditions of martial law.
“Until the abolition of the military situation,” in case of violations by companies of their obligations under defense contracts, including terms of supplies, the rights of shareholders of such companies and the powers of their governing bodies will be suspended, according to the decree published on the government’s portal.
The new decree would apply to companies that “violate their obligations under a state contract, including failing to take measures to guarantee production deliveries”.
The decree would allow the industry ministry to name a new external administrator to take over the running of such companies.
Based on the proposals of the Industry and Trade Ministry, the government will appoint external management for such business entities.
Putin also signed a decree on the establishment of a working group on issues of enterprises engaged in the state defense order fulfillment. It will function under the government’s Military-Industrial Commission during the period of the “military situation.”
In four districts of Ukraine that Moscow has partially seized control of and claimed as its own territory, Putin announced in October that he was imposing martial law. This announcement was denounced as unlawful by most nations.
One year into the conflict with Ukraine, he has not imposed martial law throughout the country but has instead effectively put the economy on a war footing, with defense companies operating in three shifts around the clock to supply the army.