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Prosus to write down R10.7bn stake in Russia’s VK Group

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Vladimir Kiriyenko, CEO of VK Group, the parent company of Russia’s biggest social network VKontakte.
Vladimir Kiriyenko, CEO of VK Group, the parent company of Russia’s biggest social network VKontakte.

Naspers unit Prosus is set to write down a $700 million (R10.7 billion) stake in Russia’s biggest internet firm VK Group.

This, as tech companies continue to pull out their services in Russia since it invaded its neighbour Ukraine on 24 February.

VK, which was known as Mail.ru Group until 12 October 2021, is a Russian internet company.

It was started in 1998 as an e-mail service and went on to become a major corporate figure in the Russian-speaking segment of the Internet.

Following the invasion, Vladimir Kiriyenko, CEO of VK Group, the parent company of Russia’s biggest social network VKontakte, was one of the people put under sanctions by the US government because of alleged close ties with Russian president Vladimir Putin.

Prosus, a Dutch multinational conglomerate company that is the international internet assets division of South African multinational Naspers, owns a 27% stake in VK Group.

In a statement, Prosus says it is extremely concerned about the continued conflict. “It is in the world’s interest to find a solution that provides an immediate de-escalation and secures long-term peace and stability in the region and beyond,” says the company.

“Our primary concern is the well-being of our employees and we continue to support all of our people in the region.”

It notes that over the last week, international sanctions have been imposed on many Russian entities and individuals.

These include sanctions on the CEO and indirect shareholders of online platform VK Group, in which Prosus holds a minority stake, it adds.

“As a consequence of these sanctions, Prosus asked its directors on the VK board to resign their positions.

“We expect to write down the full carrying value of the VK asset, of approximately $700 million in the current reporting period,” Prosus concludes.

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13 Aug
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