MOSCOW -- Sistema (LSE:SSA - News), the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector, today announced that its Board of Directors approved a new organizational structure of the Company at its meeting on July 26, 2008.

Sistema adopted a matrix model and formed three new operating units in addition to functional divisions. These units will be responsible for the management of Sistema’s subsidiaries.

The operating unit “Telecommunications Assets”, previously the Telecommunications Assets Development unit, headed by Vitaly Savelyev, First Vice President of Sistema, will be responsible for the development and implementation of Sistema’s telecommunications strategy, as well as management of telecommunications and media assets, including MTS, Comstar-UTS, Sistema Mass Media, and other companies in Russia, as well as Shyam Telelink, Sistema’s subsidiary in India.

The operating unit “Consumer Assets” will focus on the development of companies in the consumer sector, including Detsky Mir, Intourist, MEDSI and MBRD, as well as Sistema Hals. The Board of Directors has appointed Felix Evtushenkov as Vice President of Sistema to head this unit.

The operating unit “High Technologies and Industry” will be engaged in Sistema’s high tech and venture projects, as well as private-public partnerships. This unit, headed by Sergey Boyev, Vice President of Sistema, will also oversee Sitronics and RTI Systems.

The new organizational structure of Sistema will comprise the following functional divisions:

All above mentioned managers of operating units and functional divisions will report directly to Leonid Melamed, President and CEO of Sistema.

Leonid Melamed, President and Chief Executive Officer of Sistema, commented: “The adoption of these changes to the organizational structure completes the process of reorganization, which was started a year ago, and underlines our efforts to improve the efficiency of asset management and simplify our corporate structure. The adopted matrix model of the organization is aimed at achieving greater participation and control over the execution of the strategy in daughter companies, increasing motivation and responsibilities of the Corporate centre’s senior management in the decision making process in target markets, as well as optimizing business development expenditures through synergies and consolidation of management resources.”

Sistema JSFC (London: SSA)