Moscow, Russia - 14 March 2006 - Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, announced today that it has transferred 14.72% of the shares in Concern SITRONICS ("SITRONICS"), the technology arm of Sistema, to SITRONICS Management.  SITRONICS Management has been established for the purpose of implementing a share option programme for the senior management of SITRONICS. Sistema's current shareholding in SITRONICS as a result of this transaction was reduced from 94.53% to 91.56% of the outstanding share capital, but may be diluted further in the future through the exercising of the options to be awarded.

The share options will be awarded to the senior management of SITRONICS and its business units during 2006 and during the next four years.  

This is one of the first such programmes to be launched by Sistema and reflects the decision by Sistema's Board of Directors to introduce such schemes across the Group, in order to incentivise and reward key executives and to align senior executive remuneration with the creation of value for all shareholders.   Award levels will be determined by the Board of Directors on the basis of individual and company performance.  

About SISTEMA

Sistema is the largest private sector consumer services company in Russia and the CIS, with over 50 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, insurance, banking, real estate, retail and media. Founded in 1993, the company reported revenues of US$ 5.4 billion for the first nine months of 2005, and total assets of US$ 12.1 billion as at September 30, 2005. Sistema's shares are listed under the symbol "SSA" on the London Stock Exchange, under the symbol "AFKS" on the Russian Trading System (RTS), and under the symbol "SIST" on the Moscow Stock Exchange (MSE).

About CONCERN SITRONICS

Concern SITRONICS, headquartered in Moscow, Russia is the technology arm of Sistema active in four core segments: Telecom equipment manufacturing & software development (Infocommunication Technologies), Information Technologies, Microelectronic Components and Consumer Electronics.