Sistema Appoints Leonid Melamed as President and Chief Executive Officer

Sistema (LSE:SSA), the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector, today announced the appointment of Leonid Melamed as President and Chief Executive Officer of Sistema with immediate effect, following a decision made at a meeting of the Board of Directors. Mr Melamed is the former CEO and President of Mobile TeleSystems ("MTS”), the largest mobile phone operator in Russia and the CIS and a subsidiary of Sistema. Leonid Melamed will replace Alexander Goncharuk, who will continue to serve as First Deputy Chairman of Sistema’s Board of Directors. Mr Goncharuk has been a member of the Board of Directors of Sistema since 1996. From 1995 to 1998, he occupied the post of Vice-President of the Corporation. From 1998 to 2001, he headed the telecommunication holding Sistema Telecom, and from 2003 to 2006, was head of Sitronics. During this time, Sitronics became the largest public technology company in Eastern Europe. In 2007, Sistema Hals became the first public Russian real estate company to list on the London Stock Exchange. The non-public assets of Sistema grew quicker than the market in such sectors as finance, retail and paid-for healthcare services. After two years the market capitalization of Sistema has grown by 40%, exceeding US$ 16 billion. Sistema’s revenues during this period have grown by 80% and constituted US$ 13.7 billion in 2007. Commenting on the management changes, the Chairman of the Board of Directors at Sistema, Vladimir Evtushenkov said: "Under the leadership of Alexander Goncharuk, Sistema has realized a series of large-scale and ambitious projects, playing an important role in the development of the Corporation. We are grateful for the efforts of Mr Goncharuk, during his time at the company we have successfully launched a unified brand for our telecommunication companies, entered the Indian market and opened state-of-the-art facilities for the production of micro-chips of 0.18 microns, accomplishing a real technological break-through over a short time. Currently, there are new challenges facing the Corporation: the building of new business in India, the shaping of an evolved telecommunications’ strategy and achieving leadership in respective markets of our non-public companies. I do not doubt that through the efforts of Leonid Melamed we will achieve these challenging goals.” Leonid Melamed, President of Sistema noted: "It is a great honour for me to lead Sistema, which serves approximately 100 million clients in the most diverse markets. I am confident that the experience of managing large diversified services businesses and my values will prove useful for me in my new role.” Leonid Melamed was born in 1967 in Moscow. He served as President and CEO of MTS from June 14, 2006 and has been a member of the Board of Directors at MTS from June 23, 2006. Prior to joining MTS, Leonid Melamed worked at ROSNO between 1991 and 2006, and served as the Director General and Chairman of the Management Board since 2003. Between 2004 and 2006, Mr Melamed served as the Chairman of the Expert Council on Insurance Legislation, part of the Russian State Duma Committee on Credit Organizations and Financial Markets. Mr. Melamed has won numerous awards in Russia for his successes in strategic leadership and operational efficiency. In 2004, Mr. Melamed was named "Person of the Year” in the annual "People of the Year” project by internet holding company Rambler. He also received the Russian public award in the insurance sector "Golden Salamander” in the category of "The Manager of Insurance Company”. He was named as one of the top 250 "Young Global Leaders” by the World Economic Forum in 2007. In 2008, Mr. Melamed joined the Board of the GSM Association, the global trade association for the mobile industry. Mr. Melamed is a graduate of the Sechenov Moscow Medical Academy and holds a PhD in Medicine. For further information, please visit www.sistema.com Sistema is the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector and has over 85 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, banking, real estate, retail and media. Founded in 1993, the company reported unaudited revenues of US$ 13.7 billion for the full year of 2007, and total assets of US$ 28.4 billion as at December 31, 2007. Sistema’s shares are listed under the symbol "SSA” on the London Stock Exchange, under the symbol "AFKS” on the Russian Trading System (RTS), under the symbol "AFKC” on the Moscow Interbank Currency Exchange (MICEX), and under the symbol "SIST” on the Moscow Stock Exchange (MSE). Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect,” "believe,” "anticipate,” "estimate,” "intend,” "will,” "could,” "may” or "might” the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.