Oleg Deripaska (in the background) hopes to push aside Vladimir Potanin (in the foreground) in Norilsk Nickel.
Photo: Dmitry Dukhanin
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Oleg Deripaska Catches at Power
// Rusal urges re-election of Nornickel heads
Oleg Deripaska has officially declared war against Vladimir Potanin. Rusal has severely criticised the results of Monday’s meeting of the Norilsk Nickel board, where the Interros holding got both the posts of the board’s chairman and the company’s CEO. Rusal accuses Interros of abuse and hopes that gaining the support of Nornickel’s minor shareholders, it’ll change the state of affairs.
Yesterday Rusal (which is under control of Oleg Deripaska, who has the blocking shareholding of Nornickel) gave official commentary regarding the outcome of the meeting of the Nornickel board, which was held on Monday. At that meeting Vladimir Potanin assumed the post of the chairman of the board (his holding Interros owns some 30% of Nornickel shares), and deputy head of Interros, Sergey Batekhin, became Nornickel’s CEO. “He was nominated on an uncontested basis, without preliminary discussion at the appointments committee,” the Rusal press-release reads. The company impeached Mr Batekhin’s credibility, stressing that “according to his biography, he lacks sufficient expertise in metallurgy and has never held the post of a public company’s CEO.”
The appointment of mister Potanin, in the view of Rusal, contradicts both the Code on Corporate Governance of Great Britain (in the short run Nornickel plans ADR listing in London), and the ISS independent agency policies, which “supports electing an independent director to this post.” The ISS has consulted Nornickel’s shareholders for a few years. Moreover, from Rusal’s viewpoint, there is only one really independent person on the board of Nornickel – Guy de Selliers. Michael Levitt, Rusal emphasizes, is not independent “because of his direct affiliating with Interros,” which was acknowledged by the ISS. “The status of Heinz Schimmelbusch as an independent director is also doubtful,” Rusal adds.
Rusal doesn’t confine itself to evaluative assertions and hopes to change the state of affairs with Nornickel soon. Vera Kurochkina, spokesperson with the aluminium company, told Kommersant that Rusal intends to launch consultations with Nornickel minor shareholders to re-elect the board, so that “truly independent directors could appear there.” Simultaneously the board will be expanded to 13 persons. The ONEKSIM group, whose president Mikhail Prokhorov (he is the person that sold the shares of Nornickel to Rusal, receiving 14% of the aluminium company’s shares in exchange) is on the board of Nornickel, showed support for Rusal. However, at the meeting on Monday Mr Prokhorov voted for Vladimir Potanin. Rusal explains that “at first Mikhail Prokhorov voted for Guy de Selliers.”
Interros doesn’t seem to have gotten frightened with Rusal’s harsh statement. Vladimir Potanin’s representatives recommended that Oleg Deripaska’s company «should study more attentively the corporate documents of Nornickel» and learn that there is no appointments committee in the company. Nevertheless, the press-service of Interros reported that the holding “doesn’t mind Rusal’s intention to hold a special meeting.” “Business is built on pragmatism, and all shareholders are interested in avoiding conflicts,” Interros’ spokesperson stated without explaining why the confrontation with Rusal is getting even tenser. Nornickel points to the fact that on request of a shareholder owning more than 10% of shares, a special meeting is to be held within 70–90 days.
Experts say that Rusal’s claims concerning independent directors are fair and typical of the Russian business in general. “I’m member of the Association of Independent Directors, but I can’t see that it is an effective tool that protects our interests. In a situation when there are two or three major shareholders in a large company, an independent director will anyway depend on the one who brought him to the company,” says managing partner with the Independent Directors management company Andrey Severilov.
Lehman Brothers’ senior analyst Vladimir Zhukov considers that Rusal has every chance to boost its influence in Nornickel – for example buying up extra shares in the market. “The ONEKSIM Group, after selling its joint assets with Interros, has enough resources to side with Rusal in the struggle for the control over Norilsk Nickel. The question is whether ONEKSIM will want to do it,” the analyst points out. Nevertheless, Interros has a strong ally – Alisher Usmanov, who has promised to buy “not less than 5-10% of Nornickel’s shares.” Experts can’t give clear-cut prognoses regarding the stance of the minor shareholders. Despite the formally justified claims of Rusal, Mr Zhukov underscores that large funds which own Nornickel’s shares may fear that Oleg Deripaska will try to lower the cost of Nornickel’s securities for its more lucrative merger with the aluminium company.
Maria Cherkassova
All the Article in Russian as of July 09, 2008
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