Flexible quorum

The results of the Norilsk Nickel shareholders' meeting are in doubt

The forced partnership of Vladimir Potanin and Oleg Deripaska in Norilsk Nickel is clearly not a match made in heaven. Having put an end to one shareholder war in 2008 - between Mr. Potanin and his long-term partner Mikhail Prokhorov - RUSAL's purchase of a blocking stake in Norilsk Nickel almost immediately launched a new confrontation. Under the pressure of circumstances, this confrontation either died down or intensified, but now after the scandalous meeting of shareholders, it seems that it will be especially heated.

As you know, the election of a new board of directors on June 28 ended in the most unexpected way. Alexander Voloshin, who has led this body for the last year and a half and is believed to have ensured mutual understanding between shareholders, was not elected to the board. Actually, the voting results showed that the conflict potential between the years. Potanin and Deripaska outweigh the peacekeeping abilities of the former head of the Kremlin administration and former chairman of the board of directors of RAO UES. Immediately after the meeting, RUSAL accused Vladimir Potanin of violating the partnership agreement concluded at the end of 2008, and the Norilsk Nickel management of manipulating treasury shares during voting. Oleg Deripaska's company also announced that it would initiate an extraordinary meeting to restore justice.

However, as Vremya Novostei learned, it is too early to consider even the decision of the meeting on June 28 a fait accompli. The minutes of the scandalous meeting have not yet been signed, about which Alexander Voloshin, who chaired it, informed Norilsk Nickel General Director Vladimir Strzhalkovsky at the end of last week in a special letter. Mr. Voloshin reports that he discovered a number of violations of both legislation and corporate documents in the minutes of the meeting submitted to him for signature, and “until the violations are eliminated” he believes it is impossible to sign the minutes.

According to Mr. Voloshin's letter, the main violation is that shareholders at the meeting were misled regarding the quorum, and this, in turn, directly influenced the results of voting on agenda items. Thus, the letter notes, after registration at the opening of the meeting, the quorum was slightly more than 75% of the company's outstanding voting shares, and this figure was announced to shareholders. At the same time, although the quorum at a meeting of shareholders is established once, “when the presented documents come to the results of voting on the agenda items, it turns out that the persons participating in the meeting owned approximately 92.85% of the company’s outstanding voting shares.” Mr. Voloshin finds only one explanation for this metamorphosis: “This means that after the start of the meeting, approximately 17% of the shares were additionally and, in fact, secretly from the shareholders, and also secretly voted.”

A “secret package” of this size, without a doubt, is able to radically influence the results of cumulative voting - and this is the method by which the board of directors is elected. As is known, the 2008 agreement provided that Interros and RUSAL have equal representation on the board, and the company owners themselves are not included in this body. As a result of the meeting on June 28, Vladimir Potanin's holding nominated four of its representatives (in addition, Interros nominated VTB First Vice-President Vasily Titov, who also joined the board), and RUSAL nominated three, including Mr. Deripaska. “The company’s management transferred quasi-treasury shares to offshore companies and voted with them against Alexander Voloshin, whose candidacy was agreed upon by UC Rusal and Interros and supported by the state,” RUSAL said in a statement last Monday. Vladimir Strzhalkovsky, through his press service, told news agencies that the cumulative voting procedure does not provide for the possibility of voting against anyone (one can assume that over the past week the head of Norilsk Nickel has studied this procedure better and now knows exactly how to vote “against”).

In his letter, Alexander Voloshin points out the need to correct the violations, although it is obvious that there is no simple way to do this (except to invalidate the results of the meeting). It is also obvious that “hostilities” between shareholders will continue. Interros apparently believes that Oleg Deripaska violated the peace by being elected to the board of directors contrary to agreements. At the same time, it is not difficult to discover that Vladimir Potanin’s company has not fulfilled a number of promises announced back in 2008, including personnel ones.

The scandal in one of the largest Russian companies, which prided itself on the quality of corporate governance, is clearly not good for the image of both Norilsk Nickel and the entrepreneurs themselves. The coming weeks will show whether they will find the strength to look each other in the eyes and whether Norilsk Nickel will become the arena of an endless corporate war.

Ivan GORDEEV