Secretive Norilsk Nickel

Andrey Klishas wants to limit access to information about the company

The conflict between the shareholders of MMC Norilsk Nickel - Oleg Deripaska's RUSAL and Vladimir Potanin's Interros - provoked the company's management to initiate changes to a number of Russian legislation. MMC President Andrei Klishas proposed that the Russian Lawyers Association and the National Council on Corporate Governance develop a bill that would limit the rights of minority shareholders to information about any public company.

In his letter, Mr. Klishas explained that minority shareholders often request data “not to exercise their rights under the law, but solely for the purpose of obtaining and subsequently disclosing information for their business purposes.” In his opinion, it is necessary to introduce a certain threshold: if a minority shareholder has less than a certain number of securities, he will not be able to receive information. As RUSAL told Vremya Novostey, “the position of Norilsk Nickel management has been clear for a long time - a shareholder cannot have any rights other than the right to own his shares.” “The company is now managed according to this principle. This letter once again reinforced this position. It is absurd and contradicts not only the principles of corporate governance, but also the current legislation. It is quite obvious that the proposed amendments are aimed only at resolving the situation around Norilsk Nickel in favor of Interros. They have nothing to do with improving corporate governance. On the contrary, they practically nullify the rights of minority shareholders and increase the level of lack of management control,” noted the RUSAL press service.

As is known, Rosneft had a corporate dispute with its minority shareholder Alexei Navalny, who demanded copies of minutes of meetings of the company’s board of directors. In mid-October, Rosneft appealed Mr. Navalny’s actions in court. According to the company, the information it is requesting is “only needed to gain publicity” and not to exercise its rights as a shareholder.

In early October, Prime Minister Vladimir Putin supported initiatives to change corporate legislation. True, he believes that it is necessary to further protect minority shareholders, and not deprive them of some of their rights. “The problem of incorrect actions of large shareholders, primarily private ones, exists. I won’t say now what we plan to do, but it is quite obvious that the legislation needs certain transformations and improvements,” he said, speaking at the VTB Capital investment forum in Moscow. At the same time, he said that the government is watching how the controlling shareholders of “the largest Russian companies act in their own interests, neglecting the interests of minority shareholders, and the state can do nothing or almost nothing.” “In order for the situation to be more stable and civilized, it is necessary to amend the legislation. We are thinking about it,” the prime minister said. “We see that money is being withdrawn and used for other purposes.”

Mr. Klishas also proposed several measures aimed at protecting Russian companies from hostile takeovers and from foreign capital. “When developing civilized procedures for mergers and acquisitions on the Russian stock market, it is necessary to establish not only the rights and obligations of the persons participating in the acquisition procedure, but also specific requirements for the financial performance of the acquired company. This will eliminate the use of takeovers of public companies solely to solve the financial problems of the acquiring company to the detriment of the interests of other shareholders,” Mr. Klishas noted in the letter. In his opinion, Russian legislation does not have these protective mechanisms. As you know, many reproached RUSAL for seeking to solve its debt problems by merging with Norilsk Nickel.

Mr Klishas is calling for companies to be allowed to vote their quasi-treasury shares. Now, by law, you cannot vote with them, but you can use shares if they belong to its subsidiaries.

However, there is little chance that minority shareholders will have their rights limited, says Pepeliaev Group partner Vladimir Sokov. “The actions of minority shareholders sometimes cause difficulties for a number of companies in collecting the required amount of requested information, but the main question here is how to legally separate the interest of a minority shareholder from its abuse of its position,” Mr. Sokov noted. The head of corporate practice at FBK Legal, Alexander Ermolenko, believes that the fate of the initiatives of Norilsk Nickel management depends on whether the government supports them. In his opinion, such innovations can negatively affect the investment climate in general and an individual company in particular. “Concealing information from minority shareholders will inevitably scare them away, because few people are interested in investing money in a company without being able to obtain any information about it,” the lawyer believes.

Norilsk Nickel General Director Vladimir Strzhalkovsky asked the Ministry of Internal Affairs to check two different versions of the charter of OK RUSAL Investment Management LLC, presented to MMC by the company’s General Director Maxim Sokov. The charters were approved by the same minutes of the shareholders' meeting. In his November 22 letter to the Minister of Internal Affairs, Rashid Nurgaliev, Mr. Strzhalkovsky noted that the submission of false documents and challenging the decision to approve the list of candidates for voting in the council elections could be used to cast doubt on the legitimacy of the extraordinary meeting. MMC shareholders if “individual shareholders are not satisfied with the results of the meeting.” Therefore, when a crime is discovered, he asks “to make appropriate procedural decisions against the perpetrators.” INTERFAX

Irina TSYRULEVA