Russian Aluminium
Russia's Cherney To Increase Claim Against Deripaska to $6 Billion
by David Waldman
8 May 2007
Cherney-Deripaska Court Watch in London: It has all the makings of classic Russian high drama. Michael Cherney (Mikhail Chernoy) is the founder of RusAl, Russia's huge aluminum industry. His partner at RusAl was Oleg Deripaska, today listed by Forbes as the richest man in Russia. Deripaska owns 66% of the shares of RusAl along with many other companies.
In 2001 the former partners signed an agreement in London by which Cherney left the company, entrusting his 20% equity to Deripaska to manage. Five years later, Deripaska was supposed to sell the stock and pay Cherney back its marker price. Cherney claims he received $250 million only, at least ten times less than he is entitled to.
Cherney filed suit against Deripaska in High Court in London in November, 2006, this step taken only after Cherney waited for Deripaska to pay him in full for over five years. Confronted with the pointlessness of further waiting, he turned to the court to affirm his ownership rights of 20% of RusAl's stock - or alternatively, compensation for the sales package, plus dividends.
In the first stage of the lawsuit on May 3, 2007, the London court found for the defendant's motion that Deripaska had been served the subpoena improperly.
Sources close to Cherney are confident their position will ultimately prevail, since the court has not even started considering the case's merits - that is, the 2001 contract between the partners. Analysts believe Deripaska is stalling, yet he will eventually run out of technicalities to dodge judicial rulings on the merits of the case, especially since the suit can be filed in any number of countries where RusAl and Deripaska do business.
The analysts also believe that the stalling tactics damage RusAl's case, since Cherney intends to increase the claim sought and can prove the legitimacy of this raise, since he is owed dividends from RusAl's investment into other businesses that Deripaska handled after 2001.
UC Rusal is not a public company and operates in veiled secrecy, which makes it hard to assess its real value. Analyst Alexander Yakubov believes that it is worth about $30 billion. 20% of this amount totals the $6 billion that Cherney is claiming. Yakubov observes that one of the stockholders in UC Rusal, Victor Vekselberg, voiced a desire to hold the company's IPO before the end of the year.
"In this case," says Yakubov, "It is not in Deripaska's interest to drag out legal problems with his ex-partner, instead of dotting all I's." Perhaps Cherney counts on Deripaska's making a deal. In the past Deripaska has been sued by his former partners: Transworld's owners, as well as Mikhail Zhivilo, Anatoly Bykov and Avaz Nazarov. All the suits were ultimately settled between the parties.
David Waldman is Chief Editor of Mass Wire Media Association
Copyright © 2007 Poland Chamber, Inc.
All rights reserved.
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