Russian Aluminium
Russia's Cherney -"Derisipaska's Secret Partners May Pressure Him To Double-Cross Me."
by David Waldman
21 May 2007
Michael Cherney (Mikhail Chernoy) one of the founders of RusAl, a Russian aluminum giant, tells the inside story of his multi-billion-dollar suit against his ex-partner and present RusAl owner Oleg Deripaska in an exclusive interview to http://www.kommersant.ru/doc.html?docId=766500 Kommersant , a Russian daily.
The Kommersant newspaper obtained a copy of the agreement dated March 10, 2001 which stipulated the division of the assets of Siberian Aluminum in 2001 between its owners Oleg Deripaska and Michael Cherney, each of whom then owned 50% of the company. The document describes Mr. Cherney's exit from the aluminum business. According to the terms, Deripaska would pay his partner $100 million for 17.5% of SibAl and pay off the company debt for another $150 million.
An appendix to the agreement specifies that after Mr. Deripaska met the conditions of the main body of the agreement within three to five years, he would have to do likewise with the second part that stipulated the sale of Mr. Cherney's stock in full to a third party, based on the current market value, minus $250 million. After SibAl's assets were merged with those belonging to Roman Abramovich's, Michael Cherney would own 20% of the stock of the newly formed company to be called RusAl.
This agreement forms the basis of Michael Cherney's claims. He insists that Deripaska failed to perform on the second part of the agreement. In order to force his ex-partner to meet his obligations, Mr. Cherney filed a lawsuit in London's High Court in October 2006, demanding either payment in cash or an affirmation of his 20% ownership of RusAl. Last spring, following the merger of RusAl's, SUAL's and Glencore's assets, Michael Cherney's equity in the new company called UC RusAl would amount to 13.2%.
Deripaska's office told Kommersant yesterday that he "has no unfulfilled obligations towards Cherney." As Deripaska's representatives explained, on May 3 London's High Court rejected Cherney's lawsuit and refused to honor his request for an appeal. According to Cherney, "RusAl's jubilation about the rejection of my lawsuit is totally unfounded. Their lawyers merely won a delay for technical reasons." The problem with the suit concerned serving the subpoena to Deripaska; who was tightly ringed by security. Instead, the subpoena was served to a guard.
Cherney is planning to appeal the High Court's decision in the near future. He also claims that he is entitled to file a suit against Deripaska in another jurisdiction. Meanwhile, further delays will not serve the interest of Oleg Deripaska's partners in UC Rusal. Recently Viktor Vekselberg, a minority holder, informed Kommersant that the company was scheduling its IPO for November. The amount is expected to be no less than $5 billion.
An investment banker, close to RusAl's IPO, explained that the absence of a settlement between Deripaska and Cherney would raise "specious and unnecessary questions" among investors. According to another investment banker, the market players expect RusAl to settle before the IPO. So Mr. Cherney is confident that "it is not in Mr. Deripaska's interest to stall. The company's value is rising, and with it, the value of my shares is growing." Cherney noted that today he is in a position "to claim billions."
Cherney also said in the interview that he "suspects there is a third party who is ratcheting up the pressure on Deripaska not to pay me back," he said, "These could be Deripaska's secret partners," explained Cherney, "or high-placed officials who serve as a 'cover' for his business. Of course I hope I am wrong about the latter. But to prove it, the powers that be must talk some sense into Deripaska. People from the Administration or FSB may have nothing to do with his refusal to meet his obligations, yet people in the West are of the opinion that nothing happens in Russia's Big Business without a blessing from Big Brother, and so by breaching the contract, Deripaska damages the reputation of Russia's top leadership in a far-reaching way."
David Waldman is Chief Editor of Mass Wire Media Association
Copyright © 2007 Poland Chamber, Inc.
All rights reserved.
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