Sual adjusts proposals on approving interested-party transactions at Rusal
MOSCOW. July 11 (Interfax) - Sual Partners, which owns 15.8% of the shares in aluminum giant UC Rusal and which acts on behalf of Viktor Vekselberg and his partners, has withdrawn a demand to convoke an extraordinary meeting of shareholders in Rusal in order to amend the company's charter concerning interested-party transactions, Rusal said on Wednesday.
Rusal said it had canceled an EGM scheduled for August 3.
But Sual has also made a new request for an EGM, Rusal said.
Rusal did not say what was in the new demand, but a source close to the Rusal board told Interfax that the new demands also concerned the procedure for approving interested-party transactions.
The source said Sual in its original request proposed to include provisions set down in the shareholders agreement on the right of veto in the Rusal charter. It proposed endowing members of the board of directors representing Rusal's biggest shareholders with the right to refer interested-party deals to shareholders for approval. These deals are currently approved by the board.
Rusal's board and the Honk Kong Stock Exchange, where the company's shares are traded, did not back Sual's initiative. The exchange considers that the charter amendments violate the rights of minority shareholders and the rules regulating the listing of securities on the Hong Kong Stock Exchange.
In its new demand for an EGM, Sual proposed that all Rusal board members, including independent directors, gain the right to refer interested-party deals to shareholders for approval, the source said. But he said the exchange again declined to back the proposal on the grounds that it runs against accepted corporate governance practices and again traversed the principle of equality for all shareholders as the biggest shareholders would, via their representatives, have more opportunity to take up this right than the owners of minority stakes.
"From the outset, none of the other board members backed the Sual proposals, and the exchange was against them too. Ultimately, Sual withdrew its request for an EGM. Now it has adjusted its proposals, but the exchange is still against them," the source said.
Rusal said it expected a board meeting would be convened following consultations to discuss the Sual request.
Sual Partners has been in the midst of an open dispute with Rusal's principal shareholder and CEO Oleg Deripaska for several months. In March, Vekselberg announced he was stepping down as chairman of the board at Rusal, a post he had held since the formation of the merged company, and leaving the board altogether due to disagreements with the actions of management. Sual launched a number of court actions, including arbitration proceedings in London in regard to long-term contracts Rusal signed with international trader Glencore for supplies of primary aluminum and alumina, the total value of which Sual estimates at $47 billion. The contracts were approved in violation of Sual's veto right under the shareholder agreement, Sual claims.
Sual is also battling Rusal in Russian courts, accusing Rusal Global Management and Deripaska personally of inaction concerning compensation of losses at the Sayanogorsk Aluminum Smelter (SAZ) related to the collapse of a bridge across the Abakan River in May 2011. The bridge, owned by companies controlled by Deripaska, is used to deliver raw material to the smelter and ship out finished product.
In addition, Vekselberg's IES Holding and Rusal had a disagreement over the specifics of a deal to sell the Bogoslovsk CHPP to the aluminum company.
UC Rusal was formed in 2007 with the merger of Rusal, Sual and the alumina assets of Swiss commodities trader Glencore. The principal beneficiary of the company, whose shares and Russian depositary receipts are traded in Hong Kong and Moscow respectively, is Oleg Deripaska with 47.4%. Mikhail Prokhorov's Onexim owns about 17%, Sual Partners holds 15.8%, Glencore has 8.75%, and Vnesheconombank (VEB) holds about 3% of shares.