Glass Lewis advises Norilsk Nickel shareholders to vote for Bebchuk, Holden
MOSCOW. Feb 24 (Interfax) - Glass Lewis is recommending that shareholders in MMC Norilsk Nickel elect Gerard Holden and Lucian Bebchuk to the board of directors at an EGM on March 11, UC Rusal said in a statement.
The consultancy recommended that the shareholders vote in favor of electing a new board of directors at Norilsk Nickel.
Rusal nominated Bebchuk, who is Professor of Law, Economics and Finance, Director for Corporate Governance Program, Harvard University. Holden, who is Chairman, Verivox Ltd, GCM Resources Plc, is an independent member of the current board of directors.
Glass Lewis says that in its view, a new board with additional competent independent directors would be able to exercise effective control over management and achieve a balance in which neither of the key shareholders on their own would be able to control decision-making on the board.
Glass Lewis backs three of the independent directors nominated, the third being Terrence Wilkinson, nominated by Rusal. But the consultant recommends voting lonely for Holden and Bebchuk so as to avoid votes being dispersed among the minority shareholders.
Glass Lewis considers that if independent candidate Alexander Voloshin is elected to the board as well as Holden and Bebchuk, then the board would have at least three independent members, which the consultant says would be a marked improvement on the current board.
Rusal said it welcomed the Glass Lewis recommendations.
Glass Lewis, according to Rusal's statement, also considers that criticism of Norilsk Nickel, primarily concerning the lack of transparency with the sale of shares to commodity trader Trafigura; and Norilsk Nickel management's inability to involve the board of directors in decision-making, are justified. Glass Lewis also criticizes the model for voting with Norilsk Nickel quasi-treasury shares as running counter to the spirit of the law. It says management must not in any circumstances vote with treasury shares or, in this case, quasi-treasury shares.
Glass Lewis gave the same recommendations ahead of the last EGM at which Rusal tried to elect a new board of directors at Norilsk Nickel.
ISS Proxy Advisory Services (ISS) has recommended that Norilsk Nickel's shareholders vote in favor of the early termination of authorities of the current board of directors and to vote to re-elect independent board members Brad Mills and Gerard Holden.
Vladimir Potanin's Interros nominated Holden, who is Chairman, Verivox Ltd, GCM Resources Plc. and Advisor, Rockbury Capital FZ LLC (Private); and Mills, General Director of Mandalay Resources, Executive Director of Plinian Capital Plc.
ISS recommended ahead of an EGM on October 21, 2010 that shareholders vote for Holden, who was nominated by Norilsk Nickel subsidiaries, Rusal and Interros; and Terrence Wilkinson, nominated by Rusal. ISS did not recommend voting for Mills, who was nominated by the Norilsk subsidiaries and Interros. It said at the time that Rusal had doubts over the extent of Mills' independence, although it did not produce any evidence, and Mills intended to go to court to defend his reputation.
Rusal said it was happy with the latest ISS recommendations also.
Interros has nominated five candidates for the Norilsk board: John Lindquist, Senior Advisor at Boston Consulting Group, Non-executive Director, Kuoni Holdings Ltd, Independent Non-executive Director, VAO Intourist; John Fast, Co-founder and Co-director, Dragoman Pty Ltd, member of the Australian Government Takeovers Panel, Chairman of the Rotary Aboriginal and Torres Strait Islander Tertiary Scholarship Advisory Board, CEO and Managing Director, Fast Family Group of Private Companies; Vasily Titov, First Vice President - Chairman of the Management Board of OJSC VTB Bank ; Gerard Holden, Chairman, Verivox Ltd, GCM Resources Plc.; Advisor, Rockbury Capital FZ LLC (Private); and Bradford Mills, General Director of Mandalay Resources, Executive Director of Plinian Capital Plc.
UC Rusal nominated eight candidates: Lucian Bebchuk, Professor of Law, Economics and Finance, Director for Corporate Governance Program, Harvard University; Alexander Voloshin, Member of the Board of Directors, Public Limited Liability Company Yandex N.V.; Artem Volynets, CEO, En+; Oleg Deripaska, CEO of UC Rusal and Basic Element Company LLC; Terrence Wilkinson, Independent Director, Triland Metals LLC.; Oscar Ratsin, Head of Corporate Finance Unit, Sberbank ; Nathaniel Rothschild, Chairman, JNR LLC; Non-executive Director, En+, Barrick Gold Corporation; Co-chairman, VALLAR Plc; Maxim Sokov, Director for Strategy and Corporate Development, UC RUSAL.
Metalloinvest, which unofficial reports say owns around 4% of Norilsk Nickel's shares, nominated Ardavan Moshiri, Head of Strategy and Business Development Department, Metalloinvest Trading AG. Metalloinvest did not nominate anybody for the board last year.
Dutch commodities trader Trafigura Beheer nominated Simon Collins, member of the Management Board, Trafigura Beheer B.V.; and Claude Dauphin, Member of the Management Board, Trafigura Beheer B.V. (Group), member of the Management Board, Ecore B.V. Norilsk Nickel subsidiaries reached an agreement in December to sell 8% quasi-treasury shares to Trafigura.
Norilsk Nickel's management nominated three candidates: Vladimir Kantorovich, Chairman of the Coordination Council of the Group of Pension Funds; Andrey Klishas, President, MMC Norilsk Nickel; Vladimir Strzhalkovsky, General Director - Chairman of the Management Board, MMC Norilsk Nickel.
The list of board candidates also includes South African investment banker Enos Ned Banda, Founder & CEO, Freetel Capital (PTY) Ltd. Interfax sources say Norilsk Nickel may have nominated Banda as an independent candidate.
The board currently contains four Norilsk Nickel managers - Andrey Klishas, Dmitry Kostoev, Oleg Pivovarchuk and Vladimir Strzhalkovsky; three Rusal representatives - Oleg Deripaska, Maxim Sokov and Vladislav Soloviev; three Interros representatives - Andrei Bugrov, Marianna Zakharova and Boris Bakal; two independent members - Brad Mills and Gerard Holden; and VTB's Vasily Titov, who was nominated by Interros and who chairs the board.