15.02.2008 Russia, Krasnoyarsk. 5th Krasnoyarsk economic forum "Russia 2008 - 2020. Management of growth". Head of Basel (Basic Element) Oleg Deripaska is shown during a session.
Photo: Alexander Miridonov
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Rusal Drove MMC Norilsk Nickel to the Verge of Ecological Catastrophe
Not only did electing former head of the Federal Tourism Agency and Vladimir Putin’s KGB colleague Vladimir Strzhalkovsky as Norilsk Nickel’s CEO fail to put an end to the mutual claims of the MMC shareholders, it fueled the tensions that had raged between the company’s co-owners. Last week the situation complicated as Rusal unexpectedly proposed its ecological initiatives, which concern Norilsk Nickel’s modernization.
It need be reminded that on August 7, ahead of the Norilsk Nickel board meeting, Oleg Deripaska (his Rusal owns a block share of the MMC) deliberately summoned journalists to claim that the three Rusal representatives with the MMC board would not support the appointment of former head of the Federal Tourism Agency Vladimir Strzhalkovsky as the nickel company’s CEO. Mr Deripaska explained that he sees no political risks to the MMC, which would justify a staff management decision of that kind. Besides, according to Mr Deripaska, Vladimir Strzhalkovsky has no work experience. It seems to be the first time Mr Deripaska is reluctant to hire a state official, who’s considered Vladimir Putin’s close friend. Moreover, Rusal issued a press-release reading that the MMC’s key owner – Interros – violates the law because, allegedly owning over 30% of Norilsk Nickel’s shares, it hasn’t made the necessary buy-back offer to the minor shareholders. Vladimir Strzhalkovsky, who seemed to be a neutral manager invited by Interros and who has government contacts at the same time, appears to have failed to reconcile the MMC’s shareholders. Moreover, the fissure only got deeper. Challenging Rusal, the MMC board appointed the former head of the Federal Tourism Agency as the company’s CEO. The board decided to abstain from directly participating in the Udokanskoye copper field development tender planned for September 17 – it will participate in the project in cooperation with the future winner only. The MMC will have this chance only if Alisher Usmanov’s Metalloinvest wins the tender (Oleg Deripaska refused to cooperate with the company). Interestingly, Rusal representatives voted for the MMC’s direct participation in the Udokan tender. Also, Rusal CEO Alexander Bulygin doubted “Mr Strzhalkovsky competence as head of a big company”. The newly elected director said in response that he had a long conversation with Oleg Deripaska, whom he listened “with interest”. Answering a question whether he was Vladimir Putin’s close friend, Mr Strzhalkovsky said evasively that Mr Putin “should know better who his friends are”.
Rusal hopes to rectify the situation when the next board elections are held. Last week Rusal launched preparation work to win over the minority shareholders emphasizing that a crisis is impeding in the MMC. Mr Strzhalkovsky, who is suspected of lack of competence by Oleg Deripaska’s company, received a letter, where Rusal expressed its concerns over the ecological situation with the MMC’s enterprises and informed that “the environmental state in Norilsk is on the verge of catastrophe”. It also offered its help in the company’s ecological modernization. Norilsk Nickel denied the “catastrophic state of affairs” and rejected Rusal’s help explaining it with a plan to launch its own environmental program, which envisages allocating over 36 billion rubles for environmental projects from 2007 to 2015. It’s not ruled out, however, that the aim of the offer is probing the intentions of Mr Strzhalkovsky regarding cooperation with the shareholder that voted against him. Second, an unfavorable assessment of the situation at the MMC can make Norilsk Nickel’s minor shareholders sell the stocks of company, which is not under Oleg Deripaska’s control yet. But he can make up for it buying up stocks when minor shareholders begin selling them. They can find the reasons for it without ecology proper: in the first half of this year Norilsk Nickel announced a decrease in its profits by 19 times – to 4 billion rubles.
Dmitry Polonsky
All the Article in Russian as of Aug. 18, 2008
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