RUSAL threatens to sue in chairman row

RUSAL, the world's No 1 aluminium producer, said comments by former chairman Viktor Vekselberg had damaged its reputation and shareholder value, and threatened unspecified legal action. Hong Kong-listed RUSAL also on Sunday shrugged off criticism of its choice of Hong Kong Mercantile Exchange chairman Barry Cheung for the same role at the Russian company.
Russian oligarch Vekselberg quit as RUSAL chairman last week in a row over strategy with Oleg Deripaska, the main shareholder and another Russian billionaire, saying at the time the company was in "deep crisis" and overburdened with debt.
Vekselberg's investment firm, Sual Partners, said on Friday after news of Cheung's appointment, that RUSAL had failed to conduct a thorough candidate search and should be chaired by a Russian citizen as most of its assets were in the country.
"Barry Cheung's election as a chairman was supported by a majority vote of the Board, including the independent directors. This proves that his candidacy meets the interests of all shareholders, including minorities," RUSAL said. RUSAL was due to report fourth-quarter results on Monday, expected to show a fall in earnings and core profit on the back of lower aluminium prices.
The boardroom row has exposed a rift over how to unburden RUSAL of an $11 billion debt burden inherited from its $14 billion purchase of a quarter of Russian miner Norilsk Nickel at the top of the market in 2008.
Vekselberg, who with partner Len Blavatnik owns 15.8 percent of RUSAL via Sual, had supported offers made by Norilsk to buy back the stake for as much as $13 billion.
He was backed by billionaire politician Mikhail Prokhorov, whose investment firm Onexim has a 17 percent stake. They have been consistently overruled by Deripaska, who owns 47.4 percent of RUSAL and enjoys effective control, since Norilsk offered to buy the stake in December 2010.
The stake in the highly-profitable nickel and palladium miner is now worth $9.5 billion, accounting for most of the $11.1 billion market capitalisation of RUSAL, whose shares have slumped 65 percent from their peak last year.
Vekselberg has also threatened legal action although analysts doubt that litigation - apart from shining a light on the breakdown of his relationship with Deripaska - would loosen Deripaska's grip on RUSAL and its stake in Norilsk.