Director AFK «System» asking Putin to intervene in the dispute with Rosneft

© RIA Novosti / Maxim to Aminopherase in fotomonster Rosneft in Expoforum. Archival photoDirector AFK «System» asking Putin to intervene in the dispute with Rosneft© RIA Novosti / Maxim to Aminopherase the image Bank

Independent members of Board of Directors AFK «System» on June 15 sent the President of Russia Vladimir Putin a letter asking to pay attention to the «alarming situation» associated with the claim of «Rosneft» and its subsidiary «Bashneft» on to the AFC is 170.6 billion rubles, wrote on Monday the newspaper «Kommersant», citing a copy of the letter.

The letter was signed by the former head of the Russian division of KPMG’s Roger Munnings, former economy Minister of Luxembourg Jeannot Krecke, former European Commissioner for trade Peter Mandelson and the founder of the consulting Meade Hall Patrick Clanwilliam. The newspaper’s source close to the Board of Directors, confirmed the direction of writing. In the AFC declined to comment.

In may «Rosneft» has filed a lawsuit, accusing the AFC, owning the «Bashneft» until 2014, causing damage in the reorganization of the company. Following the filing of the AFC stock quotes on the Moscow stock exchange fell by 37%, and the detriment of shareholders and its structures as a result of falling capitalization amounted to 143 billion rubles, indicate the members of the Board of Directors.

The claim is, in their opinion, has hurt not only the AFC, but the Russian investment climate, «greatly increasing the risk perception level and decreasing the predictability of the Russian business environment.» The independent Directors believe the claim of «Rosneft» «unreasonable and irrational» because it is from the AFC require «compensation for ordinary corporate procedures» stipulated by the laws of the Russian Federation, and counting requirements in foreign currency, «basing the final amount of the depreciation of the ruble.» The lawsuit «demonstrates the tendency of some state-owned companies continue to expand their influence on the economy and business climate in Russia, regardless of the methods and consequences of their actions,» the letter reads. This leads to a decrease of competition in the domestic market, the weakening of investor confidence in the Russian economy and, «as a consequence, to reduce the need of Russian investment.»

«Independent Director must act in the interests of AFK Sistema, because if they acted in the interests of «Bashneft» probably no letters would not have written,»— said «Kommersant» press-Secretary of «Rosneft» Mikhail Leontyev. «The public position of independent Directors is extremely vulnerable, because the economic content of the claim that AFK, pretending that she is the owner, just sucked «Bashneft» in the most cynical and absolutely shameless way,» he added.

The President of the Russian Federation the authors of the letter asked «to assist in resolving the dispute», expressing hope for a «fair trial». They note that «the corporate governance standards of the AFC are among the highest in the Russian Federation» and point out that while owning a controlling stake of «Bashneft» AFK sought to implement them in the oil company. Notice how the members of the Board of Directors, the reorganization was approved by an absolute majority of shareholders of Bashneft and its conditions and circumstances were analyzed by reputable investment banks, including Sberbank CIB and Merrill Lynch. Director, write that the time of possession AFC controlling stake in Bashneft tax payments of oil companies to budgets of all levels has tripled, to 1 trillion rubles, and the capitalization increased 7.8 times.

A similar appeal to Putin on June 6 sent the investor protection Association (IPA; is composed of large investment funds). In it the Chairman of the Board Directors, the head of the Fund Prosperity Capital Alexander Branis asked to consider the «appropriateness of treatment in this situation, the attention of the state and involving the mechanisms of interaction with affiliated companies and the business community» that would promote the extrajudicial resolution of the dispute.

A source familiar with the situation, notes that the recovery of huge compensation it can damage the shareholders included in the structure of «Rosneft» and «System», which is why the API is «appropriate». The interlocutors of the newspaper noted that in practice such appeals are usually a bit confused.

The appeal of independent Directors AFK «looks more correct from the point of view of the conduct of the business,» says partner of the law Bureau A2 Mikhail Alexandrov. For example, request management «System» would be perceived as an attempt to stand up for one of the parties, and it looks like the request to draw the attention of the authorities to the problem, he says. But in the public field, the President always distanciruemsa from such issues, indicating that «the decision taken by the court,» recalls the lawyer. According to mister Aleksandrova, this request can run «informal processes» that lead to pre-trial resolution of the dispute.