© Reuters. FILE PHOTO: Aluminium ingots are seen stored at the foundry shop of the Rusal Krasnoyarsk aluminium smelter in Krasnoyarsk, Russia October 3, 2018. Picture taken October 3, 2018. REUTERS/Ilya Naymushin/File Photo
MOSCOW (Reuters) – Russian aluminium producer Rusal said on Monday it has filed a lawsuit in London alleging Vladimir Potanin, CEO of metals giant Norilsk Nickel, is in breach of a decade-old deal, renewing a row between two of Russia’s largest metals companies.
Moscow brokered a 10-year accord between Nornickel’s two largest shareholders in 2012 – Potanin and Rusal, then controlled by Oleg Deripaska – protecting its dividend payouts with a formula based on a ratio of its debt and earnings.
The deal expires at the end of this year.
In a statement, Rusal, which holds a 26.2% stake in Nornickel said that the lawsuit, filed in London’s High Court of Justice on Oct. 21 against Potanin and his affiliate Whiteleave Holdings Ltd, is aimed at protecting the interests of the company’s shareholders.
The statement said: “Rusal’s claims are based on Mr. Potanin’s failure to fulfil his duties as Norilsk Nickel’s managing partner and CEO. Under the management of Mr. Potanin, Norilsk Nickel lost a number of assets that played a key role in group’s activities. This resulted in Norilsk Nickel and its shareholders suffering significant losses.”
The pair, who are two of Russia’s most powerful businessmen, had previously clashed over how much profit should be returned to investors and how much should be invested in Nornickel. Potanin’s holding, Interros, owns 36% of Nornickel.
The Interros Group was not immediately available for comment.
The feud over one of the biggest prizes in the post-Soviet carve-up of Russian industry dates back to 2008 when Rusal bought a stake in Nornickel for $14 billion and Potanin opposed attempts by Deripaska to merge the two companies.
In July, Potanin in July floated the idea of a $60 billion merger of Nornickel with Rusal as a means of mitigating possible sanctions risks, but he said last month the idea had been postponed.
He also said the 10-year shareholder agreement protecting Nornickel’s dividend payouts was on track to expire at the end of 2022. Sources had told Reuters there are no talks to renew the deal.