We were quite surprised to read this morning the news of Viktor Vekselberg’s resignation from the chairmanship of Russia’s aluminum giant, Rusal, taking the dispute with Oleg Deripaska to the next level.
Vekselberg, who is the 8th richest man in Russia with a fortune of $12.4 billion, has been in a protracted struggle with Deripaska and other shareholders for control of the company that has spilled out in dozens of various lawsuits. Upon departing the company, Mr. Vekselberg fired away at the company’s mismanagement, citing impending crisis over an excessive debt load. According to the journalist John Helmer, “It is unprecedented in Russian business for the chairman of the board of a major Russian company to make a public attack on the competence and propriety of the chief executive. (…) It is also unprecedented for Russian businessmen of Vekselberg’s financial size to resign in protest. They usually come to terms with their antagonists or rivals in a sale and purchase transaction that buries acrimony and buys silence.”
According to a note circulated by Alpha Bank:
Viktor Vekselberg’s resignation as Chairman of the Board of Rusal marks a ratcheting up of the ongoing conflict between shareholders. Frustration has risen over refusal to sell the Norilsk stake and use of available cash at Rusal, as well as due to unfavorable regulatory changes. This move decreases the likelihood of positive regulatory changes and increases share sale pressure, while slightly improving the prospects for a disposal of the Norilsk stake. On balance, we view the development as negative for the stock.
Below is his resignation statement as posted to the Renova Group website:
“It is with great regret that I have to state that, due to the actions of its management, UC Rusal is presently facing a deep crisis, as a result of which UC Rusal has, in my opinion, deteriorated from an international aluminum leader into a company overburdened with debt and entangled in numerous lawsuits and social conflicts,” – commented on his resignation Victor Vekselberg. “As Chairman and director, I disagreed with a number of decisions in relation to the company’s strategic development, modernization of production and social and human resources policies, some of which were adopted by management without Board approval and in breach of shareholder agreements. In view of this, I do not consider it appropriate to maintain my current position as the Chairman and a director of UC Rusal’s Board.”