Russian tycoons face off at Norilsk meeting

MOSCOW （AP） — Shareholders in Russian mining company Norilsk Nickel voted Thursday to keep the current board of directors, turning back an attempt by one of Russia's richest men to gain more influence over the world's largest nickel producer.

The vote dealt a blow to Oleg Deripaska's ambitions to get more control over Norilsk and its cash flows, but looks sure to drag out months of wrangling between him and rival Vladimir Potanin, who have accused each other of using Norilsk for their own ends.

Each owns a 25 percent stake, but Potanin has four seats to Deripaska's three.

Nearly 47 percent of shareholders voted for no change to the board, while only 38 percent wanted new executives, the board's chairman Vasily Titov told reporters.

Uncharacteristically for the Russian corporate world, the outcome depended on minority shareholders — who own 37.5 percent of shares. Both Potanin and Deripaska have spent the past months courting the investors in a hope to gain their support.

Deripaska, who counts aluminum giant Rusal among his assets, lost influence on the Norilsk board in June when it failed to elect four directors that Rusal had nominated.

Rusal called a fresh meeting in a bid to reverse the June vote which it claimed was rigged by Potanin's investment vehicles Interros and Norilsk. The two companies denied any wrongdoing. A probe into the vote by Russian prosecutors uncovered irregularities in the way it was conducted but found no crime.

Rusal has been supported by two advisory firms, ISS Proxy Advisors and Glass, Lewis & Co, which recommended dismissing the board and bringing in new members. ISS said in a statement last month that the influence of Interros is "of concern" and described the possibility of collusion between Interros and Norilsk's management as "a potentially troubling development."

Norilsk's Titov insisted that the board was not "hostage to the situation" and urged on the warring tycoons to make up.

"I think they can and must agree about what to do next," he said. "It's wrong to talk about winners and losers here. What's important is that the company is operational and its board of directors continue working."

Rusal, however, hinted that it was not going to give up easily. It thanked minority shareholders for their support but insisted that the voting pattern at the meeting "indicates that under Interros' influence the executive management voted with Treasury shares to prevent minority investors from electing new, independent non–executive directors."

Rusal argued earlier that it lost the June vote because Norilsk management — which owns 8.5 percent of Norilsk in treasury shares — used them to oust Rusal's representatives. Treasury shares are shares the company has bought back but not canceled.

While companies in Russia are not barred from voting with their own treasury shares, many investors consider this to be bad corporate governance practice.

Rusal said it will "continue to closely work with the company's minority investors in order to elect a truly balanced board of directors to represent the interests of all shareholders," the company said in a statement.

Asked whether it is going to appeal Thursday's vote, the company told The Associated Press （News - Alert） that it "will analyze Thursday's vote and will make decisions regarding our further actions afterwards."

Norilsk independent director Bradford Mills welcomed the meeting's outcome, saying that shareholders had voted against the company's "destruction".

"What we need to do is focus on how we keep making this business better," he told reporters after the meeting. "And we need both of these big shareholders to help us, and not fight with each other."