AAR Threatens Suit Over Meeting It Led

The Russian billionaires who own half of TNK-BP threatened new legal action against BP on Thursday for not following their wishes at a shareholders meeting presided over by one of their own representatives.

The Russian shareholders -- known as AAR, after Mikhail Fridman and German Khan's Alfa Group, Len Blavatnik's Access Industries and Viktor Vekselberg's Renova -- said they were considering legal action after the annual general meeting of TNK-BP Holding, the firm's main operating subsidiary, approved a list of board members from which they asked to be excluded.

Shareholders approved the reappointment of the firm's nine board members, with four representing AAR's interests and five for BP. Each side owns 50 percent of TNK-BP, the country's third-largest oil firm.

The meeting was chaired by Igor Maidannik, head of TNK-BP's legal department and a board member of TNK-BP Holding who represents the interests of AAR, a TNK-BP spokeswoman said.

AAR had asked that their four representatives, whom they said last week were the target of BP pressure to step down, be excluded from the list. Maidannik is one of the four, alongside Boris Kondrashov, a vice president and head of security, Alexander Gorshkov, vice president for government relations, and board member Roman Bezrukov.

The Russian shareholders had threatened to boycott the meeting but reversed course late Wednesday and said their representatives would attend.

"The shareholders voted for the whole list. It's a separate matter for those people who wrote letters indicating they want to step down. Nothing prevents them from doing so now," TNK-BP spokeswoman Marina Dracheva said.

AAR has filed a suit against TNK-BP in Tyumen charging that a June 3 board meeting that preliminarily approved the board list was held illegally.

They had also threatened to bring a lawsuit against BP in Stockholm, as per TNK-BP's shareholder agreement, by Thursday's meeting, challenging the employment of some 150 foreign BP employees contracted to TNK-BP.

An AAR spokesman said the suit in Stockholm had not been filed and did not know whether or when it would be.

In interviews over the past two weeks, the AAR shareholders have accused BP of seeking to push them out in favor of state-run Gazprom. BP has in turn accused AAR of attempting to wrest control through tactics reminiscent of "corporate raiding." Both sides deny any intention to sell their stakes.

Attendees at Thursday's meeting also approved the issuance of additional dividends of 27.9 billion ($1.2 billion), bringing 2007's total payout to 49.6 billion rubles following an interim issue paid out in the first half of the year.

TNK-BP Holding is 95 percent owned by TNK-BP, with a 5 percent free float.

They also approved the firm's 2007 financial results, with net revenue for TNK-BP Holding standing at $24.9 billion in 2007 and net profit at $5.7 billion.

AAR CEO Stan Polovets said last week that their discontent with BP arose over disappointment with the 2008 business plan and a low dividend proposal, as well as weak financial results.