Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Court Halts Seizure of Assets In Norilsk Nickel Subsidiary

An arbitration court prevented the seizure of assets in a unit of Russia's major metals producer Norilsk Nickel, Norilsk's spokesman said Friday.

On July 1, Deputy Prime Minister Viktor Khristenko said he had ordered the freezing of assets in the Severonikel subsidiary of Norilsk and their seizure if it failed to pay a 250 million ruble ($40 million) tax debt by Aug. 1.

But Norilsk spokesman Igor Plotnikov said the tax inspectorate failed to execute the order after Norilsk appealed to Murmansk Regional Arbitration Court.

"As we disagree with the decision, we have filed a suit and the court ordered the inspectors to keep their hands off Severonikel until the hearing takes place," Plotnikov said.

It was not clear when the court made its ruling.

At the same time, the local governor and the management of the company, supported by trade unions, launched appeals to President Boris Yeltsin and the government in order to prevent Severonikel's bankruptcy, he said.

The governor of the Murmansk region, Yury Yevdokimov, suggested in particular that Severonikel's debt be restructured and repaid by 2002.

Plotnikov said the company considered that the government decision had been taken in haste and without taking into account Norilsk management's position.

"One of our arguments is that the state owes us 230 million rubles as it has failed to return VAT on Severonikel's exports," Plotnikov said.

Under Russian legislation, value- added tax on exports is repaid to the producer after the production crosses the border.

Severonikel, located in European Russia's arctic, smelts about 50,000 tons of nickel per year, which is equal to 17 percent to 18 percent of Norilsk's output.