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. Last Updated: 07/27/2016

LogoVAZ Dealt Blow in Transaero Spat




The LogoVAZ car dealership network appears to be losing the battle for control over Russia's largest private airline, Transaero.


A Moscow court has frozen its shares in Transaero and the Anti-Monopoly Ministry said Friday it would investigate the airline's ownership structure to uncover possible violations by LogoVAZ.


Last week, LogoVAZ was struck off the list of Transaero shareholders by a Moscow arbitration court, which ruled that the car company's acquisition of a 12.3 percent stake in the airline in May 1997 violated Russia's anti-monopoly laws.


According to the court, LogoVAZ had not received permission from the Anti-Monopoly Ministry to purchase the stake which, together with shares held by affiliated companies, gave it a controlling 55 percent interest in Transaero.


According to Russian law, anyone purchasing more than 20 percent of a company must seek permission from the anti-monopoly authorities.


The court decision is a major victory for Transaero founder Alexander Pleshakov in his year-long war against a group of outside shareholders led by LogoVAZ. The two sides have held separate shareholder meetings and each has elected a president and a chairman.


LogoVAZ plans to appeal the ruling, which was based on a Jan. 15 order by the Anti-Monopoly Ministry.


"The ministry's position is groundless," said Vladislav Vershinin, a LogoVAZ representative who was appointed Transaero spokesman by the rebel faction. "We received permission to purchase these shares in May 1997, when three other companies were allowed by the committee to obtain a 32.7 percent stake.


"Nothing but common interest connects LogoVAZ with the other shareholders," Vershinin said, adding that LogoVAZ is acting out of concern for the airline, which is losing "huge amounts" of money daily.


Many would beg to differ. LogoVAZ belongs to tycoon-turned politician Boris Berezovsky. He is also known to control Obyedinyonny Bank, which owns 11.03 percent of Transaero and is widely believed to be linked with several other small shareholders.


Transaero says the ownership fight is fueled by the airline's main competitor, Russia's flagship carrier Aeroflot. It is rumored that Berezovsky owns a stake in Aeroflot, although that cannot be confirmed.


An Anti-Monopoly Ministry official said Friday that the ministry plans to investigate how LogoVAZ-affiliated shareholders together accumulated over 40 percent of Transaero without notifying the authorities.


"Back in 1997, we were satisfied no anti-monopoly laws were being violated, but later investigations showed LogoVAZ had held back information," said the official, who requested anonymity. "LogoVAZ may not formally own shares in these other companies, but they are undeniably connected."


Pleshakov's court victory marks a high-profile setback for Berezovsky, who has lost much of his political influence since last year's financial crash that undermined his business empire.


"All this is connected to a certain oligarch who shall remain unnamed," Transaero wrote in a gleeful press statement. "But for the first time LogoVAZ found itself helpless despite all its oligarchic power."


In response, Vershinin accused Pleshakov of using his own government connections to secure the Anti-Monopoly Ministry's support.


"The ministry's decision was clearly the result of lobbying by Pleshakov and Mrs. Anodina [Pleshakov's mother who heads the CIS Aviation Committee]," he said. Transaero officials say they are prepared to meet LogoVAZ and its partners in court or in the boardroom.


"By freezing LogoVAZ's 12 percent stake, the court has deprived the outsiders of control," said Sergei Bykhal, a Transaero media adviser. "That changed the balance within the company."