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. Last Updated: 07/27/2016

Court Bailiff Halts Yukos Meeting




A court bailiff forced oil giant Yukos on Tuesday to halt a shareholders meeting it had called for subsidiary Tomskneft to dilute its shares.


"We are a law-abiding company," said Yukos spokesman Andrei Krasnov in a telephone interview given not long after the bailiff showed up at Yukos' Moscow offices to serve official notice of a Tomsk court ruling that the meeting must be canceled.


Yukos did show some defiance by voting after receipt of the court order to postpone the meeting until March 29. However, the cancellation order means that a meeting on that date would only be possible in the event of Yukos winning an appeal against the Tomsk court's ruling. Otherwise Yukos would have to file for a new meeting, meaning a 45-day delay.


An independent minority shareholder, apparently acting in concert with American investor Kenneth Dart, had sued Yukos over alleged violations at a previous meeting, and a Tomsk court found in their favor last Wednesday.


Dart's company Acirota, which holds a 13.6 percent stake in Tomskneft, has been at loggerheads with several Russian oil companies in past years and just last Friday settled a spat with oil holding company Sibneft over a share swap.


Acirota President John Papesh on Tuesday hailed the cancellation of the Tomskneft meeting, saying, "This is a good day for the rule of law and shareholder rights in Russia."


Krasnov blasted the decision as "another attempt on the part of a number of small shareholders to prevent Tomskneft from operating normally" that will "negatively affect the company's business reputation and won't do shareholders any good."


The new issue, which Yukos intends to sell to several offshore companies, would dilute minority shareholders' stakes several-fold.


Yukos also wants shareholders to approve several unpopular measures such as setting a fixed ruble price on the oil it buys from Tomskneft and authorizing all of the management's past and future decisions, a Dart spokesman said.


Although Dart has won a reprieve in the Tomskneft dispute, he faces a more difficult fight over his company's stakes in two other Yukos subsidiaries, his representative said.


"Clearly, the stakes are at risk because Yukos is going to propose [share dilutions] at the meetings," said Michael Hunter, head of Dart Management Inc.


Yuganskneftegaz and Samaraneftegaz, in which Dart holds 12 percent and some 10 percent of the shares, respectively, are slated to hold shareholders' meetings at the end of this month.Yukos could face difficulties in pushing through these dilutions because a 75 percent block is needed to vote through such measures and it does not control that many shares in either firm.


Dart is confident that if the other minority shareholders in Yuganskneftegaz and Samaraneftegaz work with him, they can head off Yukos' plans, said Hunter.


If proper voting procedures are followed, Yukos' attempts to dilute minority holders' stakes will not take place, he said.


Tomskneft differs from the others because Dart has likely allies in the Tomsk administration and the federal government, analysts said. The federal government is investigating allegations that the controlling stake in Tomskneft originally held by Eastern Oil Co. had been transferred offshore. The Russian state holds a 34 percent stake in Eastern Oil.


"Tomsk regional authorities want to have an influence on Tomskneft and participate in the distribution of its profits, they want to have more weight in the company," said Alexander Agibalov, an oil analyst with the investment company Aton.


"It is difficult to predict an ultimate victory of Acirota, but there is no doubt that their active position is likely to gain them all sorts of dividends, like in the case with Sibneft," added Yelena Krasnitskaya, corporate governance analyst at Troika Dialog.