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. Last Updated: 07/27/2016

Managers, Alfa Battle for Control of Metals Plant

The Wild East is far from tamed.

The No. 5 pipe producer Taganrog Metals Plant, or Tagmet, has accused Alfa Group of attempting an armed takeover of the plant one day after signing an agreement pledging to avoid using force.

Tagmet says Alfa subsidiary Alfa-Eko M descended on the plant with OMON police and private security Saturday, violating a "no use of force" clause, thus negating an agreement signed by the two parties Friday.

The agreement was a step toward ending the struggle for control between Alfa-Eko M and Tagmet management, which has been simmering since 2000. The agreement created an opportunity for either side to buy out the other depending on price, Tagmet board chairman Nikolai Orlov said.

"It was done to resolve the issue because Alfa has frequently proposed one thing, then changed the conditions," he said.

According to Tagmet, Alfa-Eko M owns 25 percent of the plant and is in cooperation with the owners of another 16.7 percent, while Tagmet management controls 56 percent.

The two sides intended to hire PricewaterhouseCoopers to audit and value the plant. Tagmet management claims the plant is worth $300 million, news agencies reported, while Alfa-Eko said it is worth only about a fifth of that and has accused Tagmet management of "intensive asset stripping."

Alfa-Eko M has denied it used force at the plant.

Alfa-Eko M vice president Igor Baranovsky said a court marshal arrived at the plant to present papers demanding management be passed over to Alexander Gorshkov, who was elected general director at an extraordinary shareholders meeting March 5.

Baranovsky said the court marshal left peaceably after being turned away by the plant, Interfax reported.

The shareholders meeting at which Gorshkov was elected was called by Janow Properties Ltd., a company affiliated with Alfa-Eko M. The shareholders also voted 11 Alfa-Eko M representatives to the board.

However, Tagmet management's shares were not voted, and the plant won a stay of execution March 28 in a Moscow region court forbidding general director Sergei Bidash from abdicating in favor of Gorshkov.

A group of 40 Tagmet employees, veterans and union members met with Viktor Kazantsev, the presidential envoy to the Southern Federal District, on Monday to petition him to ensure that the annual shareholders meeting scheduled for April 15 takes place.

"Everywhere Alfa has been is now in ruins. We are worried about the factory," Tagmet union representative Konstantin Tkachenko said in a press release issued by the Southern Federal District.

Kazantsev promised to watch the proceedings to ensure everything complies with the law. He will meet with Alfa-Eko M representatives Saturday.

According to Tagmet management, Alfa-Eko M has called for another extraordinary shareholders meeting Tuesday and again April 14, the day before the scheduled annual shareholders meeting.

"The meeting will show what Alfa plans to do," Orlov said.

Alfa-Eko M could not immediately provide comment Monday.