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. Last Updated: 07/27/2016

Deripaska Loses UES Board Bid

ZELENOGRAD, Moscow Region -- Metals tycoon Oleg Deripaska failed in his bid to be elected to the board of Unified Energy Systems, headed by his rival Anatoly Chubais.

The new 15-member board voted in at the UES annual shareholder meeting Wednesday counts 10 government representatives, as well as five strategic investors --Yevrazholding, Gazprom, ESN Energo, Interros and MDM Bank.

"We are more than satisfied with the results of the meeting," UES CEO Chubais said at a briefing. "There were no strategic changes in the board of directors and this is good."

But Chubais did say he regrets that Seppo Remes, director of Vostok Nafta Investment, and David Herne, managing director of Halcyon Advisors, were not elected. Both men have served on previous UES boards.

At the same time Chubais welcomed the election of strategic investors such as Gazprom executive Kirill Seleznyov and ESN Energo general director Grigory Beryozkin, without elaborating.

Asked whether it was positive that neither Russian Aluminum owner Deripaska nor his representative and former UES board member David Geovanis was re-elected to the board, Chubais only said: "This is a fact."

Deripaska has said that he is against the government selling wholesale generation companies, a crucial component of energy sector reform.

Last week, Fradkov said that the government will decide the issue no earlier than the end of this year, triggering an immediate drop of 4 percent in UES shares. Some analysts predict the stock price could fall as much as 50 percent in coming months.

Geovanis, who lost to a government representative by a small margin, said on the sidelines of the meeting that even without a board seat, RusAl had accomplished its task of "not letting Chubais sell generation companies to his friends."

Chubais said that even a one-year delay of the reform is not a "tragedy" -- as long as it is carried out as agreed.

"[The drop in share price] proves the obvious: the market supported the reform ... a step away from the reform leads to a drop in capitalization," Chubais said.