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. Last Updated: 07/27/2016

Paper: London Court Freezes Chigirinsky Assets

MTShalva Chigirinsky
A London court has frozen the 44 percent stake in London-based Sibir Energy belonging to brothers Shalva and Alexander Chigirinsky, Kommersant reported Saturday.

The High Court of Justice late Thursday froze the stake following a request by Harley Street Capital Ltd., which represents minority shareholders. If the Chigirinskys attempt to sell the shares they will face a ?30 million ($57 million) fine or jail time, the paper reported.

Harley Street Capital on Thursday filed suit against the brothers and their offshore holding company Bennfield Ltd. for violating minority shareholders' interests by redistributing shares in Sibir Energy subsidiaries Yugraneft and Magma Oil, Kommersant reported, citing an unidentified source close to the company.

Until last year, Yugraneft had an 50-50 joint venture with Sibneft called Sibneft-Yugra, which holds licenses to three oil fields in Khanty-Mansiisk autonomous district. As a result of an additional share issue by Sibneft in the joint venture last year, Yugraneft's stake was diluted to almost zero.

Sibir Energy then started bankruptcy procedures for Yugraneft to recover 50 percent of the Sibneft-Yugra joint venture, the paper said.

Sibir Energy holds 40 percent of Moscow Oil and Gas Co., MNGK, with the remaining 60 percent owned by City Hall. MNGK, in turn, is a major shareholder in the Moscow Oil Refinery.

To compensate it for assets lost in Yugraneft, Sibir Energy gave MNGK a 95 percent stake in Magma Oil and paid $4.8 million, Kommersant reported. The total value of the compensation is estimated at $180 million. On Wednesday, MNGK's board voted to decrease Sibir Energy's share in the company to 40 percent from 45 percent.

Neither the court nor Sibir Energy was available for comment Monday due to public holidays.