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. Last Updated: 07/27/2016

Sibneft Locked Out of Meeting

Roman Abramovich's Sibneft said Wednesday that it was denied entry to a meeting of creditors in a company owned by rival Sibir Energy, the latest twist in an ongoing legal dispute between the two companies.

As a creditor in Sibir Energy unit Yugraneft, Sibneft sent five lawyers to attend the creditors' meeting, which had been scheduled for 8:30 p.m. Tuesday, Sibneft spokesman John Mann said.

They were barred by security guards from entering the building in central Moscow where the meeting was to take place without any reasons given, Mann said.

Mann said Sibneft and affiliated companies held $40 million, or 64 percent, of Yugraneft's debt. Last week, the Moscow Arbitration Court confirmed Sibneft as a creditor of Yugraneft. Sibir Energy does not recognize that debt.

The incident comes in the middle of a legal dispute between the two companies over the Yugraneft unit, which is now under bankruptcy protection.

The dispute, which dates back to May 2004, is over the ownership of Sibneft-Yugra, set up by the two companies as a 50-50 joint venture in 2000. Valued at $4 billion, the joint venture is developing the South Priobskoye oil field in Western Siberia.

Sibir Energy held its stake in the venture through its Yugraneft subsidiary. Sibir claims its stake has been reduced to just 1 percent without its knowledge.

"While Sibir is broadly publicizing their contention that they have been wronged by Sibneft, which we strongly deny, they appear to have carried out a clear violation of bankruptcy law by barring us from participating in this creditors' meeting," Mann said.

"What happened is a complete mystery to me. I was unaware of that," Sibir Energy CEO Henry Cameron said by telephone Wednesday.

A spokeswoman for Sibir Energy said later in the day that Sibir representatives had not been allowed into the meeting either but did not explain why.

The meeting was to take place in a building where Sibir Energy has its offices.

Yugraneft's bankruptcy administrator, Mikhail Kotov, who was in the building Tuesday and had called the meeting, was not available for comment.

With regard to the ongoing dispute, Sibneft claimed that the dilution of Sibir's stake was legal and part of earlier agreements between Sibneft and Sibir Energy shareholders. It refused to elaborate due to ongoing litigation between the companies.

Companies registered in the British Virgin Islands now hold Sibir Energy's former 49 percent stake in the joint venture. A British Virgin Islands court last week ruled that the share must be put in the hands of a receiver.

Sibneft's Mann said Wednesday that the British Virgin Islands court ruling would be contested but refused to elaborate.