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. Last Updated: 07/27/2016

Renova Wins in Sulzer Battle

ReutersSulzer chairman Ulf Berg speaking at a shareholders meeting Wednesday.��
ZURICH -- Sulzer shareholders ousted chairman Ulf Berg on Wednesday after he lost the support of billionaire Viktor Vekselberg, the Swiss pump maker's biggest investor.

Investors with about 55 percent of Sulzer's shares voted to remove Berg from the post he held since April 2007. In their annual meeting, shareholders re-elected two Vekselberg representatives to the board.

"I've achieved several things with Sulzer's management and employees but not the confidence of the main shareholder," a tearful Berg, who received a standing ovation from his supporters, said after the vote. "Whatever the reasons, such a lack of confidence could have obstructed Sulzer's long-term development."

Earlier, Berg received support from board member Louis Hughes as well as the company's former finance chief, Erich Mueller, and Ernst Wohlwend, the mayor of Winterthur, where Sulzer is based.

Hughes urged investors to reject the position of Vekselberg's Renova holding company, which opposed Berg and is the leading shareholder in Sulzer and another Swiss manufacturer, Oerlikon. Hughes said Renova should guarantee that it will not push for a Sulzer-Oerlikon merger unless a completely independent Sulzer board agrees.

Renova does not want to control the Sulzer board, which would still be independent without its current chairman, Urs Meyer, the holding company's representative, said at the meeting. Renova is a long-term investor, he said.

Vekselberg has been at odds with Berg since the Sulzer chairman forced him into a standstill agreement that barred a merger with textile machinery maker Oerlikon. Renova, which owns 31 percent of Sulzer and 45 percent of Oerlikon, said it would back the appointment of Juergen Dormann, former chief executive of Swiss machinery maker ABB, as chairman if Sulzer's board proposed him.

Renova faces fresh challenges over its holding in Sulzer, which will no longer be bound by the Oerlikon standstill agreement at the end of May. Switzerland's Finance Ministry said April 6 that it began an investigation into whether Vekselberg, Georg Stumpf and Ronny Pecik violated reporting requirements when they built a stake in Sulzer.

The probe focuses on Renova's April 2007 announcement that it had bought an 18 percent stake and options for another 14 percent of Sulzer together with Victory Industriebeteiligung, which was at the time co-owned by Austrian investors Stumpf and Pecik.

Renova expressed "surprise" that the investigation was announced two days before the board election and after Switzerland's financial regulator found no violation of disclosure rules in the two years since the stake was bought.

Dormann would be willing to take up the post if the board elected him, newspaper Neue Zuercher Zeitung reported March 7, citing an interview. Shareholders would first need to place him on the board. Dormann was not standing for election Wednesday.

Vladimir Kuznetsov, who is Oerlikon's chairman, Renova's investment chief and a Sulzer board member, said March 26 that the firm will continue to be an independent company and that there are no plans to merge with Sulzer.