The largest shareholder of Norilsk Nickel, Vladimir Potanin, opposes the conclusion of a new shareholder agreement with Rusal after 2022. In his opinion, the agreement has become a rudiment and only hinders the development of the company. He explains this by the fact that the views of Interros and Rusal on the management system of Norilsk Nickel are “fundamentally different,” and Rusal is only concerned with receiving dividends, regardless of the situation.
The shareholder agreement concluded eight years ago by the main owners of Norilsk Nickel has become a rudiment that is not needed for the effective development and modernization of the company, Vladimir Potanin, the largest shareholder and head of the MMC, told Reuters. Vladimir Potanin's Interros owns about 34% of the shares of GMK, Rusal, founded by Oleg Deripaska, - 27.8%, Roman Abramovich and Alexander Abramov's Crispian - 4.2%.
According to Mr. Potanin, the visions of Interros and Rusal "are fundamentally different with regard to the management principles at Norilsk Nickel." The aluminum company, Vladimir Potanin continues, advocates further tightening of control systems, which, in Interros's opinion, contradicts the principles of normal corporate governance, which imply reasonable decentralization.
The shareholder agreement was signed eight years ago until 2023. Then the agreement put an end to the long-term corporate conflict between Vladimir Potanin and Oleg Deripaska. The agreement introduced the shareholders' veto right on transactions, created conditions for financial control and a managing partner, which is Mr. Potanin. However, since then, according to the head of the MMC, the company has increased the efficiency of its business and built a high-quality management system.
The preservation of this "superstructure" will lead to even greater pressure on Norilsk Nickel in order to receive maximum dividends, regardless of the economic and social situation around the company, "Mr. Potanin said.
Rusal said that the shareholder agreement is not a burden for Norilsk Nickel, but defines the key rules of the game. The main risk, according to Rusal, is “ineffective decisions of individual managers or the absence of decisions as such”. Also "Rusal" is against the reduction of dividends of the mining and metallurgical complex, since they must be preserved and directed to the development of the economy. The company also said in a response that Rusal invested $ 14 billion in MMC shares, and dividends have always been an important issue showing the Rusal shareholders the effectiveness of the investment. Commenting on the words of Vladimir Potanin about the tightening of control systems on the part of the aluminum company, Rusal said that it has consistently advocated strengthening all management functions in the MMC, such as planning, organization, motivation and control. The latest events with incidents in the Arctic have confirmed the need for such approaches for the company, according to Rusal.
As for the centralized or decentralized management model, none of them in any way excludes the control function. And with this in "Norilsk Nickel", as the last two months have shown, there are obvious problems. We are glad that a number of our proposals were recently heard by the company both in terms of the management model and in terms of strengthening the management team, ”the company said.
Vladimir Potanin and Rusal, since the conclusion of the shareholder agreement, have continued to argue about the development of the company in terms of dividend payments and investments. Rusal has repeatedly opposed the start of new projects supported by Vladimir Potanin. For example, because of the position of Rusal, the joint venture between Norilsk Nickel and Russian Platinum, which was supposed to implement the Arctic Palladium project, collapsed.
In recent months, the accident related to the oil spill near Norilsk has served as an additional catalyst for the conflict. Rosprirodnadzor issued a fine of 148 billion rubles to Norilsk Nickel. and, although the company has not yet agreed with him, Vladimir Potanin has already proposed to limit dividends in 2020 to $ 1 billion. Rusal needs dividends from a stake in Norilsk Nickel to service its debt, so the company insists on changing the top management of the MMC and expects to cover damage from the oil spill not from the profits of Norilsk Nickel, but from “alternative sources”.