GLENCORE was dragged into a worsening dispute between two Russian oligarchs yesterday, as aluminium producer Rusal announced that its former chairman is to take legal action against the company and the commodities trader over a $47bn supply contract.
Viktor Vekselberg quit as Rusal’s chairman three weeks ago and has since notified Glencore and his former colleagues, who include rival oligarch Oleg Deripaska, that he has filed a suit against them in London via his investment vehicle Sual Partners, which own 16 per cent of Rusal. Deripaska, chief executive of Rusal, owns 47 per cent of the miner.
The dispute could prove a messy inconvenience for Glencore, which had signed contracts to market more of Rusal’s aluminium.
Hong Kong-listed Rusal said: “Sual alleges... that certain contracts between the company and Glencore were entered into (or are to be entered into) in breach of the shareholder arrangements.” The former chairman is seeking damages and the cancellation of the contracts.
But one industry insider, who called the move “highly unusual”, suggested that the suit is an attempt to “shine a light on Deripaska’s management” more broadly.
Vekselberg quit citing a “crisis” at Rusal that he blames on his rival’s decision to hold onto a 25 per cent stake in Russian nickel producer Norilsk Nickel, on which Rusal is reportedly nursing a $5bn loss. Norilsk had offered to buy back the stake, a deal Vekselberg supported, but Deripaska blocked. The Norilsk stake had been seen as a precursor to creating “a Russian BHP Billiton” – a global, diversified miner – but that ambition has failed to materialise.