Sistema Wins $1.1 Billion Claim Against Seller of BashneftElena Mazneva
Russian billionaire Vladimir Evtushenkov’s AFK Sistema may get 70.7 billion rubles ($1.1 billion) in damages after the state seized its regional oil producer last year.
The Moscow arbitration court ruled in favor of Sistema, which sought damages from OOO Ural-Invest, the successor to the companies that sold control of OAO Bashneft, Judge Igor Burmakov said during the hearing on Monday. Sistema shares rose 6.4 percent in Moscow after the decision.
Sistema spent $2.6 billion over four years, gaining control of Bashneft in 2009. Prosecutors sued last year to recover the oil producer and refiner, which had been controlled by Russia’s Bashkortostan republic until 2003.
“We plan to appeal,” Ural-Invest lawyer Sergey Makarenko told reporters after today’s hearing. “We are not playing giveaway like Sistema.”
Sistema said the ruling is “fair.” The money once recovered will be used for investment in Russia and social programs, including for the Bashkortostan region, where Bashneft is based, Sistema said in an e-mailed statement.
Ural-Invest doesn’t have the money that Sistema is seeking, Makarenko said. The company has 30 days to appeal, according to the court.
Evtushenkov, 66, spent three months under house arrest last year on charges of money laundering during a probe of his acquisition of Bashneft. He was freed in December after the government seized the controlling stake in Bashneft under a Moscow court ruling, which Sistema decided not to challenge.
The seller shouldn’t be held responsible because Sistema didn’t even fight to retain the asset, Makarenko said during Monday’s hearing. “It surrendered,” he said.
Sistema’s legal team countered saying they “had no chance.”
Ural-Invest is owned by a charity fund Ural, registered in Bashkortostan, according to the fund’s lawyer Ilnur Salimyanov. The fund was founded by Ural Rakhimov, and the board is headed by his father Murtaza Rakhimov, the former president of the region. Neither of them have anything to do with the fund’s money, all of which is used for charity projects in the region, the lawyer said.
The authorities have accused Ural Rakhimov of using his father’s position to acquire oil production and refining assets from the regional government and selling them later to Sistema. His lawyer has maintained his innocence.
Last year, the Bashkortostan government asked Russian President Vladimir Putin to transfer part of the recovered Bashneft shares to the region. It may get 25 percent and receive Bashneft dividends this year, the company’s chief executive officer Alexander Korsik told a regional newspaper earlier this month.