Legal action brought against Slavneft

A group of foreign companies has brought a legal action against Slavneft.

The UK-based Times newspaper reported on Monday that Slavneft's subsidiary, Megionneftegaz, sold oil for the dumping price of $7.67 per barrel (50% lower than the market price) to other companies inside Slavneft based in Russia, Belgium, and the British Virgin Islands.

Therefore, Slavneft allegedly received additional profits, leaving nothing for minority shareholders.

The Sweden-based company, Vostok Nafta, working with the former Soviet republics and holding 1% of shares in Megionneftegaz, launched the legal action against Slavneft and its subsidiaries in Moscow, Kalmykia, Chukotka, Antwerp and the British Virgin Islands.

Vostok Nafta President Alex Williams has told The Times that his staff members had tried to track down the accounting of the company purchasing cheap oil - Slavneft Trading - in Chukotka, but in vain.

The authorities told us that this company's accounts do not exist. Obviously, it yields hundreds of million of dollars but has no accounts, Williams is perplexed. Vostok Nafta has sent out letters to 5,000 minority shareholders of the company, pointing out the violation of corporate management principles by Slavneft.

Williams pointed out violations by British Petroleum, a Slavneft co-owner, in this story. We are certainly feeling that BP has violated its ethics code, he said.

The Times published an article about this incident called "Chelsea Owner's Firm Cheating UK Funds," because Vostok Nafta's shareholders include pension funds of the two leading British communications companies - British Telecom and Royal Mail.

Eugene Tenenbaum, financial director of Roman Abramovich's Chelsea club and the Millhouse Capital, said to The Times that this was huge pressure not on Abramovich, but on BP.

According to Tenenbaum, the action is also aimed at presenting negatively both Abramovich and BP in Western court and the Western press.

This dispute has to be solved in court. They have brought a legal action against us. We are ready. We know that the legal and economic arguments are in our favour, Eugene Tenenbaum asserted.

Meanwhile, the BP leadership made it clear that Slavneft was run separately from TNK-BP. Our intentions, goals and convictions are that sound corporate management is important and provides for respect for the rights of minority shareholders, the company's management asserts.

Finally, the Russian government in the person of the Federal Service for Financial Markets turned down claims of Vostok Nafta against corporate management violations in Megionneftegaz, saying that it involved no legal violations, The Times concludes.

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Author`s name: Editorial Team