Sibir initiates legal action against two former directors

The Associated Press ~ staff The News
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LONDON - Sibir Energy PLC, the London-based oil producer and refiner with major operations in Russia, said Tuesday it has begun legal action against two of its former directors over controversial real estate deals and alleged share manipulation in a bid to recover some $400 million.
Sibir, which prospects for oil in Siberia and owns filling stations in Moscow, said it has started proceedings in Britain's High Court against shareholder Chalva Tchigirinski and former CEO Henry Cameron, whom the company added it was dismissing with immediate effect.
Sibir halted trading in its shares on Feb. 19 and launched an internal investigation into controversial real estate deals involving Tchigirinski after it emerged that he owed the company US$325 million, nearly three times more than it had announced earlier in the year.
Tchigirinski owns 47 per cent of Sibir alongside partner Igor Kesayev. The Moscow city government owns an 18 per cent stake. Sibir angered shareholders last year when it said it would buy distressed property assets from Tchigirinski, who was facing margin calls on some of its debts, noting that the investment was a departure from the company's oil business.
The company said in a statement to London's AIM exchange on Tuesday that it expects the total claims to rise to around $400 million and that it also believes its share price was manipulated between Oct. 16 and Oct. 31.
It said it believed that "a significant number" of the transactions in its shares between those dates "was conducted using money that had been taken from the company." Sibir said that it had informed Britain's regulator, the Financial Services Watchdog, about its findings.
"The launch of the legal proceedings announced today underlines our determination to recover on behalf of our shareholders the funds that were taken from the company," said Stuard Detmer, the company's acting CEO.
Sibir, which runs the Moscow Refinery with OAO Gazprom Neft and has an oil production venture with Royal Dutch Shell PLC in Siberia, said that it would continue its own investigation as the legal action proceeds. It expects its shares to remain suspended from AIM "for the foreseeable future."
The company had suspended Cameron from his post on the same day it halted share trade, saying the former director would continue to assist Sibir in recovering the debts. But it said Tuesday that he had been dismissed with immediate effect "as a result of his conduct."
Cameron earlier defended his actions, saying that "difficult times call for uncomfortable decisions" and that the move was necessary to preserve the existing shareholder structure.

Organizations: Sibir Energy PLC, Financial Services Watchdog, Moscow Refinery Royal Dutch Shell PLC

Geographic location: LONDON, Siberia, Moscow Britain Russia

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