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Last Saturday I had a phone call from my Togliatti friend. You may remember I was writing a lot about conflict of shareholders around world’s largest ammonia producer Togliattiazot — company’s minority shareholder Uralchem accusing TOAZ management in stripping company’s profits and selling its assets. A friend of mine from Togliatti’s regional newspaper told me on the phone that TOAZ has scheduled its annual shareholders meeting. First thing which surprised me — the meeting was scheduled on Sunday, March, 26, at 8:00 AM. Not the very obvious time for shareholders to come and do business, isn’t it? I though it was done to not allow Uralchem to participate in the meeting. I was told that on the meeting the main issue of discussion were distribution of dividends and many TOAZ workers who own small stakes of the plant will be coming to the meeting to find out what amount of plant’s profits will be distributed to them. They came to the meeting despite the conflict of shareholders and obstacles they faced, as it was quite uneasy to get through to the meeting.
What actually happened on the meeting itself was carefully reported by Russian business newspapers
Vedomosti and
Kommersant. Togliattiazot informed that its Annual Shareholders Meeting failed due to the lack of quorum of shareholders. The only shareholder appeared on the meeting was Uralchem, who owns 9.3% stake in the company and TOAZ workers with small stakes.
Togliattiazot do not reveal its shareholding structure, but according to Uralchem’s criminal complaint it launched with Investigative Committee of Samara, 71.49% of TOAZ belongs to Swiss trading firm Ameropa AG and its beneficiary Andreas Zivy, says Vedomosti in their article. Approximately 20% stake belongs to Vladimir Makhlai and his family. None of those appeared on the shareholders meeting scheduled on the early morning of Sunday.
Another Russian newspaper, Kommersant cites representative of Uralchem as saying that "the company is not surprised by the decision of the majority shareholders of Togliattiazot to refuse to participate in the meeting. In Uralchem’s opinion, these actions serve to reinforce arguments which company outlined in a statement to law enforcement agencies: the majority shareholders have other opportunities to extract significant revenues from the plant, so the issues of official distribution of profits and dividends have little interest for them". According to preliminary estimates, Uralchem claims for the amount of 350 million rubles in dividends for 2012.
The shareholders meeting should have been deciding on distribution of total amount of 3.9 billion roubles ($127 million) in dividends for 2012, what amounted in 9.013 million roubles per share.
Vedomosti sources claimed that Togliattiazot’s director Eugeny Korolev, who was left by Makhlai and Zivy to manage the plant is hiding somewhere for the last month. Sources connect this to the pending criminal investigations Uralchem launched against Togliattiazot’s management — one case attributes to transfer pricing scheme which TOAZ used to sell its production to the Swiss trader Ameropa AG and Nitrochem Distribution AG, another case describes asset stripping which TOAZ management performed in 2010. Uralchem estimates its losses in more than $550 million.
Nezavisimaya Gazeta, another Russian periodical covering the story, says that rather than mending relations with plant’s shareholders, ToAZ management prefers to yell about seizure attempts and accuse Investigative Committee of malicious prosecution. In response to such comments Investigative Committee issued a statement warning ToAZ executives that putting pressure on investigation is inadmissible and will not be tolerated.
It is yet unclear whether shareholders meeting will be moved on a later date. My Togliatti friend told me that that situation there is out of control. Adding more to this — workers who owned the shares left without dividends they deserve by law. All of TOAZ management, being afraid of prosecution, left their positions and plant which potentially dangerous chemical element as ammonia has been left totally without control. Scary, isn’t it?