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By John Helmer in Moscow

Oleg Deripaska’s bid to take control of Norilsk Nickel, Russia’s premier mining company, came to an end on Monday at a meetingin Moscow. The meeting, to which Norilsk Nickel controlling shareholder Vladimir Potanin was also summoned, concluded with an unambiguous veto on Deripaska’s ambition to buy a controlling stake in Norilsk Nickel, and make a reverse listing of Rusal through the takeover.

At Deripaska’s Basic Element holding, Deripaska’s spokesman Sergei Bobichenko wasasked if Deripaska had met Deputy Prime Minister Igor Sechin. He responded that he can neither confirm nor deny the information. Sources close to Potanin also declined to confirm or deny the meeting and its outcome. Sechin’s spokesman refused to say, and referred the question to the prime minister’s press service. An official there said he did not know, and requested the question to be submitted in writing.

Sechin is formally in charge of Russian policy for industry and oil. He is acknowledged to be the most important policymaker under Putin on the award of the country’s natural resource concessions.

Norilsk Nickel has indirectly confirmed that United Company Rusal, which Deripaska has been unable to list on the London Stock Exchange, appears to haveabandoned its threat to call a new shareholders’ meeting to vote on a new board of directors. According to Norilsk Nickel sources, no application for the calling of an EGM has been received since the annual general shareholders’ meeting on June 30 elected the 9-man board. That vote, as Mineweb reported, relegated Rusal’s 25% bloc to just two seats, occupied by Deripaska himself and Rusal chief executive, Alexander Bulygin.

On July 7, Potanin, who has met Putin twicethis year to discuss the Norilsk Nickel position, arranged for his own election as chairman, and for the replacement of CEO Denis Morozov by Sergei Batekhin. That appointment is to be reviewed again by the board on August 8. This new session will also confirm the impact on Deripaska of Putin’s marching orders.

Russian newspapers are reporting that Batekhin may be replaced as chief executive by Potanin’s new choice, Vladimir Strzhalkovsky. Sources close to Norilsk Nickel have told Mineweb that Potanin has been discussing Strzhalkovsky’s appointment with the government for some time. If he takes the chief executive function, the leadership of the company will then be divided between himself; Batekhin, in charge of production and strategy; and Alexander Popov, in charge of finance and investment relations. Popov has a background as a banker; his last post was chief executive of Rosbank, which Potanin sold last year to Societe Generale.

Interros sources claim the titles of the new Norilsk Nickel leadership are less important than the functions.Strzhalkovsky’s function is to guarantee Putin’s and Kremlin backing for the board chairman Potanin — and deny it to Deripaska.

Following Batekhin’s appointmentby the board three weeks ago, Rusal issued a press release, attacking Potanin’s move, and ctitizing Batekhin for “no meaningful experience in metals and mining sector.. he has never served as the CEO of a public company.”

Rusal spokesman Vera Kurochkina was asked to say if that is also the assessment of Strzhalkovsky by Rusal. She did not reply.

A 54-year old, Strzhalkovsky is a native of St. Petersburg. Between 1980 and 1991, he was a KGB officer. After leaving the agency, he set up a tourist agency in St. Petersburg. From there he passed under Putin’s wing in Moscow to become adeputy minister of sport and tourism; then a deputy minister of economic development and trade. For the past four years he has been head of the Federal Tourism Agency.

Putin’s intervention this week with Norilsk Nickel occurred on the same day he turned up the heat on Mechel, the steel and mining group, for alleged transfer pricing and tax avoidance. At the same time, Mineweb has already reported that the Accounting Chamber has launched an independent call for Putin to put a stop to Rusal’s use of tolling schemes to reduce tax on aluminium production in Russia.

Confirmation of Putin’s crackdown on Deripaska will intensify the pressure already on Rusal’s and Deripaska’s bankers to limit the credit they can draw until and unless Deripaska resolves the UK High Court claim by Mikhail Chernoy (Michael Cherney). Judge Christopher Clarke transformed Deripaska’s borrowing position and Rusal’s balance-sheet, when he ruled on July 3 that “Mr Cherney has a reasonable prospect of success in respect of his claim.”

This has encouraged at least one other claimant, Deripaska’s former friend and godfather to one of his children, Sergei Popov, to publicly challenge Deripaska’s testimony in the High Court. Popov may lodge a billion dollar claim of his own regarding shares in Rusal Deripaska had promised him.

Deripaska has issued a public statement on his intention to appeal the Clarke verdict. “On the substance of Mr Cherney’s claims,” Deripaska said through London PR agency Portman, “Mr Deripaska continues to believe they are vexatious and utterly without merit.”

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