By John Helmer, Moscow
The penultimate move in the two-month contest to stop the Magnitogorsk Metallurgical Combine (MMK) takeover of Flinders Mines, scheduled for tomorrow morning at 9 o’clock local time, is already proving to be as bizarre as everything else recorded in the Chelyabinsk arbitrazh court to date .
Judge Galina Fedina of Appeal Court No. 18 is scheduled to hear an appeal by lawyers for MMK and Flinders Mines, challenging the injunction against the deal issued by the lower court judge, Natalia Bulavintseva. If Fedina rules to lift the injunction, the deal can proceed, and MMK will complete its borrowing from Gazprombank to buy out Flinders Mines shareholders at a price of 30 Australian cents per share (A$546.3 million). Australian Stock Exchange trading of the Flinders Mines shares this week has been listless between 13 and 14 cents on low volumes, with market capitalization now at A$246 million.
If Fedina defers ruling in favour or against the challenge, and instead remands the case to the lower court for its next scheduled hearing on the merits, July 2, that will be as good as a ruling to dismiss the appeal altogether. The MMK deal will then reach its June 30 quit-date without closure, and MMK can be expected to quit. The Chelyabinsk court will never have to rule on the merits of the case at all.
In the two months since phantom MMK shareholder Elena Egorova applied to the Chelyabinsk court to stop the deal, there has been no assessment by the court of evidence supporting the injunction or opposing it. MMK has issued press releases calling the application and injunction “ungrounded”. However, the company has refused to disclose the grounds for its defence. Egorova has appeared neither in person nor on paper. Judge Bulavintseva’s rulings refer only in passing to the evidence submitted in the case so far, and there is nothing in the court file to substantiate the grounds which lawyers for the two sides have submitted.
So to test whether Fedina is about to do something clear and concrete, she was asked today what are the names of the lawyers formally on record as appearing tomorrow. Through spokesman Olga Tige, the judge said no information can be provided about the lawyers’ names.
Asked whether the hearing will be open or closed, the judge’s spokesman said that will “be decided tomorrow, depending on the review of the financial documents of companies in the court.”