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By John Helmer, Moscow

Oleg Deripaska (image top right) has always had trouble with his business partners when money rewards, administrative pressure, threats, or rigged courts failed to be persuasive. So he might have been more cautious announcing yesterday that the replacement of Victor Vekselberg as chairman of the board of United Company Rusal will be Deripaska’s decision to make swiftly and easily. At a conference call yesterday with reporters, Deripaska claimed the appointment will be made at a board meeting on Friday; and that Vekselberg is likely to be replaced by his choice of one of the board directors Deripaska considers independent. “The chair won’t even get cold,” Deripaska is reported as telling the reporters. None of the reporters is reported to have said anything.

Deripaska was trying to stop the haemorrhaging of Rusal’s share price, which has resumed trading on the Hong Kong Stock Exchange and lost 4% on Wednesday to hit HK$5.87. In today’s trading so far, the share price has dropped another 6% to HK$5.50. The all-time low in the two years the company has been listed was HK$4.88 this past January. The collapse of the aluminium price was driving that; the few institutional investors who buy Rusal stock hedge their bets with an option on the price of aluminium. Deripaska himself (aka corporate governance) is driving the present collapse.

That Deripaska isn’t proposing himself as chairman of the board, or switching from operational chief executive to executive chairman, is evidence that he is beginning to understand this. If independence is problematic in Deripaska-run companies, who can be chairman if not a stakeholder or his nominee, like Vekselberg was?

Deripaska’s loose talk in answer to that one has exposed one of the company’s tightest secrets since he ousted Brian Gilbertson from the board chairmanship in 2007. Gilbertson had been chief executive of Siberian Ural Aluminium (SUAL) when it was owned by Vekselberg and then taken over by Deripaska between August 2006 and March 2007. In the international markets Gilbertson was the most independent chairman Rusal might have had; for Deripaska, that was too independent. None of those who have been appointed to the Rusal board as independents since Gilbertson can match him on that score. But by making independence the touchstone of the new appointment of chairman, Deripaska invites fresh questions — who really controls Deripaska’s reported control stake of 47.41%? Is Deripaska free to decide who will be chairman of Rusal? Can he pick an “independent” like former US Ambassador Philip Lader (image centre), or former Hong Kong government official and Beijing loyalist, Elsie Leung Oi-Sie?

By contrast, if current Rusal board member Anatoly Tikhonov, first deputy chairman of the state bailout bank Vnesheconombank (VEB), is chosen to be chairman, does that mean that it is his boss, the chairman of VEB, President-elect Vladimir Putin, who is calling the shots, not Deripaska?

Lader, who appears to be favoured in the Anglo-American markets on the claim he is one of them and independent of Deripaska, has been a US Government official for eight years (Office of Management and Budget, White House staff, US Ambassador to the UK). He currently makes money through one of the subsidiaries in his WPP holding which represents Deripaska and Rusal for public relations and investment promotion purposes. Lader’s business relationship with Deripaska was reported here. He is described by Rusal as an independent non-executive director.

After the disclosures of negotiations Deripaska has held in the past to sell stakes in Rusal to Alcoa of the US – probably without Putin’s approval — it is unlikely that Deripaska would be trusted by the Kremlin to put an American in charge of the Rusal board. As for Lader’s US credentials, he has been too weak to do the one thing Deripaska has sought from a legion of active or pensioned US Government officials – the lifting of the ban on his US visa.

Nigel Kenny, an English accountant, was with Standard Chartered Bank until 2002 and with an Anglo-Indian private investment company called Sabre Capital since then; but he lacks market standing to lead Rusal. As for his independence, his alma mater Standard Chartered was one of the syndicate of international banks lending to Rusal which signed the December 2009 bailout deal that was the precondition for Rusal to list on the Hong Kong Stock Exchange. How much Standard Chartered was or is still exposed to Rusal for repayment, and what role Kenny may have played in the original loan, or in the subsequent repaymernt negotiations, isn’t known. Rusal told the Hong Kong exchange in its December 31, 2009, share sale prospectus that “Dr. Kenny is independent from and not related to any other Directors, senior management, substantial shareholders or controlling shareholders of the Company.”

Barry Cheung Chun-yuen is also identified as one of the Rusal board independents in the running for the chairmanship tomorrow. Trained in the UK and the US, and a long-time resident and government office holder in Hong Kong, when it was a British colony and then part of China, he now runs the Hong Kong Mercantile Exchange. His experience as Chairman of the Corruption Prevention Advisory Committee of Hong Kong’s Independent Commission Against Corruption might be just the ticket. But his nationality and lack of Russian ties are likely to be obstacles to appointment.

Tikhonov was once a pair of safe hands in the Krasnoyarsk regional administration, where he was deputy governor from 2003, at the time Deripaska was taking over Rusal, and after he had already begun using the governor’s office to apply pressure on the shareholders of the Krasnoyarsk Aluminium Plant (KrAZ) to sell out.

But revealingly, the Rusal prospectus identifies Tikhonov as a “non-executive director”, not as an “independent non-executive director” like Leung, Lader, Kenny, or Cheung. Who gets the nod as chairman of Rusal on March 16 is the first real test of who gives the nod for Rusal’s future.

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