MOSCOW (Reuters) -A Russian government official said on Wednesday that Moscow assumed that the new owner of gold producer UGC would have to conduct a buyout of minority shareholders after the central bank ruled that the state had violated small investors’ rights.
The state seized a majority stake in what is Russia’s number four gold producer earlier this year from businessman Konstantin Strukov after state prosecutors alleged he had obtained property “through corruption”.
In a rare backlash against the state’s $50 billion asset-grabbing spree which began after the start of the full-scale conflict in Ukraine, the central bank ruled earlier this month that the state had violated the rights of UGC’s minority shareholders by not making an offer as required by law.
The central bank asked the state property agency, which reports to the Finance Ministry, to proceed with a buyout offer. The agency had previously said it was working with shareholders to work out a solution.
But Deputy Finance Minister Alexei Moiseev told reporters on Wednesday that it would be up to UGC’s new owner to deal with the issue.
“This will be one of the topics of discussion with the new investors. We assume that the investor will have to make an offer,” Moiseev said on the sidelines of a financial conference in Moscow.
Moiseev argued that the situation was more complicated than presented by the central bank, as the property agency could not be considered a voluntary buyer and had been obliged to comply with a court decision to transfer the assets to the state.
“The spirit of the law does not correspond to this situation, so I believe that things are not as straightforward as they are presented here. But it is clear that there are problems,” said Moiseev.
Secretive copper producer UMMC has emerged as the likely buyer of the seized stake in UGC, according to Reuters’ sources.
Moiseev said the ministry was aiming to sell the UGC stake before the end of the year.
(Reporting by Elena Fabrichnaya; Writing by Gleb BryanskiEditing by Andrew Osborn)
