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TNK-BP's Russian shareholders start legal action against BP

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TNK-BP's Russian shareholders announced on Thursday the start of legal proceedings against the oil company's British co-owners, amid a series of disputes over management and strategy.
MOSCOW, June 12 (RIA Novosti) - TNK-BP's Russian shareholders announced on Thursday the start of legal proceedings against the oil company's British co-owners, amid a series of disputes over management and strategy.

Four Russian billionaires controlling the Alfa-Access-Renova (AAR) consortium, which has a 50% stake in the joint venture, are demanding a cut in TNK-BP's foreign staff, equal board representation and the replacement of CEO Robert Dudley, who they accuse of putting British oil major BP's interests ahead of TNK-BP.

BP, which holds the other 50% stake, has given its full support to Dudley, saying it has full confidence in his leadership.

"The development in the dispute between the TNK-BP shareholders has been prompted by the one-sided and illegal actions of CEO Robert Dudley. The AAR consortium is announcing the start of legal proceedings against the unlawful actions of BP representatives," the statement said.

According to the four main shareholders - German Khan, Mikhail Fridman, Viktor Vekselberg and Len Blavatnik - BP has "persistently ignored" their demands and proposals. They said a compromise is now unlikely.

AAR executive Stan Polovets said on Wednesday that the consortium would file a suit with the Russian courts in protest against a TNK-BP board of directors meeting on June 3, which he said was illegal, as no Russian shareholders were present.

Polovets said the Russian group would seek to have the directors who attended the meeting stripped of their powers.

He also said AAR would also lodge a separate suit with the Stockholm Court demanding the cancellation of a TNK-BP agreement on foreign employees. The consortium accused BP of employing too many foreigners in management positions in the Moscow office, instead of specialists in the field.

Currently 238 out of a total 275 foreign personnel are based at the Moscow office.

"We will be asking the International Arbitration Court in Stockholm to declare the secondment agreement null and void," Polovets said.

BP recalled 148 foreign employees in Russia over alleged visa problems in March. The move came amid mounting pressure on the company after a police raid on its Moscow office and the joint venture, and the arrest of an employee on industrial espionage charges.

Authorities in Moscow are currently conducting a probe into alleged violations of labor and migration laws by TNK-BP, as well as TNK's tax arrears for 2001-2003, before the venture was created.

Analysts have suggested the dispute could result in Russia's third-largest oil company being bought up by state-controlled Gazprom or Rosneft as part of the Kremlin's campaign to toughen its grip on the oil and gas sector.

The company produces over 78 million tons of oil a year.

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