Nikolai Maksimov, the founder and minority shareholder of the Maxi Group steel mill, has been arrested following a news conference in Moscow on suspicion of abusing his position.
Maksimov has been in conflict with steel giant Novolipetsk Steel (NLMK), which now holds the controlling stake in Maxi Group, over what he referred to as alleged hostile takeover.
Maksimov's lawyer Leonid Mateyev said after the arrest that the businessman would now be transferred to Yekaterinburg in the Urals to face charges within the next 48 hours.
In 2007, Maximov, the sole owner of Maxi Group at the time, had to sell 50 percent plus one share to Novolipetsk Steel to prevent the bankruptcy of the debt-laden mini-steel mill. NLMK then issued a loan to Maxi Group secured by the shares of Maxi Group and its subsidiaries.
Maxi Group failed to honor its obligations, following which the pledged property was auctioned off in 2009 and NLMK gained direct control of Maxi Group's subsidiaries. Maximov said that the shares had been sold at reduced prices but an arbitration tribunal rejected his claims.
In July, Maximov complained about "increased pressure" from investigators over his alleged embezzlement case of 5.9 billion roubles ($190 million) from Maxi Group.
Maximov said the case had been fabricated with the aim of forcing him to give up his attempt to make Novolipetsk Steel pay for the Maxi Group shares they purchased from him.
In mid-July, Maximov filed an appeal to a Yekaterinburg court against a previous courts decision on seizing his accounts and securities at Moscow banks over the criminal proceedings launched against him.
In his appeal he said his accounts had been frozen due to the conflict with NLMK.
NLMK is one of Russia's largest steelmakers. Its main beneficiary is Vladimir Lisin (84.6%), 2.5% is owned by management, and 12.89% is in free float, including 8.45 percent as GDRs on the London Stock Exchange.
MOSCOW, February 9 (RIA Novosti)