ISS Proxy Advisory Services, an independent institutional proxy advisory service, has recommended that shareholders of Russia's mining giant Norilsk Nickel vote for an early termination of powers of the company's board and two independent director nominees at the forthcoming extraordinary shareholders' meeting, aluminum producer and Norilsk Nickel shareholder RusAl said on Friday.
The EGM will take place on October 21, 2010.
"We... believe that change is warranted on this board and that the best solution to this situation would be to terminate the current unbalanced board and to elect new directors," ISS report was quoted in RusAl's statement.
"Considering the current unhealthy dynamics at Norilsk Nickel's board and the shift of power toward one of the two significant shareholders, it is imperative that independent directors be present on this board. At present, there are only two independents on the company board, which does not reflect Norilsk Nickel's ownership structure. Ideally, the number of independents would increase in order to bring the much needed objectivity to this board," ISS was also quoted as saying by RusAl, controlled by billionaire Oleg Deripaska.
ISS recommends two RusAl's nominees, Terence Wilkinson, a board member of Angara Mining Plc and executive director at Lonmin plc, formerly head of Ridge Mining Plc, and Gerard Holden, former global head of mining and metals in Barclays Capital, for election to Norilsk Nickel's board of directors.
ISS was quoted in the statement as saying that the voting at the June Norilsk Nickel shareholder meeting "stands in contrast to the spirit of (Russian) law."
RusAl, holding a 25 percent stake in Norilsk Nickel, and Interros, billionaire Vladimir Potanin's investment arm, also with a 25 percent stake, have been embroiled in a shareholder row after RusAl had lost one seat on Norilsk's board at the June annual general meeting, while Interros increased its representation.
RusAl has accused Interros of ruining the parity and the board of directors of a vote fraud. The Russian Federal Financial Markets Service subsequently discovered possible collusion between Norilsk Nickel management, Interros and Bank of New York, the company's nominal holder of American Depositary Receipts.
The Prosecutor General's Office has found that companies affiliated with Interros gave instructions to a BoNY representative to vote using a specific number of depositary receipts.
Norilsk Nickel says its AGM on June 28 was conducted in strict conformity with relevant Russian legislation, and government inspectors have not found any grounds to deem the AGM results void. The company also claims the current board of Directors represents the interests of all shareholders.
MOSCOW, October 1 (RIA Novosti)