The battle lines between Corus and the rebel Russian shareholders amassing on the share register of the steel group were drawn up yesterday when the company rejected the candidate they want on the board.
Jim Leng and Philippe Varin, chairman and chief executive of Corus, yesterday called the attempt by Alisher Usmanov - the Russian metals entrepreneur who has a 13.3 per cent stake in Corus - to place a former Corus director on the board "unwelcome". They admitted, however, that they have had "exploratory talks" on doing business with Mr Usmanov, who owns an iron ore business in Russia.
"We have a united board. No one individual shareholder should be represented on the board," Mr Leng said, adding that Mr Usmanov's related business interests in the metals industry also compromised his proposal for a board representative.
Gallagher, the Cyprus-based investment vehicle that holds Mr Usmanov's shares, wants Adrianus Van der Velden, a former executive director of Corus, to become a non-executive director. It hit back at Corus's claims that he would act only as his mouthpiece. "He is independent and does not represent our interests," Farhad Moshiri, of Gallagher, said yesterday. "We are a strategic investor with a massive economic interest in this company. All we want is for the integration of the business to speed up and performance to improve."
Oleg Deripaska, another Russian metals tycoon who owns a stake in Corus, is also concerned about how the company is run. His investment vehicle, Basic Element, yesterday said it would continue to support Mr Van der Velden's appointment and would urge other shareholders to join them. "If other shareholders are satisfied with the current financial performance of Corus and the board, then they will support it. If they are not, then this is an opportunity to voice their desires to have representation on the board," David Geovanis, managing director of Basic Element, said yesterday. He wants the board to consider a withdrawal of all or parts of the UK business if it fails to improve the performance.
Mr Leng said yesterday he believed shareholders were supportive of the company's strategy, and the proposal for Mr Van der Velden's appointment would not be carried. "Our plans were overwhelmingly endorsed by shareholders who participated in our rights issue last year," he said. Brandes Investment Partners, a 15 per cent shareholder in Corus, has yet to reveal its allegiances.
Relations between Corus and Mr Usmanov, its second largest shareholder, are clearly breaking down. A meeting with Corus was scheduled for yesterday morning to discuss his reasons for wanting Mr Van der Velden on the board before it advised other shareholders on the appointment. The statement from the company released to the stock exchange yesterday morning took Gallagher by surprise. "The highly combative nature of their reaction to having an independent steel expert on the board was unwarranted," it said. "The board is not a club for Mr Leng's friends. It should be running the company properly." Mr Usmanov, who has said that he wants to "take strategic steps to increase his influence over Corus's management", plans to pursue Mr Van der Velden's nomination and will call an EGM if necessary.
Corus yesterday said it had received approaches from a number of parties regarding its Teesside plant. This has been earmarked as surplus to the company's new structure.
Mr Usmanov and Mr Deripaska are highly critical of the management of the company, which is still not profitable five years after the merger between British Steel and Hoogovens.Reuse content