Russian oligarchs fail to dislodge Dudley as head of TNK-BP

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The Independent Online

Robert Dudley has survived an attempt led by four oligarchs to oust him as head of the Anglo-Russian oil firm TNK-BP, but could face legal action as the Russians continue to press their claims to remove the British chief executive.

The five-strong board of TNK-BP's management, which includes two Russian members, met in Moscow yesterday to decide on Mr Dudley's fate, and voted three to two in favour of rejecting the proposal to dismiss him. BP said it was pleased with the board's decision to back Mr Dudley, and reaffirmed its support for the chief executive of its Russian venture.

Stan Polovets, the chief executive of AlfaAccessRenova (AAR), a consortium of four oligarchs that owns 50 per cent of the venture, said: "We are disappointed but not surprised by the results of the vote. Three of the five TNK-BP board members represent BP and were appointed by Bob Dudley."

Mr Polovets added that while it was difficult to support a motion to dismiss the person who hired them, "we had hoped – and still hope – that they would exercise their fiduciary duties to all TNK-BP shareholders and vote in favour of a dismissal".

While the vote provides brief respite for Mr Dudley, the storm is unlikely to have blown itself out. The oligarchs said they were still pushing to replace Mr Dudley who, they said, "is guided exclusively by the interests of BP".

They pledged to honour BP's right to propose a new chief executive, should Mr Dudley be forced out, but would not accept a candidate from BP. "Last time we checked, BP had not cornered the market on management talent."

One source close to the talks said the talk in Moscow was that the Russians were even threatening legal action "although they have said that before, and nothing has happened".

The increasingly fractious relationship at the joint venture erupted into open warfare in the past month as both sides traded insults. The BP chairman, Peter Sutherland, called the oligarchs "corporate raiders", with the company claiming they were trying to grab control of the venture. One of the billionaire investors, Mikhail Fridman, shot back, accusing Mr Sutherland of acting "in the best traditions of Goebbels propaganda".

The row culminated in Viktor Vekselberg, another of the oligarchs and chairman of the compensation committee of the board of directors of TNK-BP, calling an extraordinary meeting to force Mr Dudley's dismissal. In a statement yesterday, Alfa said it had received letters from labour unions, government agencies and Mr Fridman, "citing numerous violations of Russian labour, immigration and tax laws committed by TNK-BP management under Bob Dudley's leadership". It added there had been violations of corporate procedure and the joint venture's charter. The two sides have repeatedly clashed over the key asset since the lock-up preventing the sale of shares in the venture expired in December. There has been speculation that the Russian government could attempt to secure a stake in the venture.

This year, TNK-BP's office has been raided by Russian authorities relating to a charge of industrial espionage by an employee, while staff, including Mr Dudley, have been questioned over tax and labour market irregularities and fears emerged that overseas staff would be ejected when their permits ran out.

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