BAT Top Managers Summoned to Russian Court
A Moscow court has demanded that four current and former directors of BAT-Yava, a major British American Tobacco Plc subsidiary in Russia, appear to testify in a dispute between the subsidiary and its minority shareholders.
The claimant in the case, Branston Holdings Ltd., issued a statement on Monday, Oct. 2, welcoming the ruling. It said the ruling emerged from a hearing before the Moscow City Arbitration Court last Thursday, Sept. 28, during which the judge ordered the four executives, including two British nationals, to testify with respect to the respondent’s links with Dutch-registered Hamulton B.V.
The two UK executives ordered to appear are Mark Cobben, former General Manager, BAT Russia, now understood to be Managing Director, BAT Germany, and John Selby, former Finance Director, BAT Russia, who left that his position in 2004 and now works at BAT Plc headquarters in London.
The others required to appear are Leonid Sinelnikov, Chairman of BAT-Yava’s board, and Alla Poloiko, former BAT-Yava CFO. A date has not yet been set for their court appearances.
The ruling came during a hearing of the claims filed by Branston Holdings, acting on behalf of a group of BAT-Yava’s shareholders, where Branston Holdings alleged that BAT has used its indirectly controlled companies to evade requirements of a Russian law requiring interested-party transactions — deals with suppliers or buyers controlled by BAT — to be vetted and authorized by independent shareholders.
PRNewswires reported that Branston has submitted evidence that these executives were involved in planning a means of overcoming potential minority shareholder opposition to transactions between the giant BAT-Yava factory in Moscow and its suppliers and distributors controlled by BAT.
Branston believes some $1.6 billion in such interested-party deals have taken place at BAT-Yava over the past five years. One consequence has been dividends totalling only $5 million being paid out by BAT-Yava throughout that period, and no dividend at all this year.
