Russian metals moguls settle RUSAL stake spat

Thu Sep 27, 2012 12:54pm EDT
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By Kirstin Ridley and Polina Devitt

LONDON/MOSCOW (Reuters) - Russian billionaires Oleg Deripaska and Michael Cherney reached an 11th-hour settlement in a dispute over a billion dollar slice of aluminum giant RUSAL (0486.HK: Quote), shortly before they were due to give evidence in a drawn-out London court case.

The case, which had been expected to run well into 2013, was due to dwell on allegations of broken promises, criminality and mob rule while shining a light on the murky carve-up of lucrative smelters in the 'wild east' of post-Soviet Siberia.

"Mr. Deripaska announces that Mr. Cherney's litigation in London against him has been terminated," a spokesperson for Deripaska said in a brief statement. "Neither party will be making any further comment in relation to the litigation or matters raised therein."

Cherney's team released a nearly identical statement.

Cherney, born in Ukraine, raised in Uzbekistan, Jewish by creed and living in Israel since leaving Russia in 1994, alleged that metals mogul Deripaska reneged on a deal to buy him out of their joint aluminum business, RUSAL.

Well-connected Deripaska, who controls RUSAL and is a survivor of President Vladimir Putin's crackdown on oligarchs who once wielded great political power, denied having had any such business relationship with Cherney. He alleged he was the victim of a protection racket Cherney helped orchestrate - an accusation Cherney denied.

Cherney, who in 2008 won the right to bring his case against Deripaska in London's respected courts - the venue of choice for the warring Russian wealthy - was due to be cross-examined next Tuesday via video-link from Israel. An outstanding arrest warrant relating to a separate money laundering investigation prevents him from travelling to London.

Lawyers were intrigued at the last-minute deal.   Continued...

Russian tycoon Oleg Deripaska takes part in a discussion meeting at the St. Petersburg International Economic Forum in St. Petersburg, June 22, 2012. REUTERS/Sergei Karpukhin