Summa co-owner Magomedov accuses Vekselberg and Blavatnik of seizing Nizhnevartovskneftegaz

Summa co-owner Magomedov accuses Vekselberg and Blavatnik of seizing Nizhnevartovskneftegaz
Viktor Vekselberg Photo: TASS

The Russian oligarchs will go to court in the USA.

Businessman Magomed Magomedov sued Viktor Vekselberg, Leonard Blavatnik, and Leonid Lebedev in a New York state court for $1.3 billion, accusing them of seizing Nizhnevartovskneftegaz in 1997.

Magomedov and his partner Akhmed Bilalov intend to seek compensation for losing their share in the oil and gas enterprise almost 20 years ago.

According to the plaintiffs, in the late 1990s, shareholders Vekselberg and Blavatnik on one side and Director of Nizhnevartovskneftegaz Viktor Paliy on the other side battled for control of the enterprise. They had 40% of the shares, while Magomedov and Bilalov had 5.37%, and another minority shareholder, Leonid Lebedev owned a 5.13% stake. The minority shareholders agreed to pool their portfolios and support Paliy. The Directors' rivals tried to buy out the shares of Magomedov and Bilalov, but they refused, while Lebedev broke the agreement, promising to facilitate the sale of the shares of other minority shareholders as well.

A bit later, Magomedov and Bilalov lost the trial to businessman Oleg Kim, handing him their share in Nizhnevartovskneftegaz through Lebedev's mediation. However, the entrepreneurs that were deprived of shares insist that they did not know about the conspiracy of their former partner with Vekselberg and Blavatnik. Moreover, they said that if they had been aware of the agreement, they would have never agreed to the hand their package over to Kim.

After the trial, Lebedev sold the shares Kim had at his disposal to Paliy’s competitors, receiving in return a share of 1.8% in a Tyumen oil company and $611 million.

However, relations of the partners in collision soured when Rosneft acquired the Tyumen oil company since Lebedev believed that he could claim part of the money from this deal. The misunderstanding led businessmen to a $2-billion trial.

Now Magomedov and Bilalov deem that they are entitled to half of these funds, as well as their part of $611 million for the sale of their share. The businessmen decided to appeal to an American court, as one of the defendants - Leonard Blavatnik – was a citizen of this country.

Of note, there is at least one more reason for not considering the case in Russia. In his homeland, Magomed Magomedov is named in the case of organizing a criminal community, created for stealing public funds. Magomedov himself, his brother Ziyavudin, and ex-Head of Intex company Artur Maxidov are accused of fraud. Magomed, according to the investigation, was engaged in lobbying political issues and shielded operations.

It is not the first Russian business people go to court in other countries. For instance, in 2012 London held trials between Roman Abramovich and Boris Berezovsky. It was Abramovich that won that trial - Berezovsky could not prove that he was the actual owner of Sibneft shares rather than just a ‘roof,’ as Abramovich claimed.

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