UC RUSAL has voted against Interros’s proposal that Norilsk Nickel use cash funds to buy back the company’s shares. UC RUSAL has consistently advocated that funds not used in investment programmes should be distributed among all shareholders by way of a dividend. We believe that a dividend payment is the most effective form of using unallocated cash funds in the interest of all shareholders. Furthermore a dividend payment would not infringe upon the rights of minority shareholders who have no intention to sell their shares.

We believe Interros has seized upon the buy back instead of a dividend payment because it is the most favourable form to allocate undistributed cash for them. The bay back will result in an increase of effective share of Interros. Should Norilsk Nickel choose to cancel those shares, Interros will get the opportunity to avoid a mandatory offer to minority shareholders while exceeding the 30% threshold. As a result, Interros will be able to vote with a stake greater than 30%, having de facto legalised its control over the company to the detriment of minority shareholders.

Given its significance, UC RUSAL firmly believes the decision on whether to use USD 2 bln for a buyback should not be made by votes given in absentia, but in an open discussion at a meeting of the Board of Directors. A failure to do so we believe is a serious violation of the principles of corporate governance. We consider Interros’s decision to buy back Norilsk Nickel shares the latest step intended to prevent the re-electing a new Board of Directors at the next extraordinary general meeting, initiated by UC RUSAL

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