Russian court orders Sistema to pay Rosneft $2.3 billion in damages
A Russian court ruled on Wednesday that the Sistema conglomerate should pay more than 136 billion roubles ($2.3 billion) to oil major Rosneft over the acquisition of the Bashneft oil producer, Sistema said.
The court battle, initiated by state-owned Rosneft, has rattled Sistema`s shareholders, and rekindled broader fears about investor rights in Russia.
A Sistema spokesman said the company would appeal the decision.
"On the whole, the process has been one-sided, without any impartiality at all, which had predetermined today`s ruling," the spokesman, Sergei Kopytov, said.
The amount the court ordered Sistema to pay was less than Rosneft`s initial claim of almost 171 billion roubles. Interfax news agency quoted a Rosneft spokesman as saying the company would consider whether to appeal.
Sistema`s shares have almost halved in price since earlyMay, when Rosneft lodged its claim. After Wednesday`s verdict the shares fell by around 2 percent on the day in Moscow, while Sistema Global Depositary Receipts in London were up more than 2 percent.Rosneft is headed by Igor Sechin, a close ally of President Vladimir Putin and one of the most influential businessmen in Russia.
The company claimed Sistema did not act in good faith when it bought the shares of mid-sized oil producer Bashneft in 2009 and subsequently reorganised it. Sistema has disputed that.
Rosneft bought a controlling stake in Bashneft last yearfrom the Russian government in a multibillion-dollar deal.
Bashneft had been controlled by Sistema, but the governmentseized Sistema`s stake in Bashneft in 2014 because it said Bashneft`s privatisation had been illegal.
Rosneft`s lawyers told the arbitration court in the city of Ufa during the hearings that Sistema had known about the risks associated with the purchase of Bashneft, which had fought off multi-billion tax claims from the government.
In June the court froze more than $3 billion of Sistema`sassets, including part of its 50 percent stake in telecomscompany MTS as an interim measure while consideringRosneft`s lawsuit.
Shares in MTS, which is listed in Moscow and New York, were up on the day.
($1 = 59.0800 roubles)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.