Sibir goes to court… | FT Alphaville

Sibir goes to court…

Sibir Energy is fast shaping up as the worst scandal on record to hit Aim, London’s junior Aim market.

On Tuesday, the company revealed it was suing former directors Henry Cameron and Russian businessman Chalva Tchigirinski,  in connection with “unauthorised payments”. The claim currently stands at a mind boggling $328m, although Sibir says that could rise to $400m.

The High Court in London has already granted a worldwide freezing order on Tchigirinski  pending a full hearing of Sibir’s claim.

From today’s statement.

The proceedings are against former directors, Chalva Tchigirinski and Henry Cameron, Gradison Consultants Inc (a company owned by Mr Tchigirinski) and Derbent Management Limited. Mr Cameron has, as a result of his conduct, been dismissed by the Company with immediate effect.

The total amount claimed by the Sibir Claimants is currently not less than US$328 million but it is anticipated that the total claims will, in due course, rise to approximately US$400 million.

The High Court has granted a worldwide freezing order under which, pending a full hearing of the claims, Mr Tchigirinski is prevented from disposing of his assets to the extent the value of his remaining assets falls below £250 million. Gradison is prevented from disposing of its assets to the extent the value of its remaining assets falls below £120 million.

To recap, shares in Sibir, a £2.5bn company until last summer, were suspended earlier this year after it emerged that Tchigirinsk, a cash-strapped oligarch, had somehow managed to “borrow” $200m from the firm without the knowledge of the board.

Sibir had previously agreed to lend Tchigirinsk $115m so the local middleman, and good friend of the company,  did not have to sell his 23 per cent stake in the company. It later transpired that he had borrowed almost three times that amount and now we learn that the cash might have been used in some sort of share support operation.

Again from today’s statement.

As a further result of the ongoing investigation into the Unauthorised Payments, the Company has informed the Financial Services Authority (the “FSA”) that it believes that the price of its shares may have been manipulated between approximately 16 October 2008 and 31 October 2008 and that a significant number of the transactions in its shares between those dates was conducted using money that had been taken from the Company.

Unsurprisingly, Sibir expects its shares will remain suspended for the foreseeable future and shareholders must fear the worst, even though acting CEO Stuard Detmer is making all the right noises about reclaiming the funds “that were taken from our company”.

The sad thing here is that Sibir has actually proved rather good at producing oil from its Salym oil fields in western Siberia. A trading update accompanying today’s shocking news reveals the company is generating cash and profitable.

If only the company had been better at managing its cash.

Since AIM companies  are subject to the sub-contractual “nominated adviser” system in the UK, there is probably good reason here to name Sibir’s “regulator.”

Step forward Rory Murphy of Strand Partners.

Related links:
Sibir suspends CEO over property dealings –
Sibir Energy – the saga continues – FT Alphaville
Sibir gets to bottom of a black hole – Guardian