I got back from Dubai and went straight from the plane into the thick of it: the very next morning there was a meeting between Rosneft management and shareholders. I had to show up indecently tanned. The Rosneft people, who at gatherings like this usually stand around in little circles of 4–5 before things begin, gave me a double helping of hostile looks and quiet hissing when I appeared. You could understand them: they’d been dragged in on a day off to “work with minority shareholders,” and the most scandalous minority shareholder of them all had clearly just rolled in from somewhere sunny — and was smirking, too. Oh well. They’ll survive. The meeting was billed as "Information Transparency and Disclosure to Shareholders." I assume this was their PR response to my lawsuits and the media fuss that followed. As if to say: now we’ll show everyone what serious efforts we’re making to improve transparency. For that purpose: they invited some uncle-type law professor, who gave an enormous lecture on “Shareholders’ Rights,” practically reading out the entire Joint-Stock Companies Law. they showed a presentation called "What a Wonderful Website Rosneft Has." It was total trash. “And on this slide you can see that our website has a section called ‘For Shareholders,’ which contains the following subsections.....” The climax of the presentation was the announcement that Rosneft’s website had won some kind of award in some kind of corporate website competition. some guy from the FSFM spoke (the Federal Financial Markets Service, Russia’s former market regulator), declaring that the FSFM stands guard over the interests of shareholders and investors. People endured it, got bored, suffered through it, and of course when question time came, they unloaded on the presidium full force. First, everyone was outraged by the absence of management. Management had promised to attend these meetings, but there was no sign whatsoever of Sechin or Bogdanchikov. Not a single board member, not a single deputy. It’s not hard to guess why: the guys simply had nothing to say. At the beginning of June they were all cheerfully telling us from the podium: “Don’t pay attention to the low dividend yield, look how the stock is growing! Rosneft is a real company and no crisis can hurt it.” Now, for those charts they were drawing at the General Meeting, they could have gotten a tomato in the face from the audience. Not even the FSO (Russia’s Federal Protective Service) would have helped. Second, an initiative group of shareholders had met with someone from Rosneft the day before (I wasn’t there), and they had been firmly promised that the company would present a clear position at the meeting on what it planned to do during the crisis, a possible buyback, and so on. Not a word of that was said, apart from: “That’s above our level, we can’t say anything.” And third, no actual requested information was provided. I again raised questions about Gunvor, about the Chinese contracts on which enormous amounts of money are being lost, and so on. Those present asked about spending on various athletes and Olympics-related items, top management compensation, and other interesting little things. The answers showed no variety: a) you have no right to know this information; b) this is not within our competence. But the main show involved the following. On June 5, at the general meeting, shareholders were allocating profits. They allocated them as follows: 17 billion rubles for dividend payments. 145 billion rubles for “investment and the socio-economic development of Rosneft.” Even back then, on June 5, shareholders stood up and asked: could we maybe see exactly what those 145 billion are being spent on? To which Sechin replied: no problem, take a look, there are big plans for Eastern Siberia, exploration, production, and all that. In the end, the information was never disclosed. A month and a half ago I wrote a letter: guys, as a shareholder, I demand that you provide information in any form whatsoever (cost estimate, budget) on where you plan to sink those 145 billion, taken from the company’s net profit. And so, right on the eve of this meeting, I get a letter from Rosneft: dear Alexei Anatolyevich, you are not entitled to know such information. Because you do not own 25% of the shares. Let me explain the situation in simple terms: You invested money in a company. 1 ruble. The company earned 100 rubles in net profit. The shareholders got together and decided: we’ll send 30 kopecks to dividends, and invest the remaining 99.70 in production. You grumbled, but there was nothing you could do. You decided to keep an eye on how that 99.70 is being spent. Just in case. What if, instead of investing it in production, someone bought 99.50 worth of candy? And they tell you: no, you’re not entitled to know that. Whether it’s candy or exploration of Eastern Siberian oil fields is none of your concern. Management knows best. Unbelievable, right? What shareholder rights can anyone even talk about after that? Though when I read this letter aloud, even the guy from the FSFM sitting on the presidium was outraged and said that in his opinion this kind of information cannot be hidden from shareholders. That’s how it is. But on the positive side, I can report that at that same meeting several minority shareholders, myself included, officially created an initiative group. Everything by the book: signatures, prOtocol, handed over, received, fingerprints and all. We’ll keep fighting. Media coverage on the subject:
The Alekperov Example At the meeting with Rosneft managers, its minority shareholders were more interested in the crisis than in the company’s openness with information. For the first hour and a half, the minority shareholders listened to explanations of their rights while whispering among themselves about the market collapse. More Anti-People Shares (Vremya Novostei) Shareholders Want to Know More (RBC Daily)
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