Dirty Business»

Minority shareholders in Russia's sixth-biggest oil producer, Tatneft, have appealed to the Turkish government to block the purchase of a $1.3 billion stake in the state-owned oil refinery Tupras after alleged procedural violations.

Marc Dreier, an American lawyer representing the Tatneft investor Imanagement Services, said his clients were "deeply troubled by Tatneft's apparent violation of both Russian and American law in connection with (the Tupras) auction". He has also written to the US Securities and Exchange Commission raising concerns about the way Tatneft bought the Tupras stake via an obscure German company called Efremov Kautschuk, but did not disclose its involvement to shareholders until the day after the bid was successful.

Tatneft stock is available to US investors through American depository receipts, or ADRs, which are regulated by the SEC. Lawyers for Tatneft investors told the SEC last week: "We believe Tatneft's failure to make prior disclosure was a material omission in violation of the federal securities laws."

Shareholders also allege that the transaction, which involved more than 50 per cent of Tatneft's assets, was not approved by every director or by a majority of the shareholders at a general meeting, in breach of Russian law.

In addition to investors, a union representing oil refinery workers in Turkey filed a lawsuit and is also seeking to bring criminal charges against the High Privatisation Council, chaired by the prime minister, to reverse the sell-off of the 66 percent stake in Tupras.