The state transferred the shares of the Far Eastern Shipping Company seized from FESCO shareholders to Rosatom

The state transferred the shares of the Far Eastern Shipping Company (FESCO) seized from FESCO shareholders to Rosatom. Three years ago, the state corporation was already preparing to take control of the Vladivostok Sea Commercial Port, which is part of the FESCO, but until now its cooperation with FESCO has been limited. Rosatom’s plans for FESCO are unknown. But he has 49% in the specialized large transport group Delo, which itself was interested in FESCO. Simultaneously with receiving the asset, the state corporation has already sharply strengthened its role in managing the group.

Shares of the Far Eastern Shipping Company (the parent company of the FESCO group) were transferred as a property contribution of the Russian Federation to the state corporation Rosatom, it follows from presidential decree from November 8. The securities (92.4% of FESCO shares) were confiscated to the state at the beginning of 2023 (see “Kommersant” dated January 12). The package was confiscated after FESCO co-owner Ziyavudin Magomedov, who had been in custody since 2018, was sentenced on December 1, 2022 to 19 years in a maximum security colony (see Kommersant from 1 And December 2, 2022). Rosatom declined to comment, explaining that they do not have the authority to discuss presidential decrees. FESCO told Kommersant that they are not authorized to comment on administrative acts of government bodies and are working “as before, confidently fulfilling the assigned tasks.”

Rumors about FESСO joining Rosatom have been circulating for several years; they became especially loud at the end of 2020 amid a management conflict in the Far Eastern company (see “Kommersant” dated November 11, 2020). But then the parties argued that we were only talking about the participation of the state corporation in the management of FESCO’s key asset – the Vladivostok Sea Commercial Port (VMTP).

In December of the same year, FESCO President Arkady Korostelev clarified that FESCO and Rosatom were preparing to create a joint venture to manage VSTP and the agreement also provided for a joint investment program.

Until now, Rosatom’s cooperation with FESCO has developed mainly in the field of transportation by the FESCO subsidiary of equipment for the state corporation’s projects and the creation within the framework of VMTP of a transport and logistics hub for the transportation of containers along the Northern Sea Route with an investment of 18 billion rubles.

None of the involved structures comment on the further fate of the transferred package. Rosatom already has a large transport asset – the Delo Group of Companies, which also operates in the Far East through the Eastern Stevedoring Company (VSK) in Nakhodka, controlled by it through Global Ports, and the shipping company SASCO. In the Delo Group of Companies, the state corporation owns 49%, another 51% belongs to the founder of the group, Sergei Shishkarev.

Announcement of Rosatom’s entry into the capital of Delo Group of Companies at the end of 2019 sounded extremely unexpected for the market, almost coinciding with the completion of the high-profile process of selling a controlling stake in TransContainer, purchased GC “Delo” for far exceeding the starting amount of 60.3 billion rubles. But Mr. Shishkarev, in an interview with Kommersant, argued that these processes were parallel, and negotiations with Rosatom began after he was asked for a consulting assessment of the state corporation’s plans for the Northern Sea Route (see “Kommersant” dated December 26, 2019).

Further, the group’s cooperation with Rosatom only expanded, and in August 2022, the state corporation early exercised the option to purchase another 19% of Delo Group of Companies (see “Kommersant” dated August 10, 2022), and in August 2023 the parties agreed on parity management of the group (see “Kommersant” dated September 13). Moreover, on November 8 it became known that the parent company of the group, Management Company Delo, would be headed by Rosatom Business Development Director Ekaterina Lyakhova, and TransContainer would come under the control of a manager with a long history of working in the structures of the state corporation (see “Kommersant” dated November 8). Delo Group declined to comment.

Managing partner of the expert center for infrastructure industries HeadWork Analytics Inna Chalchenkova says that taking into account the “special geographical location of the country and the status of the state corporation as the owner of the only nuclear icebreaker fleet on the planet,” the inclusion of FESCO in its perimeter will allow, through the use of terminals in Vladivostok and Murmansk, “to use the positive effect from a significantly shorter route through the NSR from Asia to Europe compared to the route through the Suez Canal.”

The prospects for FESCO’s inclusion in the Delo Group of Companies, for example, with an increase in Rosatom’s share, still look ambiguous.

“Introducing shares into the authorized capital means that they become the property of the state corporation,” explains Maria Lyubimova, partner at Regionservice. Leading lawyer of AB KIAP Rostislav Kats clarifies that the activities of the state corporation in managing such shares are “strictly regulated” by the law on Rosatom, which can give directives, determine the directions of FESCO’s activities and make transactions with shares.

Partner at the Smolenka 33 Bar Association, Elena Mende, adds that since FESCO is not subject to the law “On the peculiarities of management and disposal of property and shares of organizations operating in the field of atomic energy use,” therefore, the disposal of its shares is possible according to the general regulations of Rosatom “: “The state corporation has the right to sell shares of FESCO, but only subject to receipt of appropriate approvals from the supervisory board and directives of the Russian government.” In addition, Ms. Mende notes, the list of joint stock companies in federal ownership is approved by presidential decree, so the transfer of shares to other (private) ownership is impossible without a corresponding decree.

At the same time, processes continue to take place abroad challenging the nationalization of FESCO and the decisions preceding it. Thus, the Magomedov brothers filed a lawsuit in an English court against the former managers of FESCO, its current and former shareholders, as well as Transneft and Rosatom, accusing them of a “global conspiracy” to alienate their property in favor of government agencies and for themselves (see “Kommersant” dated September 27). However, according to lawyers, even a favorable outcome for the plaintiffs will not allow reversing the transfer of FESCO to Rosatom.

According to Rostislav Katz, persons whose rights it violates have the right to challenge the decree on the transfer of FESCO shares to Rosatom, “but from the point of view of Russian law, the Magomedov brothers are not such persons, since they lost their property as a result of a court verdict.”

“At the moment, it is quite difficult to imagine a situation in which the transfer of assets on the basis of a presidential decree would be challenged by anyone within the Russian Federation,” says Ms. Lyubimova.

Under the English process, it is also unlikely that the shares themselves will be taken away. “The subject of the claim in the London court is not the shares as a property right, but their fair value, that is, in essence, the losses incurred, which, if they win, the plaintiffs will have the right to demand from the joint defendants, including Rosatom.” In theory, this means the possibility of foreclosure, including on Rosatom’s assets abroad,” explains Mr. Katz.

Ms. Lyubimova agrees that if the claim is satisfied, Rosatom’s foreign assets “may become the subject of potential foreclosure.” “In any case, the plaintiffs plan to enforce the decision at the expense of the defendants’ foreign assets, so there is no talk of collecting FESCO shares in favor of the plaintiffs,” Ms. Mende also believes.

Elena Mende adds that in the English process, the plaintiffs asked to oblige the defendants (including Rosatom and FESCO) to inform them of their intentions to take certain actions with their assets, including the disposal of shares, reorganization of the company, payment of dividends and repayment of debts. But on October 27, a London court refused to make an order to do so.

“With regard to the claims under FESCO, the court indicated that there is no convincing evidence of the likelihood of alienation of its property, and the scale of the company’s assets and activities is so significant that it is not possible to suspect a possible waste of assets to the detriment of the plaintiffs,” says Ms. Mende. Regarding Rosatom, the lawyer clarifies, the court noted that the activities of a state corporation in foreign countries are almost always the subject of intergovernmental agreements that must be implemented.

Natalya Skorlygina, Anna Zanina, Polina Smertina