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Electrician leads minority shareholder action against BP in Siberia

Andrey Prokhorov claims BP harmed its Russian joint venture TNK-BP by preventing alliance with Rosneft

A lone electrician is pressing ahead with a multibillion-pound legal claim against BP with a hearing in Siberia.

Andrey Prokhorov, a tiny shareholder in BP’s Russian joint venture TNK-BP, is fronting a minority shareholder action following the UK-listed firm’s failed efforts to sign a separate Russian partnership with the state oil group Rosneft last year.

In two cases that currently total around R500bn (£10bn) Prokhorov is claiming that BP damaged TNK-BP – which is jointly owned by the British-based oil group and a collection of Russian billionaires – by preventing it from participating in the proposed Arctic alliance with Rosneft.

That deal collapsed last year, causing huge embarrassment to BP, when the Russian billionaires fought their own successful legal action against their British partners to block the deal.

Both of Prokhorov’s two claims have already been rejected by the Russian courts, but in an appeal hearing in the appellate court in Omsk, Siberia, the minority shareholder will seek to invalidate a resolution by the TNK-BP board not to join a class action against the TNK-BP directors nominated by BP, who Prokhorov says must have known about BP’s Rosneft intentions.

The electrical engineer is believed to own 0.0000106% of TNK-BP, which his lawyers Liniya Prava say he acquired when the forerunner to TNK-BP was privatised by the Russian government. In total, all minority shareholders own less than 1%.

Liniya Prava has claimed that its clients have come under pressure from local law enforcement bodies to drop their claims, although that has been denied by the agencies. Meanwhile, Rosneft has consistently said it would not have considered offering the partnership deal to TNK-BP, which it says lacked BP’s expertise in offshore development.

The Russian billionaire shareholders, known collectively as Alfa-Access-Renova

9AAR), are pursuing their own separate case for damages in Stockholm, claiming the proposed BP-Rosneft deal breached a shareholder pact which granted TNK-BP first right of refusal to any new energy deals in Russia or Ukraine.

AAR denies any connection with the minority shareholders’ case. However, that has not prevented questions over how Prokhorov could be financing such an expensive legal campaign. Liniya Prava says it is funding the proceedings.

A spokesman for BP said: “The court has already decided to decline both claims brought in the name of Andrey Prokhorov. BP considers this decision as reasonable and well-grounded. The claims were initially absurd and legally groundless, because there were and could be no damages for TNK-BP.”

However, the constant pressure of legal cases is having an effect. Last month, Gerhard Schroeder, the former German chancellor, and Jim Leng, the ex-Corus chairman, both resigned as independent directors of TNK-BP. They were understood to have grown tired of the stream of legal battles. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds