Brian Gilbertson will not be chief executive of SUAL, Victor Vekselberg's aluminium company, when the company is taken over by Oleg Deripaska's United Company Rusal next month. Nor will Gilbertson become the chairman of the successor company -- the new Rusal -- to pilot it through a proposed London share offering sometime in the next year or so.
According to the protocol aboard pirate vessels, those who walked the plank were obliged to do so, usually by the prospect of a certain death at sword's edge, if they refused; and the improbable, but not impossible chance of swimming to safety through shark-infested waters. Gilbertson's plank-walk is the first in pirate history to indicate that the victim has a better chance of reaching safe haven than the pirate vessel from which he is departing.
Officially, SUAL told Mineweb it will not comment on reports already published that Gilbertson has been ousted by Vekselberg, after an argument over Vekselberg's obligation to pay Gilbertson the multi-million pound bonus he was promised when Gilbertson was first engaged in August 2004. Some reports claimed at the time that the amount was £50 million.
But there was also a condition -- that Gilbertson could take SUAL and Vekselberg to market, and successfully lead the company through a London IPO. If Vekselberg is now claiming that Gilbertson hasn't earned his bonus, he isn't saying. But he may be right. On the other hand, Vekselberg has yet to prove that he will spend money on anything he promises the international market.
Gilbertson himself is guarded. "SUAL as we know it today will not exist after merger completion," he told Mineweb. "Beyond that, there is really not much that I want to say at this point."
Gilbertson had replaced fellow South African Chris Norval, who had been CEO of SUAL International when Vekselberg launched the international form of the company in January 2003, along with partner Roddie Fleming, head of the London-based Fleming Family & Partners (FF&P). "SUAL as a vertically integrated [aluminum] company will be transformed into a diversified company which will also have assets in the ferro-nickel, tantalum and coal sectors," Vekselberg said at the time. International banking sources believe that Norval accomplished little to attract either assets or investors to hit the $3 billion in capital targeted at the time of the launch of the Vekselberg vehicle.
With the advantage of four years of hindsight, that wasn't Norval's fault. Fleming refused to put much of his own money into the venture, and was ousted by Vekselberg for failing to attract anyone else's. Gilbertson has now followed both Norval and Fleming into the water.
In September 2004, after Gilbertson took over SUAL, Mineweb reported that he was the newest and most prominent of the non-Russians, who have been engaged to manage the oligarch-controlled companies, sit on their boards of directors, direct their legal and accounting departments, negotiate their borrowings, plan their mergers and acquisitions, or persuade investors to buy their shares and bonds. But, Mineweb asked at the time, could he and the others feel financially secure in managing Russian operations whose internecine complexity requires forensic skills that are beyond their ken?
In Gilbertson’s case, since SUAL apparently had not obtained – or would not acknowledge -- directors and officer's liability insurance cover for him, he may be directly and personally at risk of investor litigation claims. What western executive would risk his reputation and personal fortune in taking a position in these enterprises that would expose them to the type of liability claims now filed against Russian oil company Yukos, its shareholders, American executives, and auditors? What insurance company would write a policy to protect Gilbertson, in the event of a lawsuit against Vekselberg in future?
This week, Rusal, the most secretive aluminium producer in the world, has let slip that Gilbertson is no longer Deripaska's candidate for chairman of the merged company, without explaining why. In its deal announcement on October 10, Rusal had said: "The Board of Directors of the new company will consist of 12 members. Brian Gilbertson, currently SUAL’s President, will act as the non-executive chairman."
Rusal ought to be able to explain to prospective public shareholders why this will no longer be the case. But it cannot. The reason, as Mineweb has reported before, is that one of the conditions for the merger approval, which has been made clear to Deripaska, is that the Kremlin insists on a Russian to head the company.
Gilbertson thus becomes the most senior international executive to have studied the value of Vekselberg's and Deripaska's undertakings. His silence during the Rusal IPO may prove to be more golden than his chairmanship of the float might have proved.