Report: Former RUSAL chair says astonished US pushed him out
MOSCOW, Feb 1 (PRIME) -- When the U.S. lifted sanctions on UC RUSAL PLC this week, the aluminum producer surprised observers with news of a boardroom shake-up: Chairman Jean-Pierre Thomas, on the job for less than a month, was out, the Wall Street Journal reported late on Thursday.
Thomas resigned following “an imperative request” by the U.S. Treasury Department for him to leave the position, the company said in a statement Sunday.
The last-minute nature of the move offers insight into the fluid nature of negotiations between the Treasury and companies seeking to disentangle themselves from blacklisted investors.
It came as a surprise to those watching RUSAL’s negotiations for the removal of U.S. sanctions, which have drawn accusations of political coziness between the Trump administration and the Kremlin.
Perhaps most perplexed by the ouster: Thomas himself.
In recent weeks, he became the subject of media reports and a U.S. political debate over his views and whether he would be sufficiently independent of the Kremlin.
Thomas learned of the U.S. Treasury’s request only days before the announcement was made, he said in an interview with the Wall Street Journal. “I’m very disappointed and astonished about what happened,” he said.
As of Tuesday, Thomas didn’t know the reason for his ouster, but he suspects politics in the U.S. played a role.
RUSAL didn’t respond to messages seeking comment. And the Treasury wouldn’t provide a clear rationale for Thomas’s dismissal.
Thomas once had served as an adviser to former French President Nicolas Sarkozy and was tasked with boosting economic cooperation between Paris and Moscow.
Some sanctions-policy analysts speculated that public pro-Russia statements he had made in recent years, including on Crimea and on the efficacy of sanctions, had played a role in the dismissal.
“He was too outspoken on some politically charged issues,” said Jason Bush, a senior analyst at the Eurasia Group, a political risk consulting firm.
Thomas said he had spoken as a former politician and as a free man. The comments weren’t made when he was chairman, he said, calling the remarks old news.
Sanctions compliance practitioners have been scrutinizing the deal closely because the Treasury recently signaled to companies that untangling ownership is one way to get off the list.
“It doesn’t inspire confidence in the process of delisting,” said Judith Lee, a partner at law firm Gibson Dunn & Crutcher LLP, whose practice focuses on economic sanctions.
Commodities investors, too, have been watching. RUSAL is the second-largest global producer of aluminum. Prices of aluminum on the London Metal Exchange for delivery in three months fell Monday following the sanctions removal, but they rebounded Tuesday and Wednesday.
RUSAL was hit with U.S. sanctions because it was controlled by a holding company owned by Oleg Deripaska, who was added to the blacklist in April as part of a broader package targeting Russian meddling in U.S. elections, cyberattacks and other provocations. Assets majority-owned by those targeted with sanctions are blocked under a Treasury policy known as the “50% rule.”
The sanctions on RUSAL were never fully implemented; the U.S. were continuing to issue licenses as the company and the U.S. worked out the deal.
The removal agreement, struck in mid-December and executed late Sunday, required Mr. Deripaska to reduce his stake to 44.95% in the holding company, En+ Group PLC. He also lost his ability to control En+. En+ and RUSAL agreed to make changes to their boards, including the dismissal of RUSAL’s chairman, and to provide the U.S. access to corporate documents, such as earnings reports and board minutes.
Many assumed RUSAL’s chairman-turnover requirement had been satisfied on December 27, when sitting RUSAL Chairman Matthias Warnig stepped down. RUSAL said Warnig’s departure was a step toward meeting its end of the deal. Mr. Thomas was appointed the next day and took the helm on January 1.
In his few weeks as chairman, Thomas said he complied with requests made by the Treasury. He agreed to fulfill all the requirements of the agreement, including a monthly certification that the company had continued to comply with the deal, he said.
He watched U.S. media coverage of a failed effort by Congress to block the sanctions removals, and was pleased that the company would soon be able to continue operations.
But in the days that followed, Thomas got word: Treasury wanted him out. He offered to fly to Washington to meet with officials but said he was rebuffed. Instead, the Treasury sent a demand for his immediate departure, he said.
Thomas tendered his resignation Friday. “It was not possible to get any explanation,” he said.
A Treasury spokesman said the department doesn’t intend to comment on individual board member decisions, but added it will provide ongoing oversight and monitoring of the agreement with RUSAL and its holding company going forward.
“Consistent with the terms of removal, (the Treasury) will continue to ensure that these companies take the necessary steps to ensure that Oleg Deripaska doesn’t have influence or control over board members,” the Treasury spokesman said.
The sanctions-removal agreement is still being debated by lawmakers. Democratic House committee leaders said Tuesday they will continue oversight of the decision and are considering additional legislative actions to ensure both sides comply with the letter and spirit of the agreement.
“We do not believe termination of the sanctions has relieved Treasury of its obligation to explain fully this deal to members,” the lawmakers said in a statement.