Russian oligarch Potanin's ex-wife fails to get half of Norilsk Nickel

Russian oligarch Potanin's ex-wife fails to get half of Norilsk Nickel
By Ben Aris November 13, 2015

The owner of Norilsk Nickel, the world's largest nickel and platinum group metals  producer, Vladimir Potanin, is locked in an ugly divorce with his ex-wife. Under Russian law the wife is entitled to half her former spouse's assets if they break up.

That is the theory. In practise it is very difficult to prove ownership on paper. Myriad shell companies put a lot of distance between the ultimate beneficial owner and the assets on the ground. And Russian courts are notorious for not making the effort to go far into the paper trail so few spouses end up with more than a handsome settlement.

Natalya Potanina has sued her husband and just filed an appeal with the Moscow City Court against a ruling by the Presnensky District Court that rejected her claim to half of the metal giant, Interfax reports.

Potanina filed the suit at the end of April in an attempt to take half of Norilsk Nickel and Potanin's holding company, Interros International Investments. She has promised to give the stake to the state if she wins. Russian courts had previous awarded her a monthly alimony of $240,000.

But the case is typical as Potanina had to first prove that almost a dozen offshore companies belong to Interos and her husband and are the beneficial owners of the nickel mine.

The offshore companies are: Boledstone Services, Bonico Holdings, Enalo Trading, ICFI Cyprus, Montebella Holdings, Olderfrey Holdings, Sorange Investment, Tacom Holdings, and Whiteleave Holdings reports Interfax.

"Natalya Potanina still considers that the 30% of Norilsk Nickel, and also the Cyprus-registered Interros International Investments Limited, should be divided as assets amassed over 30 years of marriage," lawyers for Potanina said in the November 12 press release. "Natalya hopes that the Moscow City Court will be more attentive to the documents for submission that confirm that Vladimir Potanin is behind the multi-divisional structure of the Cypriot companies."

While the legal right for a wife to take half her former husband's assets are clear in Russian law, the prospects for a victory in the case by Potanina are poor based on the track record of similar cases. Several high profile oligarchs have divorced their wives and none of them have lost control of their companies as a result, although some of the settlements have run into the hundreds of millions of dollars.

The ex-wife of Roman Abramovich, Irina, won a reported $300m divorce settlement and four homes after her husband abandoned her for the younger Daria Zhukova. The courts estimated Abramovich's fortune at the time at $14.5bn.

Alexei Mordashov, the owner of Severstal Steel mill and worth an estimated $12bn today, divorced his wife of 10 years and left her living in their original two-room flat in the factory city of Cherepovets, an old car and a $200 a month allowance. That was until after some prodding from a rival oligarch his wife filed a divorce suit against her ex claiming half his fortune. Not only did she lose the case, but the court ordered her to pay damages of $6mn. She eventually took the case to the European Court of Human Rights after which the matter was settled privately.

The exception to the rule is the $4.5bn divorce settlement awarded last year by a Swiss judge to Elena Rybolovleva against her estranged husband, potash magnate Dmitry Rybolovlev. This was possibly the largest divorce settlement in history.