Russian Oil Giant Rosneft Sues Oligarch's Rival Conglomerate

May 3, 2017 — 15:00
— Update: May. 03 2017 — 12:42

Russian Oil Giant Rosneft Sues Oligarch's Rival Conglomerate

May 3, 2017 — 15:00
— Update: May. 03 2017 — 12:42
CEO of state-controlled Russian oil company Rosneft Igor Sechin attends the ASEAN - Russia summit in the Black Sea resort of Sochi, Russia Sergei Karpukhin/Pool Photo via AP

Russian state-owned oil giant Rosneft has filed suit against oligarch Vladimir Yevtushenkov's Sistema conglomerate, sending Sistema's stock prices into free fall.

Rosneft is seeking 106.6 billion rubles ($1.87 billion) from Sistema in a case connected to Bashneft, a regional oil company and Rosneft subsidiary that previously belonged to the conglomerate.

Details of the case are scarce, but Rosneft Spokesman Mikahil Leontyev told the Interfax news agency that the suit centers on assets stripped from Bashneft. These actions led to the “devaluation” of Bashneft, he told the RBC agency.

As news of the suit went public, Sistema's shares fell by over 25 percent on the Moscow Exchange.

Until 2014, Sistema owned a majority share in Bashneft. However, that year, the Bashkortostan-based oil company was “re-nationalized” after a court ruled Yevtushenkov's company had improperly privatized it.

Then, in October 2016, Rosneft purchased a 50.08 percent share in Bashneft, a move that secured energy behemoth's dominance in the Russian oil industry.