Energy firm suspends CEO over Russian real estate deals

London-listed Russian energy company Sibir has suspended its CEO Henry Cameron while the firm investigates controversial real estate deals with its main shareholder, Chalva Tchigirinski.

Solicitors firm Jones Day and accountants Ernst & Young have been appointed to conduct the investigation into an abortive programme announced by Cameron last year to buy $500 mln of real estate from Tchigirinski. Most of the proposed deals were reversed after other shareholders refused to sanction them, but some were carried out. Two deals, the Avtocard and Korimos transactions, were supported by the shareholders and are not subject of the investigation.

Sibir suspended trading in its shares on London's junior market, AIM, last week as it announced Tchigirinski owed the company $325 mln arising from the real estate venture, and not $115 mln as first thought. Sibir has now warned it could take months before the investigation is completed and its shares can begin trading again. Deputy chief Stuard Detmer has been named as acting chief executive pending the outcome.

Tchigirinski has substantial oil and real estate interests in Russia. He featured at number 524 in the 2008 edition of Forbes' billionaire's list, with an estimated wealth of $2.3 bn (EUR1.8 bn). Along with his business partner, Tchigirinski owns 47% of Sibir.

The property deals were presented by Cameron last year as a means of ensuring Tchigirinski would not have to reduce his stake in Sibir as his financial position was pressured by tumbling oil prices and the turbulence on the Russia stock markets.

The assets in question included the 106-room Sovietsky Hotel and the New Sovietskaya project in Moscow, and a 50% stake in the Russia Tower, the Norman Foster-designed skyscraper development, also in Moscow. Work on the 612-metre tower was suspended in November 2008 due to lack of financing.