BRUSSELS, Jan. 14, 2002 (paperloop.com) - Ilim Pulp has launched a legal battle to regain control of the Bratsk pulp and paper mill in eastern Siberia, near its border with Mongolia. The Bratsk mill and its subsidiary, Celulose Carton Plant or TsKK, have been served court orders to surrender control of the company. Ilim Pulp has spent $100 million building up an 86 percent stake in the company since it first began buying shares in Bratsk in 1997. On top of that, the Russian producer has invested $50 million in the mill over the past four years. The Bratsk mill produces some 400,000 tonnes/yr of market pulp and 180,200 tonnes/yr of board. But Ilim Pulp is now facing its biggest legal battle to recover control of Bratsk from the Russian aluminium conglomerate, Sibal. According to Ilim Pulp's spokesman, Svyatoslav Bytchkov, Sibal gained control of Bratsk through a frequently used scam. Bytchkov explained that a minority shareholder acquired a 2 shares stake in the board mill on Dec. 18, 2001, and then signed her power of attorney as a shareholder over to a group affiliated to Sibal. Sibal used its status as minority shareholder to overthrow an earlier board decision to dismiss Georgy Trifonov as managing director of TsKK. On Dec. 21, Trifonov terminated a $20 million debt restructuring agreement between Bratsk and the energy company, Irkutsengo. The energy company is 30 percent owned by Sibal's sister company, Russian Aluminium. According to Bytchkov, Ilim Pulp believes that Trifonov was being blackmailed by Sibal and has been used as a pawn to gain control of the pulp and paper plant. Trifonov stayed just long enough at the site to fire the existing board and sign off the termination of the debt restructuring agreement and has not been seen since. Sibal's representatives reportedly arrived at the Bratsk mill accompanied by 20 gunmen. "They are like pirates," said Bytchkov. Sibal simultaneously filed a lawsuit with the courts to register the Bratsk mill as bankrupt. Under Russian law, the courts can seize control of a bankrupt company and award operational management to a third company, in this case, Sibal. Bytchkov added that Sibal used its connections in the Russian courts to gain interim ownership of Bratsk. "Sibal has a strong hand in the justice system," said the spokesman. But Ilim Pulp has fought back against the hijack of Bratsk pulp and paper mill. The company has filed a lawsuit against the move and has lobbied for the case to be discussed in the Russian parliament, the Duma. On top of that, the producer has asked the US chamber of commerce to support its action through the US embassy in Russia as Ilim Pulp has two American shareholders. Ilim Pulp has successfully won a court ruling to overrule the earlier judgment from local and regional courts that Bratsk was bankrupt. The minority shareholder that originally blocked the removal of Trifonov withdrew her complaint on January 10. But local armed marshals continue to stop Ilim Pulp from reclaiming control of the Bratsk mill.