A group of about 100 Nyrstar NV shareholders is seeking damages of €1.48 billion from Trafigura Group Pte. Ltd. after the latter secured a 98% stake in the former's assets as part of the Belgian company's restructuring, Reuters reported Oct. 12.
Additionally, Nyrstar received an unsolicited offer from Trafigura to buy the remaining 2% stake for €22 million.
In a lawsuit filed in Belgium, the minority shareholders accused Trafigura of using its influence to sway the zinc refiner's board into making lopsided deals that drained cash from Nyrstar and led to its collapse. Trafigura said its contracts with Nyrstar were market based and not the cause of the company's financial troubles.
The shareholders also claimed that Nyrstar's board did not pursue profit, acted against its legal duties and committed fraud, according to the report.
The formal filing will be put to the Brussels commercial court just after the shareholders' general meeting Nov. 5, according to law firm Watt Legal, which represents the group of minority Nyrstar shareholders.
As part of the lawsuit, the shareholders will seek to reverse the Nyrstar board's April decision to accept the restructuring terms.
Meanwhile, both companies said they have not received any legal claim and consider the allegations made through the media baseless, while planning to strongly defend themselves against any legal claim is made.
Nyrstar added that without the recent restructuring, groupwide insolvencies were likely to have occurred and creditors would receive significantly less recoveries while shareholders would receive none.
As an alternative to canceling the deal, the shareholders are seeking €980 million in compensation from Trafigura and an additional €500 million over allegations that Trafigura abused its position as the single largest shareholder in the company since 2015. The shareholders will also seek damages for communication deficiencies.
Belgium's Financial Services and Markets Authority has also opened a formal investigation into Nyrstar, according to the report.