Two candidates for the board of directors of the industrial group Sulzer withdrew at the last minute. This is not only, but also due to the company’s close ties to the outlawed Russian major shareholder Viktor Vekselberg.
As the new President of the Board of Directors of Sulzer, Suzanne Thoma faces a difficult task.
Heike van de Kerkhof is one of the few women who have made it to the top of a company in the male-dominated chemical industry. The 59-year-old boss of the Basel-based textile chemicals company Archroma would have been a good choice for the Sulzer board of directors. In addition to oil companies and water suppliers, companies from the chemical industry form an important customer group for the Winterthur industrial group. With van de Kerkhof, the number of women on the Sulzer Board of Directors, which previously consisted of eight people, would have increased from two to three.
Too many mandates
But van de Kerkhof gave up his candidacy at the last minute. The decision was only announced on Tuesday evening and thus less than 24 hours before the General Assembly (GA), which was held without an audience. The waiver was justified “with personal reasons”.
When asked, van de Kerkhof declined to comment further, but according to well-informed sources, she apparently had to reckon with a bad election result. In shareholder circles, complaints had been made that the manager, who came from Germany, expected too much from a mandate at Sulzer. According to her profile on Linkedin, the Archroma boss has been on the supervisory board of Dutch fertilizer manufacturer OCI and British chemical company Venator for a good year.
Pressured to resign?
In the same communique, sent out by Sulzer on the eve of the AGM, it was announced that Mikhail Lifshitz would refrain from running for office again. There was no justification for this. However, the suspicion is obvious that the Russian and close confidante of Sulzer’s major shareholder Viktor Vekselberg was pressured into resigning.
Lifshitz serves on the boards of six other companies, four of which are based in Russia. These include the gas turbine manufacturer Rotec, whose service unit was acquired by Sulzer at the end of 2016 was acquired.
Lifshitz was first elected to the Sulzer Board of Directors in 2016. With Russia’s declaration of war on Ukraine, however, his many contacts to Russian industry have lost almost all meaning for the company.
Only service work in Russia
Last year, Sulzer’s sales in Russia, at 86 million francs, were less than 3 percent of the group’s sales of almost 3.2 billion francs. In the first quarter of 2022, new orders in the Russian market fell by 80 percent compared to the same period last year.
According to Frédéric Lalanne, who has been in charge of Sulzer’s business as the new CEO since February 18, 2022, only service orders will be processed in Russia, but no more new machines will be delivered to the country. The main focus is on essential services for the water and electricity industries, he told an investor conference call.
Although no explanation could be obtained from Sulzer about the background to Lifshitz’s resignation from the board of directors, the company should not be unhappy about having only two instead of three representatives of Vekselberg on the board of directors. Alexei Moskow and David Metzger from the sphere of influence of the Russian investor, who was already sanctioned by the USA in 2018, remain on the committee, which has shrunk from eight to six members. Vekselberg, via Tiwel Holding, remains the largest shareholder in the pump manufacturer with a 48.8 percent stake, but has no access to dividends and is not allowed to increase or decrease its stake.
Loss of investor confidence
Either way, the management of Sulzer and, in particular, the new Chairwoman of the Board of Directors, Suzanne Thoma, is faced with a difficult task. In the face of the war against Ukraine and more and more atrocities by the Russian army, every company with close ties to Russia has to face critical questions. According to Lalanne, Sulzer still has no trouble recruiting new employees, but as the war goes on, specialists could turn away from the company.
Investor confidence has already suffered severely. Since the beginning of the year he has stock price from Sulzer lost more than 16 percent. According to analysts at Helvetische Bank, the company’s securities should continue to be traded “at a significant discount”.