Trafigura's acquisition of Nyrstar: a historic failure of the Belgian ESG?

By Andrea Galli

A Belgian court has decided to consolidate the lawsuits filed by Nyrstar's minority shareholders against Trafigura, Nyrstar's directors, and Deloitte. Commentators say that the case represents the biggest ‘robbery’ in Belgian industrial history.

The Commercial Court of Antwerp, Turnhout division, has ruled that it has jurisdiction over the lawsuit between 70 minority shareholders of Nyrstar and the international commodities group Trafigura, which is the main shareholder of the zinc processor Nyrstar, Kris Vansanten, representing the minority shareholders, said on Tuesday. Trafigura disputes this and claims that the ruling has been postponed. 

Trafigura previously said that it believed the Belgian company court has no jurisdiction in this case, mainly because the group works with subsidiaries in Malta. According to the minority shareholders of Nyrstar, the court decided otherwise.  

The court in Turnhout also decided to consolidate the lawsuit with another one, filed against the board of Nyrstar and the auditor Deloitte. The latter case is pending at the Antwerp Commercial Court. According to Mr. Vansanten, Trafigura is unable to challenge the interlocutory ruling and, therefore, cannot escape trial in Belgium. "This is very important to us," Kris Vansanten emphasized. "This is a huge step forward. Now we will be able to fight the battle directly. Trafigura's attempt to block justice has failed." 

Nyrstar's minority shareholders accuse Trafigura, the zinc processing company's main shareholder, of having destroyed Nyrstar from the inside by causing a liquidity crisis and repurchasing the company for a pittance. Trafigura, for its part, claims to have saved Nyrstar from ruin by helping it financially in challenging times. 

Trafigura, from 2015 onwards, has placed executives in critical positions at Nyrstar, who nevertheless have allegedly remained loyal to Trafigura. A restructuring plan had allegedly been concocted and implemented in advance by applying infiltration, undermining, and ultimately takeover.  

Herman De Bode, former head of McKinsey Benelux, said this affair is "the biggest robbery in Belgian industrial history." He added that Nyrstar was "the jewel of Belgian industry" but was stolen.  

The financial supervisory authority opened an investigation two years ago and had access to a whistleblower, Nyrstar's former internal auditor based in Zürich. The FSMA (Financial Services and Markets Authority, ed.) has remained virtually silent.

The FSMA stated that its auditor was still investigating Nyrstar's compliance with its market disclosure obligations.  

The FSMA will submit a preliminary report to Nyrstar for comment. The FSMA Board of Directors will receive a final report with three options in it: to refer the report to the Sanctions Committee, to close the case, or to accept an out-of-court settlement. FSMA will continue to keep the market informed of developments in the case.