Spanish oil company Repsol is suing BNY Mellon, alleging the company failed to carry out voting instructions in relation to the election of a new board for Argentine oil company YPL following the De Kirchner governments takeover of a 51% stake in the company in April. It is suing BNY Mellon for more than $50 million.
In a complaint filed with the New York State Supreme Court (Manhattan), Repsol alleges BNY Mellon failed to carry out voting instructions because they were received after BNY Mellons deadline. This meant that Repsol missed out on exercising its right to appoint three directors and two alternate directors to the board, said the complaint.
The complaint also named YPF, which is now 12%-owned by Repsol, as a defendant.
The complaint said the YPF Expropriation Law left Repsol with voting rights with respect to a minimum stake of 6% of YPFs Class D shares. Repsol holds its shares of YPF directly and through its ownership of YPFs American Depositary Shares (ADSs). BNY Mellon serves as the depositary for YPFs ADSs and administers YPFs American Depositary Receipts (ADRs)
BNYs refusal and failure to carry out Repsols indisputably timely voting instructions and to vote the pledged ADSs at the YPF shareholders meeting held on June 4, 2012, was based on BNYs own internal failure of communication and the improper interference of YPF in disallowing Repsols instructions, Repsols complaint said.
BNY Mellon declined to comment on the case. However, an industry source explained that as a depositary bank, BNY Mellon only acts as an agent and intermediary in the ADR proxy voting and tabulation process and exercises no independent discretion with respect to the proxy distribution process nor with respect to the lodging of voting instructions received and provided in accordance with the deposit agreement.
Repsol said in April it considered the Argentine states plan to takeover YPF to be unlawful.
The case is Repsol SA (REP) v. Bank of New York Mellon, 652653/2012, New York State Supreme Court (Manhattan).
(JDC)