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Case 1:04-cv-01482-GMS

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UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ______________________________________ BASE METAL TRADING SA et al Plaintiffs v. RUSSIAN ALUMINUM et al. Defendants. ______________________________________ DECLARATION OF DOV RIEGER I, Dov Rieger, pursuant to the provisions of 28 U.S.C. §1746, hereby declare as follows: BACKGROUND 1. I am a citizen of Israel. From 1999 to the current date, I have been a Docket No. 00 Civ. 9627

director and owner of Holdex, LLC ("Holdex"). 2. I submit this affidavit on behalf of Holdex.

PURCHASE OF GOK SHARES FROM POLYPROM 3. On January 20, 2000, Holdex purchased 2,307,984 shares (1.20 %) of

Open Joint Stock Company Kachkanarskii GOK "Vanadii" ("GOK") from Limited Liability Company Polyprom ("Polyprom"). (See Exhibit 1). 4. Polyprom had purchased these shares from Limited Liability Company

Trading House OJSC "Vanadii" ("GOK Trading House") on January 18, 2000. (See Exhibit 2).

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5.

I am informed that an action was filed by GOK against Polyprom to

invalidate the sale of shares from GOK Trading House to Polyprom as well as all subsequent sales, namely, from Polyprom to Holdex, and to have the shares returned to GOK. 6. Holdex fully complied with the terms of its January 20, 2000 contract with

Polyprom and at the time of the GOK's petition to invalidate the sale of shares was the true owner of the shares in question. 7. However, Holdex was not served, joined or notified of, the action filed by

GOK seeking to take back the shares owned by Holdex. 8. I am informed that an order invalidating the sale was entered by the

Kalmykia Arbitrazh Court ("KaAC") on November 22, 2000. (See Exhibit 3). 9. Holdex was not notified of this action and did not participate in the action,

nor did it receive any notice about the November 22, 2000 order that disposed of its property. 10. I am informed that the November 22, 2000 order was later reversed by the

North Caucasus Federal Arbitrazh Court by order dated April 17, 2001. (See Exhibit 4). 11. Holdex was not notified of, and did not participate in this appeal, nor did it

receive any notice about the April 17, 2001 order that directly affected its property. 12. I am informed that a hearing was held on July 5, 2001 after the matter

returned to the lower court. (See Exhibit 5). 13. the hearing. Again, Holdex was not notified of this hearing and did not participate in

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14.

I am informed that by order dated September 10, 2001, the KaAC ordered

that Holdex be joined as a party to the proceeding, and required that Holdex present the evidence of title to the shares in question. (See Exhibit 6). 15. According to the September 10, 2001 order, Holdex appeared as a third

party at the hearing at the appellate instance of KaAC that took place on November 9, 2001. (See Exhibit 7). 16. 17. Holdex was represented at the proceeding. The Appellate Court affirmed the ruling made at the July 5, 2001 hearing

in which Holdex neither participated nor had notice. 18. At the November 9, 2001 hearing, the court examined the record and

concluded that, according to the register of GOK shares, the title to the shares in question was transferred from GOK Trading House to Polyprom on January 21, 2000. This was corroborated by the Contract # 3 dated January 18, 2000 between GOK Trading House and Polyprom (when both companies existed and both persons who signed the contract were duly authorized to do so). The court proceeded by reviewing a note prepared by the company that registers the transfer of shares, Panorama, which indicated that the transfer took place in January, 1999, and the document purporting to be the contract for the sale of the same shares, dated January 18, 1999, which were presented by GOK. While one of the companies did not even exist at the time of the purported 1999 contract, and the persons who "signed" that contract were not authorized to do so (upon information that I have, one of the signatories, Chervinsky, did not even work for GOK Trading House at that time), the Appellate Court concluded that the shares in question were sold under the January 1999 contract, and not under the January 2000 contract.

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19.

Proceeding from that, the court concluded that, since the parties who

"signed" the 1999 contract were not in a position to sign, and Polyprom did not exist at the time the contract was "signed," the contract was invalid and the subsequent sale was invalid. Accordingly, the Appellate Court ordered that the shares be returned to GOK in compliance with the July 5, 2001 order. 20. To summarize, GOK tried (and succeeded) to take back millions of shares

that had been properly sold, in compliance with all procedural requirements and with proper payment, to Polyprom and then to Holdex, LLC, by engaging in judicial maneuvers behind the back of the lawful owner of the shares, Holdex, LLC, without even an attempt to give any notice. After Holdex learned of the attempts to take its property and tried to intervene, GOK succeeded in obtaining a decision of the Appellate Court dated November 9, 2001, whose reasoning beats any conventional standards of logic. In the end, Holdex lost 2,307,984 shares that it acquired in good faith and for value.

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EXHIBIT "1"

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EXHIBIT "2"

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EXHIBIT "3"

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