Oleg Deripaska, the chief executive of Russian aluminium giant Rusal, has suffered an unexpected setback in his efforts to increase his influence on the board of Norilsk Nickel, Russia's largest nickel producer. At Norilsk's annual meeting this week, Rusal, which has a 25 per cent stake in Norilsk, was only able to secure the election of three of the four board directors to which it is entitled. It also failed to secure the re-election of its choice of chairman, Alexander Voloshin. Meanwhile, Interros, which also owns 25 per cent of Norilsk, got the four board seats it is entitled, and was able to secure the election of its favoured candidate for chairman, Vasily Titov, a deputy chief executive of state-run bank VTB. The vote signals the end of a peace pact imposed by the Kremlin on Rusal and Interros, which have both been vying for control of Norilsk. Rusal said the outcome of the recent board vote was a result of the 'manipulation' of the company's treasury shares. It also said: 'The management of the company used shares that had been transferred to offshore companies to contribute to the election of Norilsk Nickel managers who are subordinate to and report to the [chief executive] of Norilsk.' This was a 'gross violation of corporate governance procedures', it said. However, people familiar with the situation told the South China Morning Post that Rusal had submitted a list of 11 candidates for the board even though it was only entitled to four. As a result, its votes were spread too thinly to secure the election of its candidates. Observers say the attempt to get 11 members elected to the 13-man board was an attempt to seize control of the company. 'Deripaska (pictured) needs to take control of Norilsk to use it as a tool to restore the fortunes of his main enterprise, Rusal,' one insider told the Post, on condition of anonymity. He said Rusal had attempted earlier in the year to push the Norilsk board into a dividend payout for 2009 of US$3 billion even though the company's reported net income for the year was US$2.65 billion. It was a need for cash to reduce its US$16.8 billion debt that saw Rusal's controversial listing in Hong Kong this year. Observers say Rusal's actions at the annual meeting to breach the Kremlin-brokered pact with Interros stems from concerns over Rusal's financial health, a view which Rusal disputes. Rusal's listing prospectus warns that should the aluminium price fall 20 per cent below US$2,051 per tonne, its assumed average price for this year, to US$1,640, together with a decline in the US dollar, then Rusal could default on its loan covenants. Aluminium is currently trading at US$1,962 on the London Metal Exchange. It hit a high of US$2,450 this year and a low of US$1,800. Rusal has called for an extraordinary meeting in an attempt to reinstate Voloshin. If this move proves unsuccessful, then analysts say this could signal further difficulties for Deripaska in future.