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Debt-ridden Russian metals giant Rusal makes its stock market debut on Wednesday in an offering worth $2.24 billion that marks one of the most controversial listings ever in Hong Kong.

The world’s largest aluminum producer will become the first Russian company to list in Hong Kong. Rusal’s depositary receipts are also to float on the Paris-based Euronext bourse. In the lead-up to the initial public offering, Rusal flagged strong interest from big-league investors by selling 1.61 billion shares at 10.80 Hong Kong dollars ($1.40) each.

But while most IPOs in Hong Kong are avidly followed by the Chinese territory’s legions of small-time investors, the Securities and Futures Commission has slapped rare restrictions on Rusal’s offering.

The Hong Kong regulator stipulated a minimum investment in Rusal equivalent to about $130,000, which was described as “unprecedented” by observers of the local securities regime.

Shareholder activist David Webb said the restriction was meant to scare off smaller retail investors and was a “dangerous precedent.” “On one hand, approving the IPO is an implicit endorsement while the restriction is an implicit risk warning,” he said.

Rusal’s 1,100-page prospectus outlined a laundry list of possible risks, including potentially crippling lawsuits, its massive debt of $15 billion, and even the company’s demise should metals prices plunge again.

The company has been dogged by allegations that chief executive Oleg Deripaska has links to organized crime in Russia.

The share-sale document highlights several legal battles, including the possibility of a London court ordering Deripaska to pay $4 billion to fugitive Israeli businessman Michael Cherney over a disputed stake in Rusal.

Cherney is wanted by Interpol over Spanish allegations of money-laundering.

The West African nation of Guinea is suing Rusal for $1 billion in damages from a dispute over the privatization of a refinery used in aluminum production.

Hong Kong’s exchange repeatedly delayed approval for Rusal’s IPO over concerns about the company, particularly its massive debt from when metal prices plunged during recession.

But Rusal has said it reached a favorable deal with creditors to restructure its debt load, while metals prices are now on the rise as the global economy perks up.

And Rusal has said its IPO had still garnered support from 300 institutional investors, including Hong Kong tycoon Li Ka-shing’s Cheung Kong Holdings. Rusal said it secured four key investors for the share sale: Malaysian-Chinese tycoon Robert Kuok, New York hedge fund Paulson & Company, European banking family scion Nathaniel Rothschild and Russian state development bank Vneshekonombank.

Artem Volynets, Rusal’s deputy chief executive for strategy and business development, dismissed the Hong Kong regulator’s restrictions on the IPO.

“Our primary sources of capital are the investment funds who understand our industry well,” he told a press conference on Jan. 11. “We don’t see any potential downside in demand.”

Volynets disputed suggestions that Rusal chose to list in Hong Kong because the city’s disclosure rules were less strict than in New York or London. Hong Kong, he said, was a “primarily strategic” choice because the company wants better access to the metals-hungry Chinese economy.

But investor advocate Webb warned that investors “should still do their homework.”

“The presence of cornerstone investors is of no value to investment decisions,” Webb said. “They can have other interests.” 

Agence France-Presse