MOSCOW, Nov 11 (Reuters) - Czech firm PPF Investments said on Sunday it is ready to talk with Russia's Basic Element in hopes of settling a dispute between them over an increase in the share capital of Ingosstrakh, a major Russian insurer in which the two parties are major shareholders.
The dispute follows a general meeting of Ingosstrakh shareholders on Oct. 8, when Basic Element, as the controlling shareholder, voted to quadruple the firm's registered capital to 10 billion roubles through a closed issue of shares.
The share issue threatens to dilute PPF's stake in the insurance company from 38.5 percent to less than 10 percent.
"PPF Investments is prepared to discuss the increase of the capital. But this must be transparent and must respect the rights of all minority shareholders," PPF director Tomas Brzobohaty said in a statement released late on Sunday.
"We do not want to be cheated again," he said.
PPF says it was not invited to vote on the capital increase, which could never have been approved if its votes had been counted.
"We can in no way tolerate the fact that a shareholder was denied his principal right to participate in and vote at a general meeting," PPF's statement said.
Responding to the statement on Sunday, a Basic Element spokesman said the company, which is an industrial holding company controlled by Russian billionaire Oleg Deripaska, had never objected to PPF's participation in the share issue.
"In principle we do not oppose its taking part and we never did," the spokesman said.
He added that he was not aware of any invitations to hold formal talks with PPF, which has filed a complaint over the issue with Russia's financial watchdog, the Federal Service for Financial Markets (FSFR).
Sunday's statement from PPF also sought to add weight to PPF's allegation that the Oct. 8 shareholders' meeting was kept secret to prevent PPF from casting its votes.
It said it has post office records that show letters to PPF about the shareholder meeting were withdrawn shortly after they were posted.
"We have justified concerns that should FSFR approve the process aimed at the increase of registered capital the majority shareholder (Basic Element) will again prevent us from participating in the process," the statement said.
While opening the door for discussions, PPF's statement sharpened the tone of the dispute, describing the actions of Basic Element as "scandalous" and "blackmailing".
PPF also launched a Web site last week www.IngoVeritas.eu to publicise its claims against Basic Element and Ingosstrakh.
One of the headings on the site says, "Help! Robbery!" (Reporting and writing by Simon Shuster; Editing by Greg Mahlich) ((dmitry.solovyov@reuters.com; +7 495 775 1242; Reuters Mesaging: dmitry.solovyov.reuters.com@reuters.net))
Keywords: CZECH RUSSIA/INSURER
