Alexei Mordashov doesn’t seem very sure what he wants, which is the last thing you look for in a chief executive.

I went on a media tour around the steel works at Cherepovets this week. It was great. I’ve never really been to a big industrial works, and the sheer noise and steam and red molten metal of the place gave me a surge of Victorian joy at the might of industrial man. There were blast furnaces 130 metres high, there were hot-rolling mills sending strips of red-hot metal through steaming pools of water, there were giant cranes hoisting coils of steel fifty foot into the air. Acres and acres of machinery. OK, not very environmentally friendly, but impressive nonetheless.

And I thought – all this is owned by one man. Not some terrifying Dale Carnegie figure who’d built it all with his bare hands. But by mild-mannered Alexei Mordashov, who looks like the head boy of some English prep school, and who just happened to be first in line when they were handing out Severstal shares back in the mid 1990s.

Then I thought – could all this be controlled by…Belgians? That’s what’s being discussed at the moment, as part of the mooted merger with Arcelor. If the merged company was controlled by Arcelor’s present management, this would be the biggest inroad by a foreign company into the Russian economy since BP bought 50% of TNK in 2003.

But who would really be in charge of Severstal-Arcelor?

Mittal, the Indian steel company owned by Lakshi Mittal, has been stoking fears that the company will be controlled by Mordashov, in other words, by a Russian oligarch, with all the negative connotations that carries with it. Thus Wilbur Ross, the New York billionaire who is a shareholder in Mittal, told the Wall Street Journal: "There are serious questions in the minds of Western institutions as to how good it is to have a Russian oligarch in charge of this company”.

But actually, it looks like Mordashov is giving a lot, and ending up with very little control. Mordashov plans to contribute 90% of his Russian assets, including the plant at Cherepovets, plus his Italian and US assets, plus about $1.25 billion in cash. In return, he’ll be the biggest single shareholder, president of the new company, head of the strategic committee, and able to nominate six people to the 18 person board.

But he’s also signed an agreement whereby he’ll vote in line with the rest of the board for three years, and won’t increase his stake above 33% for four years. His six board members have to be fully independent. And his strategic committee only makes non-binding recommendations to the board. So really, Mordashov is pretty firmly strapped into the passenger seat for the foreseeable future.

Nonetheless, he told me in Cherepovets that he might take a more executive role in the future. “But I am not yet sure it is right for me. I need to get comfortable with the new company, and the shareholders need to get comfortable with me. If the shareholders cannot accept me being in charge of the company, it would be very damaging for the company if I took charge, and I don’t want to damage the company”.

So what we seem to have is a four year period where foreign shareholders can “get used to” Mordashov, in the words of Severstal deputy CEO Thomas Veraszto. “We wanted to do this because of so-called Russophobia”, he said. “People in the West still have a lot of negative prejudices with regard to Russia, about Russian expansionism etc. We wanted to protect the deal against that”. After four years or so, if the shareholders have grown to know and love Alexei, he could get full ownership and become CEO.

On the one hand, this isn’t a bad idea. First of all, Mordashov’s assets would be protected, to some extent, in the merged company from any political volatility emerging from a changeover in power in 2008. Secondly, he would now be the main shareholder in the biggest steel company in the world, so could rapidly find himself much richer than he was before. Thirdly, he could take control of this new company further down the line, when he has more cash and shareholders know more about him.

At the same time, the strategy is fraught with uncertainty. How will shareholders get to know him, how can he show them how wise and prudent he is, when he doesn’t have any decision-making powers?

Secondly, the present management will not want to cede control. Compared to the lion Lakshi Mittal, who knows precisely what he wants, Mordashov is a complete lamb, who isn’t sure if he really wants control or not. Arcelor’s management must be rubbing their hands in glee – they get to take all Mordashov’s money, while still keeping all their privileges and powers. They’ll put him away in some cupboard marked ‘Strategic Committee’, nod enthusiastically at each of his proposals, and ignore them all. In other words, sooner or later you will have to fight the present Arcelor management if you want control of the company. They will not give it to you. Isn’t it more honest, and brave, to behave like Mittal, and go straight for the jugular?

Still, that implies that Mordashov wants to be in control. He may simply decide he wants to be very rich, and take a back seat from the decision-making. Maybe he wants to buy a yacht or a football team. Maybe he wants to go into politics. At the moment, he doesn’t seem sure what he wants.

Julian Evans, a British freelance journalist based in Moscow.

June 16, 2006