The offering is part of the merger of SUAL and Russian's largest aluminum producer RUSAL and the alumina and aluminum production assets of Switzerland's Glencore.
The regulator said that the value of SUAL shares was not properly appraised. It also cited irregularities in the vote of SUAL shareholders on the three-way merger.
United Company RUSAL said in a statement Friday, commenting on the regulator's report, that SUAL and RUSAL had purchased shares from their minority shareholders in strict compliance with the law.
The appraisal preceded a buyout of SUAL shares from minority shareholders.
Oleg Vyugin, director of the Federal Service for Financial Markets, has repeatedly said that the appraisal of RUSAL and SUAL shares was not made in compliance with the law.
RUSAL and SUAL's minority shareholders claimed in their filings with the financial markets regulator that the value of their shares was not fairly appraised, Vyugin said.
He noted, however, that Russian legislation did not regulate which organizations should make appraisals in such cases.
SUAL set the price for the share buyout at 29.93 rubles per common share. The price is based on an appraisal made by Deloitte & Touche CIS and confirmed by Russia's NP Self-regulated Interregional Association of Assessors, or NP SMAO, SUAL said earlier. SUAL was expected to complete the share buyout by the end of 2006.
RUSAL and SUAL and Switzerland's Glencore closed a deal to merge their aluminum and alumina assets in March. The enlarged company is called United Company RUSAL.