UPDATE 1-INTERVIEW-Sulzer says can go it alone

(Adds Renova comment, background, details)

By Katie Reid

ZURICH, April 22 (Reuters) - Swiss engineering firm Sulzer (SUN.S) launched a verbal counterattack on Sunday, two days after investors seized a controlling stake in a surprise move that fuelled speculation that it could be forced to merge with another conglomerate.

Sulzer chairman Ulf Berg called "deplorable" the way investment group Renova, controlled by Russian billionaire Victor Vekselberg, and Austrian investor Victory amassed the stake without public knowledge and argued for Sulzer's independence, saying it had the firepower needed to go it alone.

"If laws have been violated it is up to the Ministry of Economics and the Federal Banking Commission to check," Berg said.

Victory could not immediately be reached for comment.

"The Renova Group always complied and will be complying with all relevant laws and procedures concerning transfer and disclosure of securities transactions," a spokesman for Renova said.

Speculation hotted up over the weekend that Sulzer's new shareholders could seek a shotgun wedding between Sulzer and industrial group Oerlikon (OERL.VX), also controlled by Victory, to create a huge conglomerate.

"From a size perspective, we have the right market capitalisation to remain independent," Berg told Reuters in an interview on Sunday.

"We do not perceive our capability to win orders is being compromised by our size. By contrast, we are growing faster than many companies and competitors," he said.

Berg said combining Sulzer, which is itself seeking to take over British peer Bodycote (BOY.L), with Oerlikon made little sense.

"I do not believe that there are any significant synergies with Oerlikon and neither are there any other benefits. There are a lot of disparities in culture," Berg said.

Renova said on Friday it had bought an effective 32 percent stake in Sulzer in a joint venture with Victory, with 18 percent held in shares and another 14 percent taken via options -- a stake worth around 2.1 billion francs.

Renova and Victory would be legally bound to make a takeover offer for Sulzer if the stake reached 33.3 percent.

Renova said the stake in Sulzer, whose activities range from pumps for the oil and gas sector to surface coatings, would be held via Everest Beteiligungs GmbH, a joint venture between Renova and Victory.

Victory already has a controlling stake in Oerlikon and has recently built up a stake of about 25 percent in Swiss technology firm Ascom (ASCN.S), while Renova has 14 percent of Oerlikon.

"We have the word of Renova, who is the manager of Everest, that they do not want to merge us with anyone and that they want to stay with a minority position. I am inclined to believe that they mean what they say," said Berg, Sulzer's former chief executive officer.

STRANGE DEALINGS

Renova's announcement ended months of speculation about who was behind large Sulzer trades over the last five months, which have bolstered the group's shares, with the stock gaining some 25 percent so far this year.

"When it comes to the methodology that Victory and subsequently Renova have used to amass a stake of 32 percent in Sulzer, I would say this is deplorable for the Swiss financial society and investment community that it is possible to pass four disclosure levels without disclosing the stake," Berg said.

Under Swiss law, companies must report changes in their holdings if they rise or fall past the thresholds of 5 percent, 10 percent, 15 percent or 20 percent.

"There are many cases in Switzerland where this has happened. In the last week, there have been two cases ... and in the last three to four years, there have been around four cases without any sanctions so far," Berg said.

Investor groups have frequently used options to build up stakes in companies, a tactic critics charge as murky as it can keep transactions out of the public eye.

Swiss newspaper Sonntagszeitung reported that the Federal Banking Commission was investigating the transactions in Sulzer that were connected with Renova's stake.

Last week, Swiss construction group Implenia (IMPN.S) said it had asked authorities to look into the way British hedge fund Laxey Partners built up a stake of some 23 percent in the group, which was not traceable in stock market transactions.

In 2005, Victory used options to build up a position in Oerlikon, formerly known as Unaxis, before taking control of the group. Last year, Oerlikon used the same to tactic to buy Swiss machinery group Saurer SAUN.S.

((Reporting by Katie Reid; editing by Paul Bolding; e-mail: katie.reid@reuters.com; Reuters Messaging: katie.reid.reuters.com@reuters.net; telephone: +41 (0) 44 631 7320))

($1=1.206 Swiss Franc) Keywords: SULZER TAKEOVER/

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