Uralchem recognized as victim in organized criminal syndicate creation case
MOSCOW, June 3 (RAPSI) - The Basmanny District Court of Moscow has detained JSC Togliattikhimbank’s Chairman of the Management Board Alexander Popov for two months on charges of creation of an organized crime syndicate, according to court records.
JSC Uralchem is recognized as one of the victims in a new criminal case opened by the Investigative Committee of the Russian Federation under Articles 159, 165, 199 and 210 of the country’s Criminal Code against former Togliattiazot executives and their associates. Other victims are the Russian state and several other PJSC Togliattiazot shareholders – both individuals and legal entities.
Members of an organized criminal syndicate led by the former Togliattiazot Corporation president Vladimir Makhlai’s committed several serious economic crimes against the state and the property of Togliattiazot and other entities, according to the Investigative Committee’s May 16 order on the institution of criminal proceedings under Article 210 of the Criminal Code of the Russian Federation (establishment of a crime syndicate or participation in it).
The gang members involved many of their subordinates and affiliated companies, both Russian and foreign, as instruments of a crime, Uralchem’s statement says.
The press-release notes that in 2008-2011, Togliattiazot sold its product at understated prices to the Swiss offshore entity Nitrochem Distribution AG affiliated with the enterprise’s majority shareholders – Sergey and Vladimir Makhlai and their accomplice A. Zivy. The latter, in turn, sold it to other buyers at market prices. That embezzlement amounted to 84 billion rubles ($1.3 billion), according to Uralchem. A criminal case over this fact was opened under part 4 of Article 159 of the Criminal Code of the Russian Federation on December 12, 2012, and is currently heard by the Komsomolsky District Court of Togliatti.
Using affiliated companies, including the Swiss Ameropa AG, the criminal group members misappropriated a part of a single Togliattiazot asset complex – methanol production plant with a capacity of 450,000 tons a year along with the land plot on which it is located. The enterprise sustained a loss of over 200 million rubles (about $3 million), the statement said.
The similar scheme with cut selling price was used to misappropriate ammonia unit N7. The damages sustained by the enterprise and its shareholders amounted to over 1.9 billion rubles (over $29 million rubles). In both cases, the assets were made over to Tomet LLC owned by a Hong Kong offshore and affiliated with the former Togliattiazot executives.
All these instances of illegal Togliattiazot asset stripping were committed in violation of the Russian law (Articles 48 and 83 of the Federal law “On joint stock companies”), JSC Togliattiazot’s charter and without the approval from shareholders’ meeting, Uralchem noted.
To conceal the crimes and launder money obtained through illegal means, the organized criminal group utilized illicit financial schemes carried out through JSB Togliattikhimbank. The members of the syndicate deposited black money with the accounts of offshore entities in this financial institution at high interest rates, acquired bank bills with accrual of interest to lend a veneer of legality to the funds’ source. Both Togliattiazot and Nitrochem Distribution AG had operating accounts in the bank nominated in rubles and carried out all transactions with each other through Togliattikhimbank.
The actions of the organized crime group caused damage not only to the enterprise and its shareholders, but to the state as well, the company believes. While making illegal transactions, the defendants understated the profit tax base from sale of ammonia and urea through Nitrochem Distribution AG. Thus, according to the commercial courts’ rulings that have come into legal force, the enterprise was found liable for 2.5 billion rubles (over $38 million) in back taxes for 2008-2012.
“Thanks to the diligent and meticulous work done by the law enforcement agencies, all criminal cases opened at different times and their episodes associated with the activities of Togliattizot now fall into place. The whole picture provides insight into the scope of crimes committed by an organized and structured group, led by the former enterprise executives, over a large timespan,” Deputy CEO and Legal Affairs Director of JSC Uralchem Dmitry Tatyanin said.
He noted that “being a minority shareholder of Togliattiazot since 2008, we have been pointing out numerous irregularities at the plant for many years.” “That being shareholders’ rights violations, selling product at knock-down prices, valuable asset stripping at prices understated by a factor of multiple times, tax avoidance. We don’t rule out a possibility that in the course of investigation into this case more violations of the Russian law will be discovered, such as money laundering, acts of corruption and other criminal activities,” he added.
As a minority shareholder, “Uralchem company is determined to stand upon its rights for the repair of multibillion damages sustained by us as well as the Togliatti enterprise itself, through any legal means.”
The agency currently does not possess any comment on the case from Togliattiazot and the defense.