Moscow City Court upholds extension of Togliattikhimbank chief’s detention
The court has ruled to uphold extended detention of previously arrested head of Togliattikhimbank Alexander Popov, while sentencing other Togliattiazot executives to prison terms in absentia
MOSCOW, August 20 (RAPSI) – The Moscow City Court has upheld a lower court’s ruling to extend the period of detention of remanded Alexander Popov, Togliattikhimbank board chair, until November 1, 2019.
The ruling by Moscow’s Basmanny District Court, which had extended the custody of Popov, was recognized as legitimate and substantiated, with appeals of the defense dismissed, according to Mikhail Tumanov, senior investigator for special cases under the Russian Investigative Committee.
Along with other defendants in the case, head of Togliattikhimbank Alexander Popov is charged with organizing and participating in a criminal syndicate (Article 210.3 of the Russian Criminal Code). Popov is also a defendant in a large-scale fraud case (Article 159.4 of the Criminal Code) and large-scale tax evasion (Article 199.2 of the Criminal Code).
In early July, the Komsomolsky District Court of Togliatti, Russia, ruled in a high-profile criminal case of embezzlement of 85 billion rubles ($1.3 billion at the current exchange rate) from TOAZ and its shareholders, convicting in absentia Vladimir Makhlai, his son Sergey, ex-general director of TOAZ Evgeny Korolev and their Swiss accomplices Andreas Zivy and Beat Ruprecht.
According to the verdict, the fraudsters sold at a lower price all the products manufactured at TOAZ from 2008 to 2011 to Swiss offshore company Nitrochem Distribution AG, headed by Ruprecht, which is part of Zivy’s Ameropa AG holding. The Swiss further sold the same products at a market price. The marginal profit was shared by the criminals, with no taxes whatsoever paid to the Russian treasury.
The investigation believes that Popov played a key role in that fraudulent scheme, which caused Togliattiazot major damage. In the Togliattikhimbank, he ran a network of offshore companies affiliated with the defendants, controlled their accounts, which received funds obtained from illegal transactions, and covered for fraudulent schemes.
In addition, Popov allegedly took part in a scheme that enabled members of the criminal syndicate to underpay taxes to the budget. In 2008, two LLCs controlled by the defendants evaded payment of taxes worth at least 320 million rubles (about $5 million). At the same time, TOAZ was stripped of a methanol production complex with a capacity of 450,000 tons per year, as well as the land plot where it was located. As part of this transaction, the value of the asset was significantly underestimated: against a market price of 13.5 billion rubles ($202 million), the enterprise received only 132 million rubles for it.
According to investigators, following a similar scheme that implied an understatement of the product price, Togliattiazot also lost ammonia unit N7 worth 2.4 billion rubles ($36 million). Under the acquisition contract, it was sold for only 92.4 million rubles. Losses of the enterprise and shareholders exceeded 1.9 billion rubles. All assets were transferred to the accounts of Tomet LLC, whose shareholders were foreign offshore companies controlled by the criminals.
The money transfers following the sale of assets belonging to TOAZ were handled by the bank controlled by Popov. As a result, Popov and his fellow criminals took complete charge of both their own real estate and equipment of Togliattiazot OJSC, investigators claim.
According to investigators, illicit schemes for withdrawal of funds from TOAZ made it possible to withhold paying taxes, so tax authorities are now forced to solicit them in court. At the moment, the total amount of taxes to be paid by TOAZ for 2008-2012 alone equals 3.5 billion rubles. Besides, there is already a ruling by the Commercial Court of the Samara Region dated May 21, 2019, obliging Togliattiazot to pay 530 million rubles of unpaid taxes for 2013.
A criminal case under Article 210 of the Criminal Code (organizing and participating in a criminal syndicate) was opened by the Investigative Committee on May 16, 2019. The investigation documents say that the perpetrators, "acting as a structured, organized criminal syndicate, committed several grave economic crimes against the state, the property of Togliattiazot and other persons in 2005-2013."
Popov was arrested at Vnukovo Airport on May 31, as he attempted to fly to Georgia. The Investigative Committee, while requesting Popov’s detention in the Basmanny District Court, noted that the defendant “had acquired a Dominican Republic passport and possessed significant financial assets, enjoying the financial support of wanted members of the criminal community. He also intended to escape the law”.
In addition, the investigators observed that Popov involved many companies and individuals in his illegal schemes, primarily his subordinates who were dependent on him for reasons of corporate hierarchy. The investigation also expressed concern that if the banker was to be released from custody, he would be able to exert pressure on the witnesses. Given these circumstances, the Moscow City Court's decision to uphold extension Popov’s detention seems consistent and reasonable.
The ruling in question of the Moscow City Court on the legality of Popov’s extended detention should also be seen as a signal to both the defendants and their lawyers, as well as everyone following the trial, that the court will strictly adhere to the letter of the law in the investigation into this case, and all the accused whose involvement will be proven during the trial will receive just and well-deserved punishment.