TOAZ case defendants suspected of attempted bribery of Russian Supreme Court
A criminal case over attempted bribery on an especially large scale (part 3 of Article 30 and part 5 of Article 291 of the Criminal Code of the Russian Federation) has been instituted against the beneficiary of Togliattiazot PJSC (TOAZ) Sergey Makhlai, the former chairman of the board of Togliattikhimbank Alexander Popov and the former head of the TOAZ security service Oleg Antoshin. According to the investigation, the suspects intended to bribe judges of the Supreme Court of the Russian Federation for canceling the decision to recover tax arrears from TOAZ.
An order to initiate a criminal case was signed by the senior investigator for particularly important cases, Major General of Justice Mikhail Tumanov on January 24. It was publicly reported on January 28 in court, when an investigator of the Investigative Committee requested the extension of detention of Popov.
The former head of Togliattikhimbank, along with other defendants in the criminal case, is charged with organization and participation in a criminal community (part 3 of article 210 of the Criminal Code of the Russian Federation). Popov is also accused of especially large-scale fraud (Part 4 of Article 159 of the Criminal Code of the Russian Federation) and non-payment of taxes in an especially large amount (Part 2 of Article 199 of the Criminal Code of the Russian Federation).
A new criminal episode is connected with the charges already brought against Popov. According to the investigation, illegal schemes for the withdrawal of funds from TOAZ with the participation of Togliattikhimbank allowed not to pay taxes in huge amounts, and now the tax authorities are to collect them in court. According to the current information, only in 2008-2013 the total amount of taxes confirmed by all authorities to TOAZ was more than 3.5 billion rubles (about $5.5 million).
Back in 2012, employees of the interregional inspection No.3 for the largest taxpayers of the Federal Tax Service considered that ToAZ underestimated export revenues from the sale of ammonia by more than 1 billion rubles in 2010. As a consequence, the TOAZ income tax was then increased by more than 161 million rubles. Representatives of the enterprise (according to the investigation it was Sergey Makhlai) intended to annul this decision by filing a cassation appeal with the Supreme Court of Russia.
The investigation reports that in the fall of 2015, Antoshin found intermediaries to help transfer the bribe to the Supreme Court. Their candidacies were allegedly approved by Popov, who, according to the Investigative Committee, oversaw the operation. It is the ex-head of Togliattikhimbank who is suspected of collecting and transferring $ 1.2 million to the cell of a credit institution, that should have become a fee to intermediaries in transferring a bribe.
However, on November 2, the judge of the Supreme Court Zavyalova T.V., having studied the TOAZ cassation appeal against the decision of the Moscow Commercial Court, the ruling of the Ninth Commercial Court of Appeals and the decision of the Moscow District Commercial Court, refused to submit the cassation appeal to the Judicial Chamber on Economic Disputes of the Supreme Court of Russian Federation.
“The company was accrued income tax, value added tax, as well as interest and penalties. The basis for additional income tax was the conclusion that the company understated taxable profits when exporting ammonia and urea at a price by more than 20 percent lower than market prices to an affiliate of the Swiss company Nitrochem Distribution AG. Recognizing legitimate additional accrual of income tax to the company and failure to deduct value-added tax on operations for the purchase of natural gas intended for the production of urea, the courts proceeded from determined facts that showed that the disputed amount of natural gas had never been used for production of urea, despite the information provided," the court’s decision reads.
A representative of the injured party in several criminal cases related to the actions of the majority shareholders of Togliattiazot PJSC commented on the new circumstances of the criminal case for RAPSI.
Director for Legal Issues, JSC UCC Uralchem Dmitry Tatyanin:
“The initiation of a new criminal case about an attempt to bribe a judge of the Supreme Court in order to cancel the assessed taxes is a testament to the legal excesses of the owners of Togliattiazot PJSC and related persons.
A new criminal case initiated under a corruption article added to the extensive list of other episodes of criminal activity already identified during the investigation into previously initiated criminal cases. Uralchem, as the minority shareholder of Togliattiazot PJSC, is well aware of the situation at the enterprise. For many years, tens of billions of rubles have been illegally withdrawn from the plant by lowering export prices for products, as well as through other channels. Illegally, a significant part of production assets was withdrawn from the enterprise.
Such criminal activity caused significant damage to both TOAZ itself and its minority shareholders, as well as to the state. The Federal Tax Service additionally accrued Togliattiazot for 2009-2013 more than 3 billion rubles of unpaid taxes. The criminal case under Part 4 of Art. 291 of the Criminal Code indicates an unsuccessful attempt to evade taxes for 2010 by giving a bribe to a judge.
Earlier, the Investigative Committee of the Russian Federation initiated criminal cases over organization or participation in a criminal community using official position (part 3 of article 210 of the Criminal Code of the Russian Federation); fraud on an especially large scale committed by a group of persons by prior conspiracy (part 4 of Art.159 of the Criminal Code) and non-payment of taxes in a particularly large amount (part 2 of Art. 199 of the Criminal Code). The defendants in these cases were Vladimir and Sergey Makhlai, their foreign partners Andrew Zivy and Beat Ruprecht, as well as other leaders of Togliattiazot and Togliattikhimbank.
Uralchem UHC JSC, as the injured party in several criminal cases related to the actions of the majority shareholders of Togliattiazot PJSC, is interested in conducting a thorough and complete investigation into all criminal cases. We hope that due to the activities of investigative and judicial authorities, the damage to TOAZ as well as Uralchem as a minority shareholder, and the state will be compensated.”
Thus, the initiation of a new criminal case has become yet another objective reason for extending detention of the former head of Togliattikhimbank Alexander Popov. The relevant investigators’ motion was considered and granted by the Basmanny District Court of Moscow.
It should be reminded that in early July the Komsomolsky District Court of Togliatti found Vladimir Makhlai, his son Sergei, ex-general director of TOAZ Yevgeny Korolev and their Swiss associates Andreas Zivy and Beat Ruprecht guilty in absentia of embezzling more than 85 billion rubles ($1.4 billion) from TOAZ and its shareholders.
According to the conviction, the fraudsters sold all the products exported by TOAZ in 2008-2011 at a reduced price to the Swiss offshore company Nitrochem Distribution AG, led by Ruprecht, which is part of the Zivy Ameropa AG holding. The Swiss then sold the same product at a market price. The participants in the criminal scheme distributed the difference among themselves, without paying the Russian Federation any taxes on hidden profits.
The investigation believes that Popov played a key role in this fraudulent scheme that caused Togliattiazot such enormous damage. In Togliattikhimbank he managed a network of offshore companies affiliated with the accused, controlled their accounts, which received funds from the illegal sale of products, and also ensured corruption cover for fraudulent schemes.
In addition, Popov took part in a scheme that allowed participants in the criminal community to underpay taxes to the budget: in 2008, two LLCs controlled by the accused evaded paying taxes to the budget totaling at least 320 million rubles. Then, a complex for the methanol production with a productivity of 450,000 tons per year and a piece of land where it was located were stolen from TOAZ. As part of this transaction, the value of the asset was significantly underestimated: at a market price of 13.5 billion rubles, the company received only 132 million rubles for it.
According to a similar scheme with an understatement of the sale value, Togliattiazot also lost its ammonia unit No.7 worth 2.4 billion rubles. According to the sale contract, it was sold for only 92.4 million rubles. Damage to the enterprise and shareholders amounted to more than 1.9 billion rubles. All assets were transferred to the accounts of Tomet LLC, whose shareholders were foreign offshore companies controlled by the accused.
The money transfer transactions under the contracts of sale of assets belonging to TOAZ were handled by a bank controlled by Popov. As a result, Popov and other members of the group got the opportunity to own and dispose of real estate objects and equipment owned by Togliattiazot OJSC, which had been stolen from the enterprise.
In addition, the investigation noted that Popov involved many companies and individuals in the implementation of criminal schemes, mainly his subordinates, dependent on him. The court agreed with the arguments of the investigation that, while at liberty, the accused could hide, destroy evidence, continue to engage in criminal activities, put pressure on witnesses and otherwise impede the investigation.