The Central Court of the Russian city of Kemerovo is hearing a criminal case over extortion of the controlling interest in Inskoy mine. Regional authorities attempted to prevent social unrest but were charged with hostile takeover (“corporate raiding”) of the enterprise. 

Among the defendants there are top officials of the regional administration – two ex-governor deputies, a retired Investigative Committee General, as well as investigators and a billionaire from the Forbes List. RAPSI analyzes the details.

No law Prohibits Authorities To Meet Owners of Mines 

A year after the proceedings began the court has continued to hear oral evidence of witnesses, among which are officers of the Kemerovo Investigative Committee and a member of the Federation Council, the upper house of Russia’s parliament. 

Yury Shremf, the head of the Second Department on Major Investigations of the Investigative Committee’s regional directorate, in 2016 was the immediate superior of defendants Sergey Kryukov and Artemiy Shevelev. At the time the situation at Inskoy mine developed, Shremf was away on leave; however, he learnt about this high-profile case almost immediately from his officers and mass media, which published numerous materials about the case.    

“I was more or less aware of the fact that the situation gained publicity in mass media, and that there were wage arrears,” – Shremf said. “We were demonstrated video records, on which workers voiced their grievances. Senior officers of the Department visited the site and addressed the matter, there were not only senior Investigations Division officers, but also regional administrators.”   

In fact, everybody monitored the situation. Yevgeny Khlebunov, ex-head of the Coal Industry Department of the Kemerovo Regional Administration, explained that in 2016 Inskoy mine was the most problem-ridden object as concerned the stability of operation, production, wage arrears, taxes, payments, and everything in between.   

Khlebunov’s colleague Maxim Makin, at that time First Deputy Governor of the Kemerovo Region, recounted numerous complaints about the situation at the mine addressed to all levels of authorities, up to the Presidential Administration. According to him, these problems were settled in different ways: there were created staff groups and commissions; owners of enterprises were called on the carpet; non-commercial foundations were called in to pay wages arrears, among them, Miloserdie charity foundation. 

However, as concerned Inskoy, such actions brought no positive changes. The management of the mine had agreed a bailout plan with the administration and workers; nevertheless, when analyzed in detail this plan turned out to be a fictitious solution, since managers could find only a part of needed funds, which could be provided only under informal arrangements and guarantees of supplies of production of the mine, which in fact was in disrepair. Meanwhile, miners refused to go to the mine until the problem of wage arrears was settled and decided to go on strike. These developments left for the authorities no other way as to take drastic measures. 

According to Shremf’s opinion, these measures were taken timely and according to a tried out scheme. Anton Tsygankov, the owner of the controlling interest in the mine, was arrested, the Investigative Committee seized documents related to the Inskoy operation. Even Chairman of the Investigative Committee Alexander Bastrykin demanded that investigators intervene in such situations. 

Pavel Mullin, a former deputy head of the Kemerovo Region Investigations Department of Russia’s Investigative Committee, when giving testimony, stressed that cases over wage arrears had always been the matter of priority and investigated under special procedures. According to Mullin, at all meetings Alexander Bastrykin insisted that it was necessary to work with owners of enterprises, not their nominal managers.   

“Work with owners to settle the problem of wage arrears, apply restrictive measures if need be,” Mullin cited Bastrykin.

Taking into account the strike, Tsygankov, as the owner of the enterprise, was offered to do everything possible to settle the situation. The real state of affairs at the mine was described in detail by Oksana Rybalkina, an investigator of the Second Department on Major Investigations of the regional Investigative Committee’s directorate: “The final financial statement for 2015, or the first quarter of 2016, demonstrated wage arrears about 70 billion rubles (approximately $1 million at the present exchange rate), whereas accounts payable made over 2 billion rubles ($31.4 million), of which sum 700 million rubles ($11 million) represented advance payments received for coal not yet produced.”  

Besides, the enterprise had debts to off-budget funds and tax authorities. “Even in case the mine could launch coal production, this production would have been supplied free of charge for at least 18 months. The enterprise was in a critical condition,” Rybalkina said at a court hearing.  

It was exactly in the office room of defendant Artemiy Shevelev, an officer under Rybalkina, where on July 12, 2016, took place a meeting, at which the documents related to the transfer of shares by way of gift were executed. Shremf purported that this meeting with representatives of the Administration (where defendants Ivanov and Danilchenko, ex-deputy governors, were present among others), which had place in the investigator’s office, was convened exactly because it was needed to timely settle this conflict situation of high public interest.   

Shremf, as well as Rybalkina, stressed that the law did not prohibit such meetings. The investigator did not know all particulars of the meeting, since he had not been present at it and learnt about the making of the notary documents in the office of his officer much later. 

In an earlier RAPSI report of this high-profile case it was noted that exactly in this office Tsygankov had been offered to find the funds to pay miners or sell his shares to settle the debts. Since Tsygankov had no money, he agreed to meet Alexander Shchukin, an entrepreneur in the field of coalmining, and a potential owner of Inskoy mine, and to execute the documents as concerned the transfer of the shares by way of gift.

Appreciation of Regional Authorities

A witness in the case, senator Alexey Sinitsyn, who was a member of the Kemerovo Region’s Council of Deputies in 2016, also noted the part the Investigative Committee’s officers played in the events.   

“The wage arrears problem in the Kemerovo Region at large demanded a reaction by the authorities, which manifested their socially oriented position,” Sinitsyn stressed. “The strike-related situation urged their immediate intervention.”    

The member of the Federation Council knew about the strike and multibillion debts of Inskoy. The authorities’ reaction quickly followed and a large commission of experts from the regional administration and law enforcement officers went to the mine. 

“Usually, when in such a situation an owner could not present an objective plan, of course, a dialogue with him or her was initiated. Informed by officials of the regional administration, who visited the mine, I knew that a strike took place there and the Inskoy management did not have a crisis bailout plan,” Sinitsyn said.  

The senator stressed that defendant Alexey Ivanov, a former deputy governor, was commissioned by then regional governor Aman Tuleyev to deal with the problems at the mine. Sinitsyn also noted the special credit and special role of the Investigative Committee in the settlement of the conflict at Inskoy. After the change of the mine owner and the start of wage arrears payments from Miloserdie charity fund, the Council of Deputies by a majority vote adopted an appeal to General Kalinkin, the head of the Kemerovo Regional Investigative Committee’s Office. 

“This July, the situation at Inskoy Mine plunged into a crisis… The owners of the mine deceived workers promising to pay wages, although having no sources of such payments and by this only increased their debts to the workers. Due to the timely procedural response actions taken by the Kemerovo Regional Investigations Directorate of Russia’s Investigative Committee, it became possible to stabilize the situation. Owners of the enterprise took steps to pay wages to the miners. It is indisputable that such efficient actions of the regional Investigations Division serve to strengthen the reputation of the authorities, inspire faith in the power of law, and facilitate stabilization of social and economic climate in the region,” Resolution No 1359 of August 30, 2016, of the Council of People’s Deputies of the Kemerovo Region reads.   

However, the situation developed in a way that the efficient actions of the Investigative Committee’s officers and General Kalinkin himself brought them no decorations and public recognition, but led them to the defendants’ bench, as they were charged with extortion. It should be noted that Segey Kalinkin is the only defendant, who is waiting for a sentence not under house arrest, but in detention.

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RAPSI is keeping under review this high-profile case and analyze reports from the Kemerovo Central Court. All those involved in the hearings apprise the course of investigation and trial as the most civil and professional one.