Basmanny District Court of Moscow arrested Popov A.E., Board Chairman of TogliattiKhimBank, JSC for 2 months in connection with charges provided for by Article 210, Part 4 of the Criminal Code of the Russian Federation (formation of a criminal association).
URALCHEM, JSC is recognised as one of the victims in a new criminal case, No. 201/837064-14, initiated by the Investigative Committee (IC) of the Russian Federation under Articles 159, 165, 199 and 210 of the Criminal Code in respect of former managers of TogliattiAzot and related persons: Makhlay V.N., Makarov A.V., Korolev E.A., Korenchenko A.A., Popov A.E., Makhlay S.V., Kamasheva O.V., Vinogradov A.S., Balashova K. V., Mizgirev A.V., Miloserdova L.N., Tsivi E.G., Khaibullin R.R. and unidentified persons.
Other victims are the state and several other shareholders of TogliattiAzot, PJSC, legal entities and individuals.
IC’s decision to initiate a criminal case under Article 210 of the Criminal Code (formation of or participation in a criminal association) dated 16 May 2019 states that participants in the above criminal association in the form of a structured and organised group led by Makhlay V.N., in the period from 2005 until 2013, committed several serious economic crimes against the state, against the property of TogliattiAzot, OJSC and other legal entities.
To commit and conceal their crimes, participants in the criminal association involved a large number of their subordinates and Russian and foreign legal entities under their control as crime instruments.
It is established that, in 2008-2011, TogliattiAzot sold its products at knock-down prices to Nitrochem Distribution AG, a Swiss offshore company affiliated with the main owners of the Russian company, Sergey and Vladimir Makhlays, and their accomplice A. Tsivi. The latter, in turn, sold them to other buyers at market prices. The amount of misappropriated money totalled 84 billion roubles. In this connection, on 12 December 2012, a criminal case was initiated under Article 159, Part 4 of the Criminal Code of the Russian Federation, currently being considered by the Komsomolsk District Court of Tolyatti.
Assisted by several related companies, including the Swiss company Ameropa AG, participants in the criminal association stole a part of TogliattiAzot’s property assets, a methanol production plant with a capacity of 450 thousand tonnes per year and a plot of land allocated with it. Thus, the company suffered damage of more than 200 million roubles.
According to a similar scheme, based on an underestimated selling price, No. 7 ammonia plant was misappropriated. Damage to the company and shareholders exceeded 1.9 billion roubles.
In both cases, the production assets were misappropriated by Tomet, LLC, owned by a Hong Kong offshore company and affiliated with the former heads of TogliattiAzot, OJSC.
Such illegal alienation of the property of TogliattiAzot, OJSC was contrary to Russian laws (Articles 48 and 83 of the Federal Law On Joint-Stock Companies), the Charter of ToAZ and was not approved by the shareholders’ meeting.
In order to conceal their crimes and legalise the money stolen, the criminal association used illegal financial schemes facilitated by TogliattiKhimBank JSCB. The accomplices placed the withdrawn profit on deposits of offshore companies opened with this bank at high interest rates; they bought interest-bearing promissory notes from TogliattiKhimBank in order to create the illusion of the legal origin of the money. Both ToAZ and Nitrochem Distribution AG held settlement accounts in foreign currency and roubles with the bank, and all settlements between them were made through TogliattiKhimBank.
The criminal association caused damage not only to the company and other shareholders of TogliattiAzot, but also to the state. In their illegal transactions, the accused lowered the profit tax base for TogliattiAzot when selling ammonia and urea through the Swiss company Nitrochem Distribution AG. According to the decisions of arbitration courts that entered into force, from 2008 to 2012, the total amount of taxes unpaid by the company was 2.5 billion roubles.
Dmitry Tatyanin, URALCHEM’s Deputy CEO and Legal Director, commented as follows:
‘Thanks to the careful and hard work of our law enforcement agencies, numerous criminal cases initiated at different times and their documentation of the activities of TogliattiAzot, the whole picture has now been revealed, and we can see the real scale of the crimes committed by the organised and structured group led for a long while by former heads of the company. As a minority shareholder of TogliattiAzot since 2008, for many years we have pointed out numerous violations. These are violations of shareholders’ rights, selling products at knock-down prices, withdrawing expensive production assets at extremely low prices and non-payment of taxes. It may happen that the investigation of the new criminal case will uncover other violations of Russian laws, such as laundering of illegally earned money, corruption and other crimes.
As a minority shareholder of TogliattiAzot, URALCHEM will use all legal remedies to assert its rights to recover a multibillion rouble amount in material damage caused both to us and to the Tolyatti company. We hope that the new criminal case is investigated without prejudice, the situation at TogliattiAzot, PJSC can be decriminalised and those guilty of violations do not escape penalty.’