Catch me if you can. Arrest of ex-Governor Kon’kov
Pavel Kon’kov has been charged with misappropriation of 700 million rubles ($10.8 million) allocated to Ivanovsky Broiler poultry plant. The respective documents are endorsed by him – but, at that time, the Governor of the Ivanovo Region was Mikhail Men’. Kon’kov had just performed the duties of the regional head during his absence at the workplace. Later, Men’ had personally inspected the enterprise to check the spending of the allocated funds. Then the poultry farm became involved in weird ownership transfer schemes – and ultimately was recognized bankrupt. The law enforcement authorities had performed a number of searches since then – but the criminal case was instituted only now. Why was Kon’kov designated the scapegoat?
Pavel Kon’kov, ex-Governor of the Ivanovo Region, has been arrested for signing documents authorizing the allocation of budget funds from the Regional Fund for Small Business Support. 700 million rubles ($10.8 million) were lent to Ivanovsky Broiler company. However, according to the investigation, the money ended up on accounts of companies belonging to Prodo Group.
“Pavel Kon’kov, Dmitry Grishin (Managing Director of Ivanovsky Broiler Open Joint Stock Company), and other unidentified persons have embezzled budget funds entrusted to Kon’kov through the illegitimate transfer of the money to organizations belonging to Prodo Group,” – the investigators claim. The offense was committed back in 2011 – while the criminal case under Article 160 of the Criminal Code of the Russian Federation (misappropriation or embezzlement) was instituted only in May 2019. The residence of ex-Governor Kon’kov, offices of Ivanovsky Broiler, and even some premises in Voronezh were searched. The court remanded Grishin in custody in Voronezh. Moscow-based Prodo Group was the owner of the enterprise at the time of the crime commission.
According to the investigators, Pavel Kon’kov lives in style: an operative video shows a large two-storey home with a fireplace, small pond on the lot, a few SUV vehicles... Several bundles of money were found in the residence of Kon’kov – but the exact amount was not disclosed.
In 2011, Pavel Kon’kov was not the Governor yet – but just the First Deputy Chairman of the Regional Government responsible for the economic block. The order of March 15, 2011 authorizing the allocation of funds had to be signed by Mikhail Men’, then-Governor of the Ivanovo Region. However, Men’ was on vacation in that period and authorized his deputy Pavel Kon’kov to endorse the paper. In fact, Men’ was frequently out of the office – on vacation or in business trips – when it was necessary to sign documents potentially entailing personal liability.
Pavel Kon’kov was appointed the Interim Acting Governor of the Ivanovo Region on October 16, 2013. He succeeded to Mikhail Men’ – who has taken charge of the Ministry of Construction and Housing and Public Utility Sphere of the Russian Federation (Minstroy). On September 14, 2014, Kon’kov won the gubernatorial elections. On October 10, 2017, he has voluntarily resigned. On September 9, 2018, he was elected a Deputy of the Ivanovo Regional Duma from Edinaya Rossiya (United Russia) Party. Currently, Pavel Kon’kov is an Advisor to the General Director of Far East Energy Management Company.
According to witnesses, 750 million rubles ($11.6 million) had been transferred from the federal center to the Ivanovo Regional Fund for Small Business Support unusually quickly – just in a few months. Then 700 million rubles ($10.8 million) were lent to Ivanovsky Broiler until 2021 at a very low interest rate. After that, the officials suddenly realized that the agricultural enterprise does not fall under the small business category – and in April, Kon’kov signed another order excluding the term “small business” from the order issued in March.
Order of the Government of the Ivanovo Region of April 2011
After the receipt of the money, Pavel Kudryashov, then-Director of Ivanovsky Broiler, who is not a suspect in the criminal case against Kon’kov, has established Provintsiya (Province) Investment and Consulting Company. In fall 2011, Ivanovsky Broiler has granted an interest-free loan in the amount of 283 million rubles ($4.4 million) to this legal entity until 2031. Shortly after that, Provintsiya Investment and Consulting Company has used this money to purchase 100% of shares of Ivanovsky Broiler Open Joint Stock Company from Prodo Group.
Prodo Group is one of the largest Russian producers of poultry and sausage products, semi-finished products, meat delicacies, and dairy products. It was founded in 2004 using funds provided by Millhouse company administering assets of Roman Abramovich and other former Sibneft shareholders. Prodo Group amalgamates 13 enterprises. Its parent company – Prodo Limited Liability Company – is co-owned by Andrei Gorodilov (50%), Efim Malkin (25%), and Irina Panchenko (25%). As of 2018, the company revenues amounted to 37 billion rubles ($571.3 million).
Pavel Kudryashov and Lyudmila Mikhailova, mother-in-law of Andrei Stepanov, former Deputy Head of the Ivanovo Municipal Administration and future Head of the Property Department of the Ivanovo Region, became – via Provintsiya Investment and Consulting Company – the new owners of Ivanovsky Broiler.
In 2011, Alik Sharabidze was in charge of the Ivanovo Regional Fund for Small Business Support. In 2018, he was found guilty in 18 swindling episodes (unrelated to the ‘Ivanovsky Broiler case') and sentenced to 8.5 years in a penal colony. Reportedly, he has testified against Kon'kov. But what was the need for Sharabidze to collaborate with the investigation after his sentencing and subsequent mitigation of the sentence as a result of an appeal?
Of course, it is possible to assume that Mikhail Men', then-Governor of the Ivanovo Region, was not aware of the embezzlement scheme – even though orders allocating such amounts of money are prepared not in one day and not by one person. However, in 2013, a local TV channel has broadcasted a report about the visit of Mikhail Men' to Ivanovsky Broiler – the Governor was willing to check the spending of the funds personally.
“In the last years, we had focused our possibilities, unfortunately, limited ones, on the support of this industry. You are aware that we have granted a very large budget loan – via the Regional Fund for Small Business Support – to the largest poultry producer in the region. In that historical period of agricultural development in the region, this decision was right,” – Mikhail Men’ said two years after the allocation of the funds.
In other words, the Governor could not be unaware of the forthcoming provision of the funds. However, his name is not mentioned in the criminal case either. Can Men’ be among the above-named “unidentified persons”? If the members of the Government of the Ivanovo Region had no idea that the money would be embezzled through a shady scheme, why is the blame put on Pavel Kon’kov now? After all, all the procedures were complied with and even agreed with Moscow...
In April 2015, Ivanovsky Broiler Open Joint Stock Company was recognized bankrupt and an insolvency administration imposed at the enterprise. The total indebtedness of the poultry plant amounts to 1.6 billion rubles ($24.7 million). According to businessmen close to Stanislav Voskresensky, the current Governor of the Ivanovo Region, the insolvency administrators are procrastinating the bankruptcy procedure by all means. As a result, the enterprise is still operating and even brings profits to somebody.
But the main question is: why was the criminal case instituted only eight years after the crime? During that period, Moscow investigators had repeatedly visited the Ivanovo region and every time seized boxes with documents pertaining to the allocation of the 700 million rubles ($10.8 million) to the poultry plant. However, no criminal cases were instituted. Now the investigation has brought a motion to remand Kon’kov in custody claiming that he may destroy important documentary evidence.
Apparently, Kon’kov was unable to do so in the eight years that have passed since the commission of the crime... According to one of the versions currently discussed in the regional government, the operatives want Kon’kov to testify against some high-ranked figure. Could it be Mikhail Men’?