I forgive my debts to those whom I owe: successful business strategy of Chelyabinsk Governor Dubrovsky

I forgive my debts to those whom I owe: successful business strategy of Chelyabinsk Governor Dubrovsky
Boris Dubrovsky, the Governor of the Chelyabinsk Region Photo: Governor’s press-office

Boris Dubrovsky, a governmental official and businessman, continues to surprise everybody. The Governor of the Chelyabinsk Region is so severe that he never repays debts – neither to contractors, nor to his own staff.

The Head of the Chelyabinsk Region is probably the most scandalous governor in Russia. Contrary to the Russian legislation, he is not only a civil servant, but also the owner of a huge construction corporation and account holder in Panama offshore companies. Recently his record of misdeeds has been updated. The unscrupulous governor turned out to be an unscrupulous employer and business partner as well.

Wish you living on your salary only!

This year Boris Dubrovsky became the third richest governor in Russia; only Aleksander Bogomaz, Governor of the Bryansk Region, and Rustam Minnikhanov, President of the Republic of Tatarstan, have higher incomes. Actually, Dubrovsky had never lived in poverty; this is probably the reason why the Chelyabinsk Governor does not care much of prompt payment of salaries. For instance, in April 2016, during the annual Direct Line with the Russian President, a worker from Uralavtopritsep factory in Chelyabinsk informed the President of non-payment of salaries for several months. The repayment of salaries to the workers started even before the end of the TV program, but the most interesting was the reaction of Dubrovsky. Prior to the Direct Line, the Governor had never been concerned of factories affected by the crisis, but after the program, he suddenly summoned the director of Uralavtopritsep to his office for scolding. 

The belated actions of the Governor were covered in all local media. But another fact – multi-month salary delays at one of Dubrovsky’s own factories – was not publicized so widely. PanoramaUrFO.ru reports, citing Evgenia Volkova, assistant prosecutor of the Troitsk district, that 83 employees of Energia (Energy) Bobrovsky Plant of Reinforced Concrete Structures (BPRCS) have addressed the Prosecutor’s Office of the Troitsk District of the Chelyabinsk Region back in March 2016. The total amount of salary arrears was 880 thousand rubles. The employees haven’t received wages since December 2015. But no one rushed to report this to the Russian President, and the web-site of the Prosecutor’s Office of the Chelyabinsk Region does not even mention the unpaid wages at Energia Plant.

Исполнительные производства в отношении БЗЖК «Энергия»

Enforcement proceeding against Energia BPRCS as of the end of April 2016    

The CrimeRussia has already reported – during the peak of the scandal with unpaid wages – that Boris Dubrovsky, being a governor, remains the owner of Energia BPRCS and other enterprises of Sinai-group corporation. Nothing has changed since then. Why the governor’s plant is in such a distress? Actually, no one is in distress there, except for ordinary workers. Only in 2015 Energia BPRCS has completed and signed 12 contracts with the total cost over 16 million rubles. In addition, in 2015 the Energia BPRCS web-site announced a very profitable contract with UralVagonZavod for the amount exceeding 36.5 million rubles. Therefore, the plant–debtor had more than enough money. It was the simple greed that prevented the factory management and its owner from paying salaries to the workers.

Active businessman

Because complaints of Energia workers have not reached the Kremlin, this story had a completely different ending. After the prosecutor’s audit, repayments of salary for the last months have begun, but the Governor’s plant immediately retaliated upon the ‘rebels’. According to Znak.com, many people who had signed the complaint to the prosecutor’s office, were forced to quit because their salaries have been reduced to 6 thousand rubles. Aleksander Egorov, the Executive Director of Energia, not a bit embarrassed, confirmed in his interview to Delovoi Kvartal (Business District) that many employees have left the factory and emphasized that the remaining personnel are 100% loyal to the owner. Also Egorov explained the nearly six-month delay of salary payments very simply: “Some data arrived a little bit late”. However, such attitude towards the personnel would not seem so outrageous, if we remember how Boris Dubrovsky appropriated Energia BPRCS. 

Factory facilities used to belong to Bobrovsky Plant of Reinforced Concrete Structures Open Joint Stock Company, and the future Governor of the Chelyabinsk Region had no control over it. However, the fortune ‘suddenly’ smiled upon Dubrovsky: the Chelyabinsk Regional Administration of the Federal Tax Service of the Russian Federation filed a claim to declare Bobrovsky Factory of Reinforced Concrete Structures bankrupt. According to Kompromat 74, Boris Dubrovsky was directly involved into the bankruptcy of the factory, with well-paid assistance of Valery Dobishev, who was the director of the plant at that time. The list of creditors of the bankrupted factory included Energia Bobrovsky Factory of Reinforced Concrete Structures Closed Joint Stock Company, which was later reorganized into the above-mentioned Energia Bobrovsky Factory of Reinforced Concrete Structures Limited Liability Company. Some factory assets have been sold after its bankruptcy and purchased by structures controlled by Dubrovsky. For instance, Chelyabstroykomplekt company bought out storage facilities and access routes. Then some private security company has secured these areas, thus, paralyzing the production process. Before this raiding seizure, the factory conveyor had never stopped for a day, and Bobrovsky Factory of Reinforced Concrete Structures could avoid the complete bankruptcy. Later, Energy became a cornerstone of the Dubrovsky’s business empire. And his only investment into this ‘hopeless’ factory were questionable contracts signed for the benefit of his own business. For example, when Dubrovsky became Deputy Principal General of UralVagonZavod, he initiated a renovation of production facilities of this state enterprise, shamelessly purchasing reinforced concrete structures from his own Energia plant.  

After finishing with Bobrovsky Plant of Reinforced Concrete Structures, Dubrovsky switched to the Closed Joint Stock Company – i.e. to its shareholders. He was not happy with the idea to share profits with others, and according to Kompromat 74, unwanted co-owners have been eliminated from the company using assistance by minor shareholders affiliated with Dubrovsky. At first, minor shareholders Vladimir Bakeev and Lilia Aniskina began bombarding Bobrovsky Factory of Reinforced Concrete Structures Closed Joint Stock Company, Dubrovsky himself, and his son with claims. In both cases, the court dismissed the plaintiffs’ claims. However, the name of Aniskina also ‘pops-up’ in relation to lawsuits disputing the legitimacy of a general meeting of shareholders and dividends illegally paid to Aniskina. Ultimately, Energia BPRCS Closed Joint Stock Company has been transformed into a limited liability company with the same name, whose only founder was Dubrovsky.

Выдержка из решения суда по делу о нелигитимности общего собрания акционеров

Scanned page: Abbreviate of adjudication on illegitimacy of the general meeting of shareholders 

Case materials include the protocol of the regular general meeting of shareholders of Energia Bobrovsky Plant of RCS Closed Joint Stock Company of June 30, 2006 stating that the Closed Joint Stock Company has elected three persons to the board of directors: V.S. Dobishev, A.A. Aniskina, and A.G. Sivakov (pp.103–105).

It was this board of directors who summoned and conducted the disputed meeting of shareholders dedicated to the results of Energia Bobrovsky Plant of RCS Closed Joint Stock Company operations for the year of 2006 (pp. 14–23; p. 47). 

Case materials indicate that it was repeatedly brought to the attention of shareholders and the board of directors that the applicable legislation has been violated (pp. 62, 63, and 64), including the illegitimacy of the board of directors (p. 15); however, the closed joint stock company hasn’t taken required action.

Выдержка из решения суда по делу о незаконно выплаченных дивидендах

Scanned page: Abbreviate of adjudication on illegally paid dividends

The defendant signed the list of Energia BPRCS Closed Joint Stock Company shareholders as of March 21, 2007 for payment of dividends based on financial results of company operations for the year of 2006 in the amount of 50% of the share nominal value: 5,000 rubles per one share. Accordingly, the defendant was offered to pay 30,000 rubles in dividends (p. 13).

On April 25, 2007, an annual general meeting of Energia BPRCS Closed Joint Stock Company shareholders was conducted and recorded in the protocol #11 of April 25, 2007 (pp. 14–23), at which the decision to pay the dividends has been made. 

According to the decision of the Arbitration Court of the Chelyabinsk Region of July 31, 2007 with regards to the case #A76-6565/2007-24-332 (pp. 25–30), that has taken legal effect, the decision of the annual general meeting of Energia BPRCS Closed Joint Stock Company shareholders of April 25, 2007, recorded in the protocol #11, is recognized null and void. 

There is no money, but you take care

Obviously, there is only one law recognized by Boris Dubrovsky: the fist law. For the governor, factory workers are like peasant serfs, while his partners – emancipated serfs. Every businessman in the Chelyabinsk region knows, who owns companies of Sinai group. However, the only warranty provided by the governor to business partners is his arbitrary rule. Just recently Evgeny Smolin, the owner of Polistirolbeton–Tsentr (Polysterene Concrete–Center) Limited Liability Company, had an opportunity to fully realize this. The businessman is still trying to receive payment from a governor’s company for subcontract works, the amount of which is less than 1% of the main contract cost. 

According to the case file, the Smolin’s company was a subcontractor for one of Dubrovsky’s companies – namely, Chelyabstroykomplekt. In 2015 Polistirolbeton–Tsentr performed filling of clamp bands in kindergartens built by Chelyabstroykomplekt in Magnitogorsk and Troitsk. Both facilities have been built in the framework of a municipal contract; the cost of the Troitsk kindergarden alone exceeded 114 million rubles. The cost of contract with Polistirolbeton–Tsentr slightly exceeded 1 million rubles for both kindergartens. The subcontractor has completed all works by the end of 2015; the general contractor – Chelyabstroykomplekt – accepted the works without complaints. But when it came to paying the invoices, the company has found better ways to use both the money and Polistirolbeton–Tsentr.

Сумма задолженности «Челябстройкомплекта»

Scanned page: Amount owed by Chelyabstroykomplekt to Polistirolbeton-Tsentr was 1,039,907.88 rubles as of January 12, 2016 

Real estate prices have dropped due to the economic crisis, and even the almighty governor could not help his Sinai corporation in that situation. However, the company management was successfully inventing ‘anti-crisis measures’, and Evgeny Smolin became a victim of such measures. Chelyabstroykomplekt decided not to pay million rubles in cash, but instead offered Smolin to accept an apartment as a payment. Initially, an apartment in Magnitogorsk worth 1.139 million rubles was promised to him, – the businessman told in his interview to Znak.com. Smolin agreed, and Polistirolbeton–Tsentr started looking for a buyer for this apartment. The builder – Chelyabstroykomplekt – was doing the same thing and managed to the find a buyer first. However, upon selling the apartment, Chelyabstroykomplekt still has not paid its debt. Instead, it offered to Smolin another, very expensive – for Magnitogorsk – apartment worth 1.4 million rubles. The builder also asked to repay back the 300 thousand rubles difference even before the sale of the new unit to its final owner. This trick would allow Chelyabstroykomplekt not only to save money, but also retain a realtor in the person of Smolin for free. Director of Polistirolbeton–Tsentr has filed a lawsuit in court and won. The defendant did not dispute the debt, but intends to delay the legal proceedings as much as possible and has already submitted an appeal. 

No one can say when Smolin receives his money. He has been already threatened with the administrative resource. According to Dubrovsky, everybody who is not happy with him, must leave. Like unwanted shareholders and workers of Energia have left. However, if all people unhappy with the governor leave, the Chelyabinsk region might became desolate of inhabitants.

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