'Moscow Liksutov Ring': how to fulfill state order without offending partners and make money 

'Moscow Liksutov Ring': how to fulfill state order without offending partners and make money
Maxim Liskutov has an eye for schemes Photo: The CrimeRussia

The Head of the Moscow Department of Transportation Maxim Liksutov is used to rely on trusted people when implementing transport projects. Therefore, as well as in the case with the organization of parking lots, in the creation of the Moscow central ring his long-time friends and business partners were involved.

Successful entrepreneurial past of Deputy Mayor for Transportation and Development of Road Transport Infrastructure of the city Maxim Liksutov distinguishes him from other officials. Firstly, he has a lot of connections in the business environment – both domestic and foreign – and, secondly, he is a pragmatic person, educated and modern: he is not stoop to banal 'cuts', kickbacks or bribes. It's the thing of the past for fools and provincials. Liksutov, in this context, has built an entire business system that can legitimately bring him an income in all conditions.

In September 2016, a new ambitious, and most importantly an expensive (236 billion rubles) project – the Moscow central ring (MCK) opened with fanfare. For its implementation, the Department of Transport headed by Liksutov is responsible. As for the project itself, there are no complaints - it was really necessary for the city and has already shown its effectiveness. The only question is the price and the choice of those who implements it.

In 2014, when Liksutov was only an adviser of the Mayor, the leading manufacturers of railway equipment in Russia – ZAO Transmashholding and Sinara Group went for a lucrative contract to supply rolling stock for the Moscow Ring Railway (that was initially the name of the transport project). Each of these concerns was promoting its creations, the first one was trying to sell the train EG2Tv called Ivolga developed by the Tverskoy Vagonostroitelny Zavod (Tver Carriage Plant), the second one – a more expensive ES2G Lastochka (Siemens Desiro) developed by the German company Siemens and made on the domestic factory Uralskiye Lokomotivy (Ural Locomotives). Both trains had blind end cars with urban interior and soft seats.

However, as of the end of 2015, both models did not take part in the competition: the first failed the necessary tests, the second one was considered by the Central Suburban Passenger Company as too expensive for the purchase and operation (CSPC, at that time, was selected by the operator serving the CIT, then, this right was passed to Russina Railways). Instead, it was decided to use the electric trains ED4M (modification ED4M-500) produced by the Demikhovsky Mashinostroitelny Zavod (Demikhovsky Engineering Plant), included in Transmashholding.

This persistent promotion of this company’s products was not coincidental. All the key figures involved in the project – Maxim Liksutov, CSPC CEO Mikhail Khromov, CEO of JSC MCK Alexey Zotov, CEO and the Member of the Board of Directors of LLC Aeroexpress Alexei Krivoruchko, as well as the owners of Transmashholding Andrey Bokarev and Iskander Makhmudov – are old friends.

In particular, in the late '90s, Bokarev, Makhmudov and Liksutov with their partner Sergey Glinka established a transport company called Transgroup AS, on the basis of which in 2002 Transmashholding emerged. It should be noted that at the same time in Estonia, Liksutov along with Glinka owned the company Transgroup Invest AS. By the time of his appointment as the Head of the Moscow Department of Transportation and Development of Road Transport Infrastructure, Liksutov was the holder of 25% of shares of the company TransGroup AS and 25% shares of Aeroexpress. In addition, he, at various times, held the position of the CEO of Aeroexpress, the Deputy Chairman of the Board of Directors of RailTransAuto, and was a member of the Board of Directors and the co-owner of Transmashholding.

It is to be noted that at the moment 62.5% of Transgroup AS belong to a certain company Cascade LLC, registered in Verkhnyaya Pyshma, and 37.5% of it is owned by the same Estonian Transgroup Invest AS. 45.84% of Aeroexpress belongs to a member of the group Transgroup Invest AS called Delta-Trans-Invest, 25% is owned by JSC Russian Railways, 17.5% - by Makhmudov, 7.5% - by Bokarev, and 4.2% - by Krivoruchko. RailTransAuto owns 51% of JSC Russian Railways and 49% of TransGroup AS LLC. And the sole owner of Transmashholding shares at the moment is a Dutch company The Breakers Investments B.V. At the same time, 33% of the shares of this company belong to the French corporation Alstom. The remaining parts are divided between the owners of TransGroup AS – Bokarev, Makhmudov and Glinka.

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Here is a small digression. After Liksutov becomes a civil servant in end of 2011, he starts to get rid of his business assets as required by law. In May 2012, he announced the sale of his stake in Transmashholding to his partners – Makhmudov, Bokarev and other managers. Previously, they owned 50% minus 1 share. And Liksutov earned for this deal more than paid the French concern Alstom paid for the blocking shares: according to analysts, about $ 370 million. At the same time, the so-called Panama archive showed that his connection with Transmashholding was, and perhaps, still is present as of today through the intricate network of offshore companies.

So, the sole owner of Transmashholding since 2007 is the Dutch The Breakers Investments B.V. Untill 2015, Alstom and OJSC Russian Railways owned 25% shares of this company. The rest was distributed among Bokarev, Makhmudov and 5 Cyprus offshore companies. The leak shows that Liksutov is associated with a certain Sermolent Equities Inc., which in turn owns 12.8% of the shares in each of the three offshore companies: Ammonis trading Ltd., Latorio Holdings Ltd. and Mafrido trading Ltd. And these companies are (along with a whole bunch of offshore companies) the missing owners of The Breakers Investments B.V., as reported by OJSC Russian Railways in its financial documents during the sale of the stake.

Связь Ликсутова с Sermolent

Liskutov’s connection with Sermolent

In addition, Liksutov’s name, along with his business partner Sergey Glinka, as well as the current owner of Aeroexpress Alexei Krivoruchko, is found in other offshore companies, also related to the above mentioned ones – in particular, in Compatico investsment Ltd., Maredaro trading Ltd., Prevalo investsments Ltd. And in 2011, in some of them, the name of Maxim Liksutov changes to Tatiana Liksutova, e.g. the assets were simply re-registered in his wife’s name after he started the civil service.

Founders of Ammonis trading Ltd.: 12.8% - Sermolent Equities Inc., 75% - Maredaro trading Ltd.

Founders of Latorio Holdings Ltd.: 12.8% - Sermolent Equities Inc., 75% - Prevalo investsments Ltd.

Founders of Maredaro trading Ltd.: 12.8% - Sermolent Equities Inc., 75% - Compatico investsment Ltd.

By the way, a citizen of Estonia Tatiana Liksutova now officially owns three companies: a furniture factory called Aprica style OÜ, Lavora OÜ which manages the restaurant Gianni, and, together with Sergey Glinka, Transgroup Invest AS. The restaurant and the factory have been teetering on the brink of bankruptcy for a long time, but Transgroup Invest, which she got from her husband, in 2015 only brought her more than 8 million Euros in revenue. And in Russia, her business connections are quite extensive.

Эстонские активы Татьяны Ликсутовой

Tatiana Liskutova’s Estonian Assets

Moreover, 50% of the shares of the holding were transferred to Tatiana in June of 2013, just before the law prohibiting government officials to have foreign assets entered into force.

It should also be added that Makhmudov and Bokarev through Moskovskaya Passazhirskaya Kompaniya (Moscow Passenger Company) LLC own a quarter of OJSC Central Suburban Passenger Company. And the OJSC CIT is owned by OJSC Russian Railways and the Department of Property of Moscow.

As it can be seen, such harmonious team considered buying the electric Swallow trains from their competitors to be a very unprofitable business.

The use of Swallows was lobbied by the Russian Railways. When Yakunin was in office, the Siemens trains were purchased from Germany, after which Sinara Group, together with Siemens Desiro, started manufacturing these trains adapted for use on the CIT in Verkhnyaya Pyshma. As a result, after the assignment of rights of the carrier from CSPC to the Russian Railways in January 21, 2016, the final choice of the train for the CIT was made in favor of the electric trains Swallow, and the previously planned ED4M-500 electric trains were never manufactured.

In anticipation of the launch of the line, Transmashholding made another attempt to grab a piece. When it became clear that the part of the Swallows did not come to the the depot from the plant in time, in order to fill the missing trains, Transmashholding suggested the use of the old electric trains ED4M, ET2M and ER2T of the domestic manufacture taken from suburban routes. However, July 20, 2016, in the course of testing, an incident occurred. The electric train ED4M-0403 simply does not fit the railway and scratched the side of its head care on the first platform of the planned route. This incident resulted in a temporary halt of traffic on the ring, for a few hours the railway along the Streshnevo platform was shifted a little further from the platform to fit the size, after which the traffic was back to normal. However, as a negative consequence of this displacement, between the stopping trains and the platform a considerable gap formed, which is now creating inconvenience to passengers.

Not only that all companies participating in the tender, one way or another, are linked, but also it turns out that Liksutov positioned sort of 'above the fight' between Transmashholding and Sinara Group. And, in general, he apparently did not care much about which of them would win. He has personal and business connections with all of them. With Transmashholding – through the former partners, and with Sinara promoted by OJSC Russian Railways – through his wife.

Платформа на МЦК оказалась шире

The MCK platform turned out to be wider than necessary

At the same in this case one neither the wife nor the official himself can be reproached. Officially, they are divorced. However, there is also some discrepancy in that. He himself said that he had divorced June 26, 2013 and the capital Zamoskvoretsky Court divided their property with his wife. As a result, all the foreign property went to his wife. Only the Head of Deptrans somehow fails to mention in which registry office – the Russian or Estonian one – he received a certificate of divorce, and whether he received it at all. But this is not so bad as well: as the spokeswoman of the Zamoskvoretsky Court Eugenia Pazukhina said, the Liksutovs divorce had taken place, but they had never divided their property. It is to be noted that after the divorce in the court, it is still necessary to contact the registry.

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Liskutova’s association with the Russian Railways

By the way, this is not the first and not the last case of the participation of Liksutov’s 'old' friends in urban projects.

In 2012, Deptrans announced a tender for the supply of 120 low-floor three-section trams for Moscow. The maximum amount of the tender amounted to 9.2 billion rubles.

Applications for participation in the auction were filed by Bombardier and Uralvagonzavod, Sinara Group, Ust-Katamsky Vagonostroitelny Zavod (Ust-Katam Machinery Plant) and a certain TramRus LLC, a joint venture owned by Transmashholding (of course) and Alstom, which actually won the competition by offering to supply the trams for 8.5 billion rubles.

At the same time, long before the auction, the press reported that in Moscow the trams manufactured exactly by Alstom will be introduced. The French company, by that time, had developed three variants of the tram design especially for Moscow. And in its experimental sample Mayor Sergei Sobyanin had a ride and said that it was suitable for the city both in price and quality.

However, some companies which lost the competition - Uralvagonzavod and Sinara Group – did not agree with the results of the auction, stating that the terms of reference have been written specifically for the tram Citadis 301 X produced by Alstom, and filed a complaint to the FAS. They considered it unreasonable, but the competition was canceled.

In the new competition, the OJSC Ural Plant of Transport Machine-Building representing Uralvagonzavod and Bombardier won.

But in the same year, the co-owner of Transmashholding Andrei Bokarev for $ 250 million bought a controlling stake of Mosmetrostroy. Two years later, with a partner Iskander Makhmudov he has consolidated 100% of the company. Despite the company's debt, the decision to purchase it proved to be quite promising: the capital allocated 1 trillion rubles for the construction of 78 new stations until 2020. Now, a few companies are involved in tunneling, but as the successor of the first subway tunnelers Mosmetrostroy gets most of the contracts. For example, it is involved in construction of about 40% of all the Moscow subway lines. Now, the orders of the city authorities form nearly 100% of the company's revenues, which, according to experts, will allow the company by the end of this year to get a plus 33 billion rubles in revenue.

In 2014, Transmashholding and Sinara Group also fought for supplying cars for the subway. And here, too, it was not without 'squeezing out' the spoilers and promoting the necessary participants. FAS received a joint statement from the Canadian engineering giant Bombardier, Gorodskiye Transportniye Resheniya (Urban Transport Solutions), Sinara Group and Uralvagonzavod. They complained against the State Unitary Enterprise Moscow Metro, which, in their view, put out a too biased condition. To supply 768 cars and provide their maintenance for their thirty years, the applicant must have a valid production of metro cars, work at least 5 years and have a net profit of not less than 1 billion rubles in the last three year. An additional plus would have been the presence of its own design bureau with experience of developments in the field of metro cars manufacturing and localization in Russia for three years. To the surprise, only one manufacturer – Transmashholding – met all of these requirements.

The FAS admitted the 'signs of irregularities' in the tender documentation of Moscow Metro, but did not cancel the tender. On December 1, 2014, Transmashholding was awarded the contract for the supply of cars and their maintenance for 30 years; the cost of the contract amounted to 130 billion rubles. A similar contract for 30 years, but 144 billion rubles, and the supply of 832 cars, in early 2014, was received by Metrovagonmash which is included in the holding.

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