Not-so-poor Marat. Who does Moscow Vice Mayor Khusnullin help to do business?
Moscow Vice Mayor Marat Khusnullin is one of the most powerful people in the Moscow City Hall. He controls the construction market and promotes business interests of his entourage. People say that the construction market is controlled by the so-called Tatar mafia. However, it is simply Khusnullin’s family.
It is no secret there is a lot of construction constantly being done in Moscow. Officials learned how to profit off of it a long time ago; publicly funded major construction projects help them make a lot of money. Former Moscow Mayor Yury Luzhkov’s wife Elena Baturina is one of the people profiting from it. Luzhkov was replaced by Sergey Sobyanin following the former’s scandalous dismissal. The latter gave a number of promising speeches before proceeding to renovate Moscow streets. He seriously criticized the real estate development industry in one of those speeches. He referred to it as a testimony to how corrupt officials are. Sobyanin made an unexpected move to deal with it – he appointed Marat Khusnullin his deputy for construction.
Khusnullin had been the Tatarstan Minister of Construction for more than 9 years. In Tatarstan, he did the same thing that got Luzhkov dismissed in Moscow. In a sense, Yury Mikhaylovich inspired Khusnullin. Khusnullin was appointed the minister in the early 2000s. It was the time the vicious state contract system and mortgage lending got off the ground. The business of Luzhkov’s wife also blossomed during this time. As vice mayor, Khusnullin was mostly interested in street tile business. As minster, he was mostly interested in water.
The quality of drinking water worried Tatarstan officials so much as to prompt the Tatarstan government to develop the 2006-2008 Tatarstan Drinking Water Program, allocating 4.2 billion rubles ($74 million) for it. It is worth mentioning the Program kept getting funding even after its completion. It was going to cost the budget 6.8 billion rubles ($119.8 million) by 2010. It was an enormous amount of funding back then. However, its results were poor. The Tatselzhilkomkhoz State Company was mostly responsible for the Program implementation. The state company was suddenly transformed into a joint-stock company after getting the funding in 2007.
Yet, Tatselzhilkomkhoz was not done with surprises. The Tatarstan Accounts Chamber got interested in results of the promising Drinking Water Program in 2009. Tatselzhilkomkhoz had violated all sorts of requirements, from those for designing buildings that have never been built to illegal seizure of state property. It is worth mentioning that the Tatarstan government and ministers lost interest in the future of drinking water and showed no concern for the new pipeline.
The Accounts Chamber mentioned something quite interesting in its reports, namely the story of Vodokanalservis that is very similar to that of Tatselzhilkomkhoz. Once a state company, it got some attention from officials only after it went private in 2005. Once it did, the company received 172.9 million rubles ($3 million) from the Tatarstan budget. The company built only one pipeline under the Program, spending one eighth of the budget in the process, or 485.9 million rubles ($8.5 million). The company made up for the high price by giving a 50-year warranty. Vodokanalservis impressed the tender board with the promised warranty period and got 85% of the contract price in advance.
Similarities between Vodokanalservis and Tatselzhilkomkhoz are no coincidence; the two companies’ managers are related. Averdiks became the owner of both companies in 2007. Averdix Business Corp. (British Virgin Islands) and Averdo Property Management Ltd (GB) were the owner of Averdiks. Thanks to the EU transparency laws, we were able to learn that Kazan based UK citizen Roza Khusnullina has been the Averdo Property Management CEO since 2005.
Document appointing Roza Khusnullina the CEO of the offshore company
Sure, Marat Khusnullin could just share a similar last name. However, Roza Khusnullina lived in his house. She confirmed in an interview that Marat Khusnullin is her son. She did not comment on transferring of the public money to the UK.
The shady story with the Drinking Water Program went mostly under the radar in Tatarstan. However, local ministers decided to shut it down, not wanting to get a visit from federal inspectors. Plus, Khusnullin already had a new business idea in mind. In 2008, he expressed public disdain at Tatstroy, a private constructor, not having work. He immediately asked the Tatarstan head to deal with the issue.
Has Khusnullin lived in the UK, such a move would have ended his political career. However, the Tatarstan government was ecstatic about his request. Tatstroy was washed with state contracts. The company took part in the largest Tatarstan construction projects, from the Khimgrad Science Park and Taneko Plant to 2013 Universiade and schools, kindergartens, and building blocks construction. Money the company made off of these projects went to the UK to never be found; Tatstroy is owned by already mentioned Averdix. This means Khusnullin’s mother owns at least half the company.
Tatstroy ran into problems when Khusnullin moved to Moscow. After being appointed Sobyanin’s deputy for construction, Khusnullin took control over the entirety of the Moscow construction market. Khusnullin’s entourage began moving to Moscow following his example. For example, Rinat Kazakov used to be the Averdix head. In Moscow, he became the Mosstroyrazvitie head. Rumor has it Khusnullin appointed about 15 people hailing from Tatarstan on high-ranking positions.
Kazakov used to be the Averdiks head
However, Khusnullin’s family has always been the top priority. The Khusnullins decided to start a new life in Moscow. Averiks and companies affiliated with it were no more; Roza Khusnullina is no longer the Averdo Property Management head. Other Khusnullin’s relatives became players of the Moscow construction market.
In 2016, the Timiryazev-Park project came about. The developer offered apartments in the center of the Dubki Park. However, the place had been reserved for a kindergarten construction. However, many plans changed alongside the Moscow City Hall administration. This includes plans for the kindergarten. The site was handed to Na Ivanovskoy Residential Complex in 2010. At the time, Nordnet Holdings Ltd. (British Virgin Islands) owned 90% of the company.
The developer could not do anything with the land due to it being designated for a social project. However, the situation changed in the fall of 2014. The Power Moscow Urban Development Committee changed the land designation. Pretty much anything can be built there now. The company also got a fantastic deal on its 3-year installment plan. Nordnet Holdings Ltd. soon shared 15% of Na Ivanovskoy Residential Complex with Tsentrograd. Factoring in premises, the Tsentrograd stake may be worth up to 250 million rubles ($4.4 million). It is time to learn who controls the two companies. The Nordnet Holdings Ltd. owner made a mistake in 2015. The company was mentioned in financial reports of UK-based Bluecastle owned by Russian billionaire Evgeny Giner. Khusnullin’s advisor Ildus Minnikhanov is the Tsentrograd head, according to Transparency International. Even Tatarstan media that usually quite cautious in what it says has long called Minnikhanov a family member and a business partner of Khusnullin.
List of Na Ivanovskoy Residential Complex owners at the beginning of construction
The Nordnet Holdings Ltd. owner made a mistake in 2015. The company was mentioned in financial reports of UK-based Bluecastle owned by Russian billionaire Evgeny Giner. Khusnullin’s advisor Ildus Minnikhanov is the Tsentrograd head, according to Transparency International. Even Tatarstan media that usually quite cautious in what it says has long called Minnikhanov a family member and a business partner of Khusnullin.
Bluecastle Enterprises Limited financial reports (37-page files for 2015-2016)
Evgeny Giner’s generosity is not surprising; he received a profitable developer’s project for 250 million rumbles. It seems the TSSKA Arena was easily commissioned because it was a part of a gift for the gift. Giner knows very well that fighting Tatarstan outsiders is very hard. Businesspeople not accepted by the eastern business community were openly accused of corruption, extortion, and threatening. Meanwhile, Khusnullin is preparing to take decisive actions and revive Tatstroy. The only thing left is to wait for the Moscow vice mayor to load it with work.
Gadzhiev was detained on June 14. A criminal case was initiated against him about participation in a terrorist organization (part 2 of article 205.5 of the Criminal Code) and promotion of terrorism (part 4 of article 205.1 of the Criminal Code).