Rosnano actually allocated less money for projects than on paper – Audit Chamber

Rosnano actually allocated less money for projects than on paper – Audit Chamber
Anatoly Chubais

The difference was placed on deposits, while the interest was used for paying bonuses to the top managers of the company.

Rosnano invested 8 times less money in nano-projects, than stated in the documents sent to the Russian Ministry of Finance. The Audit Chamber came to this conclusion following an inspection, Life reported. It is noted that most of the state corporation’s funds were placed on deposits, while the interest was used for paying bonuses to the top managers.

The report says that the suspicions were caused by the bonds worth 20 billion rubles, which Rosnano had issued in April 2012. Those funds were intended for the development of nanotechnologies in the country, and the bonds were issued under the state guarantees. At the same time, the corporation accounted on a quarterly basis for the proper use of money to the Ministry of Finance.

At the end of three quarters of 2012, Rosnano reported about investing 8.4 billion from the received 20 billion rubles into nano-projects. However, the auditors found that 95% of the funds allocated under the state guarantees were in bank deposits with interest bearing. Thus, only about 1 billion rubles was actually allocated for field-specific projects, the rest of the money was drifting in the banking sector.

The report says that the data on the use of 7.4 billion rubles is "unreliable." The Audit Chamber stated that 88% of the data in Rosnano reports is unreliable. Besides, "the interest income from public funds placed with commercial credit institutions" was used to pay the Rosnano top managers.

Auditors drew attention to the reduction in the number of the company’s employees. In 2014, there were 37 people in Rosnano, and in 2015 there was only 1 employee. The mass discharge was explained as "a reduction in administrative costs, in accordance with best international practices." It was then that Anatoly Chubais also left his office in Rosnano. However, in fact, he became the head of a company with the same name that took control of Rosnano.

According to a government decree, "the means acquired by Rosnano with state guarantees cannot be used for remuneration payment to the executive staff." However, the decree does not extend to the top management of the managing company.

Under the agreement, Rosnano Managing Company receives fees for its services. "Rosnano pays a success fee to the managing company even on unprofitable projects, provided it exits them." Thus, according to the Audit Chamber, Rosnano has paid more than 8 billion rubles for the services of the managing company in the last two years. Of this amount, 7.9 billion rubles were in form management fees.

The press service of Rosnano said that they "strongly disagree with the statement of the Audit Chamber." Moreover, the state company has already stopped paying success fees on projects with negative returns.

In April 2016, the Audit Chamber already stated about violations in Rosnano. By the end of September last year, the state company financed 21 unprofitable projects for 60.5 billion rubles. Of this amount, 25.8 billion rubles were provided by state guarantees. At the same time, the fair value of the projects is 13.9 billion rubles - only 23% of the funding, the report says. Rosnano explains its unsuccessful investments with "market factors" and "innovation risks." It is noted that a full report on the results of the inspection will be submitted to the Federation Council and State Duma, and the disclosure will be transferred to the Ministry of Finance, Rosnano Managin Company, and the Government of the Russian Federation.

As a reminder, after 2013-2014 inspections, Prosecutor General's Office filed four cases: abuse of power, fraud, etc. In the summer of 2015, investigators arrested the former head of Rosnano (at the time of his office, the corporation was called Rosnanotekh), Leonid Melamed. He currently remains under house arrest.

Yet another inspection by the Audit Chamber was launched after a scandal with the video from a Rosnano corporate party at the end of 2015. In the video, Anatoly Chubais told subordinates that the state company "has a lot of money." Once Chubais personally paid 3.3 million rubles for a holiday, the auditors abandoned all their claims to the company.

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