Battle for Transaero. Banks, investigators, and judges search for broke company’s money  

Battle for Transaero. Banks, investigators, and judges search for broke company’s money
Photo: The CrimeRussia

Nearly forgotten Transaero Airlines still attracts the close attention of courts and the Investigative Committee of the Russian Federation (ICR). A criminal case has been instituted in relation to the company undergoing the bankruptcy procedure. Its creditors, insolvency administrator, and investigation are searching for missing billions of rubles. While VTB Bank is trying to pursue secondary liability on company's former owners, the ICR has initiated criminal proceedings against Andrei Kovalev, former Senior Accountant of Transaero.

Debit, credit, and pretrial detention facility

The ICR remanded top managers of the ruined company in custody to make sure that they do not abscond. Andrei Kovalev, former Senior Accountant of Transaero, was recently detained, too. For a long time, he was a witness in the criminal case pertaining to the nonpayment of salaries to Transaero employees, embezzlements on an especially large scale, and abuses of official powers entailing grave consequences. To imagine the scale of the offenses: the salary arrears had exceeded 400 million rubles ($6.4 million), while 1.3 billion rubles ($20.7 million) were stolen from the collapsing airline.

The ICR has been searching for the embezzled funds since March 2017. The investigators have high hopes for Kovalev’s professional memory – because all documents were likely destroyed. According to the investigation, Kovalev was in cahoots with Aleksander Burdin, ex-General Director of Transaero, and insolvency administrator Mikhail Kotov.

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The three fraudsters have embezzled a portion of the money perfectly legally – by paying bonuses to themselves. Other market players have written off Transaero after the revocation of its flight license – but the company’s ‘rescuers’ were still optimistic. Since November 2015, Burdin received 22 million rubles ($349.6 thousand), while Kovalev – over 21 million rubles ($333.7 thousand). Within three years, nine other top managers received in total some 120 million rubles ($1.9 million) in fees and bonuses. 

Other embezzlement schemes were pretty simple as well, including the lease of warehouses storing 113 cars belonging to the company and worth 500 million rubles ($7.9 million) and subsequent sale of these vehicles for next to nothing. This was just the tip of the iceberg – but after the first questioning, Burdin felt ill and relocated abroad to recover. In Russia, he was arrested in absentia – but this does not prevent the former General Director of Transaero from relaxing at European resorts.  

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Aleksander Burdin, ex-General Director of Transaero

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Insolvency administrator Mikhail Kotov

By contrast, Kotov has iron nerves. The insolvency administrator came to the first questioning with two boxes of papers proving his innocence. Being skilled in legal matters, Kotov left much fewer traces – he had never received bonuses, demonstratively opposed some deals made by Burdin, and arrived from sunny Italy for questioning upon the first request. However, the ill fame of Mikhail Kotov precedes him everywhere. 

Gref’s label

Kotov has successfully administered 29 bankruptcies. Sberbank was the creditor in the majority of insolvency proceedings handled by him. As a result, Kotov was even nicknamed Gref’s label.

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Some of these cases were so successful that Kotov prefers to keep silence about them, including Pavlovskgranit and Energomash Corporation. But his main ‘achievement' was the bankruptcy of Izh-Avto. The insolvency administrator had embezzled from the bankrupt car plant 700 thousand rubles ($11.1 thousand) on a monthly basis and was caught red-handed by the tax authorities. In turn, the creditors, including Sberbank, accused the Federal Tax Service of putting political pressure on a humble insolvency administrator. However, neither German Gref nor Aleksander Volkov, President of the Udmurt Republic, were able to explain how and when had Kotov joined the politics. He resigned from one self-regulatory organization, joined another one, and took charge of the Transaero bankruptcy.

Our
notes

Transaero Airlines was the largest private air carrier in Russia controlling 20% of the market. The company was founded in the 1990s and successfully survived through the crises of 1998 and 2008. Some experts explained this by the support of Tatiana Anodina, Chairperson of the Interstate Aviation Committee (IAC) and mother of Transaero co-owner Aleksander Pleshakov. Evgeny Primakov was also named among the ‘patrons’ of the air carrier. In the last years, the company had pursued an aggressive expansion strategy based on predatory pricing and credits. The financial results of Transaero had been worsening for a few years – but it started experiencing real problems shortly after the death of Primakov. An attempt to sale company’s assets to S7 Airlines failed, while the bankruptcy procedure turned into a criminal case involving billion-ruble embezzlements.

Thanks to Sberbank, Kotov got access to financial assets of Transaero Airlines – according to the current regulations, the insolvency administrator is appointed by the creditor who had initiated the bankruptcy proceedings first. Debt-ridden Transaero had plenty of creditors – but Sberbank managed to become the first one with a lead of one minute over Alfa Bank. Representatives of Alfa Bank accused German Gref of foul play – but were unable to change anything. 

Same people, same place 

It is logical therefore that Sberbank is virtually the only major creditor of Transaero fully satisfied with the bankruptcy procedure. On the one hand, it is difficult to stay calm when three persons are actively stealing money from a company owing you over 17 billion rubles ($270.1 million). On the other hand, the funds are embezzled by ‘right’ people. This is not the first time when billions of rubles disappear under the watchful eye of insolvency administrator Kotov. Apparently, he is going to be declared again a victim of the system or political prisoner any time soon. And everybody will be happy. 

Aeroflot–Russian Airlines, an old partner of Sberbank, is also satisfied. The air carrier gained a lot from the bankruptcy of Transaero being second only to its former owners – spouses Pleshakov. It is necessary to keep in mind that Transaero was stripped of the flight license right before its sale to Vladislav Filev. The rhetoric question is: who could be unhappy with the idea to share the market with a big private airline? In addition, the General Director of Transaero at that time was Dmitry Saprykin – who used to work under the authority of Vitaly Savel’ev.

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Dmitry Saprykin

One of the achievements of Saprykin was the revocation of the flight license that became a coup de grâce for Transaero – and Aeroflot received the flights earlier serviced by the collapsing airline. The investigators were surprised by company’s management techniques as well. For some reason, Saprykin and Aleksander Nerad’ko, Head of the Federal Air Transport Agency (Rosaviatsiya), have reduced the subsidies for Transaero from 1.095 billion to 485 million rubles ($17.4–7.7 million). The fate of the ‘saved’ 600 million rubles ($9.5 million) remains unknown. Too bad, the investigators have quickly lost the interest in the son of Petr Saprykin, ex-Head of the Department of Residential Policy and Residential Fund of the Moscow Government.

Aleksei Belokopyt, the current insolvency administrator of Transaero, is now suing Saprykin in the arbitration court. Belokopyt is trying to pursue secondary liability on the former top manager. The facts presented by the plaintiff are sufficient to institute a criminal case against Saprykin. In addition to the inexplicable cancellation of flights of still-operating Transaero, Saprykin had held the post of its General Director illegally. He had neither completed the training program for state aviation inspectors, nor passed the mandatory attestation, nor notified Rosaviatsiya about his appointment (the latter seems pretty logical).

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Spouses Pleshakov

Olga and Aleksander Pleshakov, former owners of Transaero, whose bankruptcy hadn’t affected their wealth in any way, may also be held secondarily liable. The bankrupt spouses travel all other the world visiting inter alia the USA, Côte d'Azur, and Azerbaijan. VTB Bank believes that their lavish lifestyle is paid by almost 250 billions of rubles ($4 billion) owed to it. Furthermore, some retroactive corrections were found in accounting reports of the company – and Andrei Kovalev, former Senior Accountant of Transaero, has to explain this to the investigation. 

The court is going to examine the motion brought by VTB Bank on June 18. If it is satisfied, the bank has a real chance to make Olga and Aleksander Pleshakov really bankrupt and broke. This became possible thanks to the American legislation obliging spouses Pleshakov to disclose their foreign assets. If you buy cheaply, you pay dearly.

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