Investigative Committee initiates criminal case over Urban Group developer collapse
There are no defendants in the criminal case, but the court authorized searches at the top managers of the developer.
The Investigative Committee of Russia initiated a criminal case under part 2 of Art. 201 of the Criminal Code (Abuse of Authority that entailed grave consequences) out of the Urban Group’s collapse. At the same time, as Kommersant reports, there are no defendants in the criminal case yet. The Golovinsky District Court of Moscow has not yet elected any preventive measures to the top managers of the Urban Group and its companies. However, the court already authorized searches in apartments of Urban Group and Ivastroy LLC (part of the group of companies) top managers.
Only one of the defendants, Andrey Puchkov, disagreed with the court's decision and his lawyers appealed to the Moscow City Court. In the meantime, the principal owner of Urban Group, Alexander Dolgin, blamed developer Puchkov and the department headed by him for the failures. In April 2018, the latter left the company and is now the Moscow region association of developers president.
According to Kommersant, the reason for initiation of the criminal case could be both statements of the Laikovo residential complex holders, and a complaint of the main owner of Urban Group, Alexander Dolgin. In April, the company faced an external audit, which revealed "holes and gross violations in the management."
As the auditors of the Foundation for the Protection of the Rights of Citizens who Participate in Shared Construction that applied to the Arbitrazh Court of the Moscow region with a petition for bankruptcy of Ivastroy found out, the company concluded 2.5 thousand contracts for participation in shared construction in the amount of 6.7 billion rubles ($107.6m) in facilities that were not put into operation. The actual costs for the facilities exceed the planned cost of the construction by 23% because of the overestimation of prices during construction. At the same time, the developer is suspected of misappropriating about 380 million rubles for houses not commissioned. On July 9, the Arbitrazh Court declared Ivastroy LLC bankrupt. Similarly, the Arbitrazh Court of the Moscow region declared another Urban Group's subsidiary Tvoy Gorod LLC bankrupt.
According to the developer, the company is currently erecting 2.137 million square meters of real estate. Of these, only 774 thousand square meters are under construction; the rest is off-plan, only construction permits are received. More than 70 billion rubles are required for the completion of all Urban Group facilities.
Recall, the day before it became known that the leadership of the failed developer Urban Group withdrew funds. Rumors about the financial problems appeared in 2017. The Governor of the Moscow region, Andrey Vorobiev, said that some projects got a backlog. However, the company assured that these are temporary difficulties.
After that, it became known that Dolgin was ready to sell the company to any bank for 1 ruble and then ceased to get in touch.