Roscosmos head office management suspected of embezzling $6.2mn in reconstruction of powder plant
The money was transferred to Moskapstroy LLC as part of a state defense order, however, after receiving an advance payment, the organization did not fulfill its obligations, and the guarantees provided for under contracts turned out to be fictitious.
The MIA initiated a criminal case of Swindling on an Especially Large Scale (part 4 of Art. 159 of the Russian Criminal Code) against the management of NPO Tekhnomash, the principal enterprise of Roscosmos, Kommersant reports. According to the investigation, the NPO transferred 410.2 million rubles ($6.21 million) to Moskapstroy LLC, which was to perform the reconstruction of the composite solid fuel production at the Perm Powder Plant in 2017. After receiving the advance payment from Tekhnomash, the organization did not fulfill its obligations, and the guarantees provided by Genbank under contracts turned out to be fictitious.
The reason for initiating the case was the results of the prosecutor’s investigation, which were transferred to the Ministry of Internal Affairs at the end of January 2019. The investigation found out that in 2017, the technical re-equipment of several strategic enterprises, including the Perm Powder Plant, was to begin as part of the Federal target program “Development of the Defense and Industrial Complex of the Russian Federation.” It was planned to perform various construction and installation work on the reconstruction of the security system at the plant, which was a state customer. Federal state unitary enterprise NPO Tekhnomash became the general contractor for construction. Tekhnomash is Roskosmos’ flagship company for implementation of the federal space programme in the field of technology. After a closed competitive tender, Tekhnomash tied a contract worth of 260 million rubles ($3.9 million) with OOO Moskapstroy. CEO of Moskapstroy Maxim Shcherbakov signed the relevant document. The name of the limited liability company under the laws of Russian Federation that was a contractor was equal to the name of a large construction company OAO Moskapstroy it has nothing to do with.
Besides the security systems, OAO Moskapstroy committed itself to develop documentation and carry out works for modernization of manufacturing of mixed solid fuel. In particular, it had to carry out “technical re-equipping of transformer substations” of the powder mill. Considering the contracts that had been tied, Tekhnomash gradually sent the contractor a few upfront payments worth of 440.4 million rubles ($6.6 million) in total.
According to the government contracts, the recipient had to provide irrevocable bank guarantees which ensured the return of the transferred amounts. Moskapstroy provided Tekhnomash with Genbak guarantees that turned out to be forged. The investigation believes the contractor provided these guarantees “intentionally, for the purpose of theft of the funds.” The last guarantee was given on August 16, 2017 when temporary administration was already working in the bank. The investigation theory is that it was registered retrospectively.
Moskapstroy did not fulfill the contracts. At the end of 2017, the parties to the agreements were able to submit acts of completed work for an amount of less than 32 million rubles ($484.4 thousand). According to the investigators, knowing about the fictitious nature of the guarantees and acting “within the framework of the agreement reached,” “unidentified persons from among the management” of Tekhnomash did not take measures to return the money. At the moment there are no accused persons in the case, however they may appear in the near future, sources of Kommersant report. One of the defendants could be the Head of Moskapstroy Maxim Shcherbakov.
Tekhnomash has been trying to recover the money paid since late 2018. Three claims were filed against Moskapstroy LLC, but no decisions have been made on them yet.
In August 2017, the Perm Powder Plant demanded through court to terminate the contract with Tekhnomash. The scientific development and production center sent a counter claim in which it also requested that the original agreement be terminated due to violations by the federal fiscal enterprise. In December 2017, the parties entered into a settlement agreement, under which Tekhnomash was supposed to complete the works without changing the price before November 30, 2018. Within ten days from the date of the settlement agreement’s approval, the contractor undertook to provide the Perm Powder Plant with fulfillment of the contract in the amount of at least 434.9 million rubles ($6.5 m).
As a result, the Plant considered that Tekhnomash had not fulfilled its obligations in terms of the contract, and in 2018 appealed to the Arbitration Court with a claim to issue the enforcement order, which was satisfied in May.
Sources of Kommersant note that if the money for the reconstruction of the Perm Powder Plant is not returned, the company will no longer receive funds from the state for this project. According to the interlocutor of the publication, that is why the federal fiscal enterprise tried till the very end to achieve the fulfillment of the contractual terms by the contractor and was forced to enter into the settlement agreement in December 2017.