Urban Group suspected of illegal cash withdrawals
The head of the outfit said he would sell it to any bank for 1 ruble, and then dropped out of contact.
Signs of cash withdrawals have been found in the activities of the failed developer. An audit had revealed inefficient spending and overestimated construction costs, Kommersant reported referring to sources close to Urban Group. According to the auditors, Urban Group transferred 152 million rubles ($2.4m) to its owner Alexander Dolgin under a guarantee agreement; another 39 million rubles ($616.600) were credited to the account of his wife Natalya Dolgina for designing sales offices in 2017. Between 2011 and the first quarter of 2018, Urban Group made deals for a total of almost 483 billion rubles, of which 23% (112 billion rubles) could have been payments to high-risk counterparties.
Last week, the Moscow Region Arbitration Court declared bankrupt Vash Gorod (Your City), Urban Group’s subsidiary company. Foundation for the Protection of the Rights of Shared Construction Participants (created last fall) had filed the lawsuit. The foundation representative said during the court session that Glavgosstroynadzor (Central Office for Construction Supervision) inspections had found evidence of cash withdrawals.
"The audit revealed misuse of funds, including large amounts of cash withdrawn to the personal accounts of the group beneficiaries, among whom was Mr. Dolgin," said Maria Mikheeva, the foundation representative, when speaking in court.
Urban Group was rumored to have had financial issues back in 2017. Andrey Vorobyov, the Moscow region governor, said that the developer was behind schedule on a number of projects, while the company claimed those were temporary difficulties.
At some point information surfaced that Dolgin was going to sell his company to any bank for 1 ruble, and then dropped out of contact, says one of the officials.
70.9 billion rubles are required to complete Urban Group projects. The unsold housing costs 11.9 billion rubles, and the rest will be covered by the budget money of Russia (about 15 billion rubles), the Foundation for the Protection of the Rights of Shared Construction Participants (1.4 billion rubles, the sum Urban Group insured partnership agreements for) and the Moscow region budget (42.48 billion rubles).
Urban Group had been considered one of the largest developers in the Moscow region with its famous projects such as Lesoberezhny, Laikovo, Opalikha O3, Mitino O2, Vidny Gorod and others.
Initially, the defendants in the case had been charged with embezzlement through swindling in the amount of 225 million rubles ($3.3 million). In the final version of the indictment, the article was changed to 1.5-billion-ruble ($22.45 million) embezzlement.