Ministry of Defense intending to recover $87.5 million from AFK Sistema

Ministry of Defense intending to recover $87.5 million from AFK Sistema

The Moscow Arbitrazh Court registered the claim of the Ministry of Defense to RTI defense concern (owned by AFK Sistema) for the amount of almost 5 billion rubles ($87.5m). The details and causes of the case are not specified. According to the source of RBC in the Ministry of Defense, the lawsuit is related to the failure of a state defense order.

The Russian Ministry of Defense filed a lawsuit against the largest Russian private defense concern RTI JSC belonging to AFK Sistema, the financial and industrial group. The institution demands to collect almost 5 billion rubles ($87.5m) from the organization, the information published in the Commercial Case File follows.

The claim states that the Ministry filed a lawsuit on May, 4. The details and reasons for the case, on which the Ministry of Defense intends to sue the concern, are not specified. The total amount of relief sought is 4.965 billion rubles ($86.8m).

RTI has not received materials from the Arbitrazh Court yet, Konstantin Poltoranin, the representative of RTI press service, told RBC. According to him, the concern is nor aware of the essence of the claim.

"Therefore, we can not discuss the nature of the claims, the details of this claim. We see that the lawsuit is registered just like you do. However, we do not have any assumptions about the essence of claims", Poltoranin said.

The source of RBC in the Ministry of Defense surmised that the claim is connected with the failure of a state defense order.

Earlier the Arbitration Court of Bashkiria received a lawsuit from Rosneft and Bashneft to AFK Sistema and to Sistema-Invest to recover damages of 106.6 billion rubles ($1.8m). A day earlier, on May 10, Moscow Arbitration Court returned this claim to the companies without consideration. A source of Interfax familiar with the case pointed out that the lawsuit filed on May, 2 includes 57.2 billion rubles ($1bn) for the loss of shares of Sistema-Invest, 36.9 billion rubles ($645.7m) worth of Bashneft's debt and 12.5 billion rubles ($218.7m) for the cost of buying out the company's shares from minority shareholders. As sources of Vedomosti and Interfax clarified, the plaintiffs suffered losses in connection with the reorganization of Bashneft between 2013 and 2014.

As Mikhail Leontiev, Rosneft's spokesman, commented, "this refers to organizational and financial manipulations that led to a depreciation of the asset for the specified amount". After that the value of AFK Sistema's shares dropped by over 30%.

RTI concern belongs to AFK Sistema by 87% (Sovkombank owns 10%, and Sergey Boev, the chairman of the board of directors of the holding, has another 3%). The company is engaged in creating information tools for aerospace land-based defense and in organizing technical operation of missile and space defense. The concern is also the only manufacturer of high-potential above-the-horizon and over-horizon radars in the country.



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