Unique case of ex-Head of Power Machines
After the arrests of ministers and billionaires, the business elite has understood – no one is invulnerable in Russia anymore. Recently industrial giant Power Machines Open Joint Stock Company has been shaken – the surprising arrest of its General Director by the Federal Security Service (FSB) of the Russian Federation amid the escalating international ‘turbine’ scandal has resulted in a criminal case and high-profile resignation.
Power agencies and machines
Both the Russian and Western media have already described in detail the story behind the arrest of Roman Filippov, General Director of Power Machines. Siemens AG, a German conglomerate company, suspects that the SGT5-2000E turbines originally intended for Tamanskaya Thermal Power Station were shipped to Crimea to build power stations in Sevastopol and Simferopol.
German company Siemens AG is a senior partner of Power Machines Open Joint Stock Company. Both companies are parts of Siemens Gas Turbine Technologies Holding B.V. Joint Venture Company Open Joint Stock Company. 65% of shares in it belong to Siemens AG, while 35% of shares belong to Power Machines. The relations between the two industrial giants have always been complicated. A few years ago, Siemens had tried to get full control over Power Machines – but due to the scandal over the acquisition of the controlling block of shares of Power Machines (Aleksei Mordashov, then-General Director of Power Machines, has ultimately acquired it), Siemens remains a partner of the Russian company only in the gas turbine segment. Siemens Gas Turbine Technologies Holding B.V. Joint Venture Company has been established to produce gas turbines.
While the Russian Government was fighting back Germans in the political sphere, the law enforcement structures were figuring out how could the foreigners become aware of such delicate details. Because the details were known to a very small group of Power Machines managers, General Director Roman Filippov has been summoned for questioning. The media became aware about his communication with the special services – but no official comments were made. Furthermore, it was announced that the questions asked to Filippov were not related to the ‘turbine story’ – although the media have already written by that time about searches performed in the office and residence of the General Director.
After the questioning, Filippov has been released on pledge not to leave the city, and the journalists were told that he has no procedural status. This may indicate that the investigation is uncertain yet with regards to the charges to be laid and the future status of the ex-General Director of Power Machines in that case. According to the preliminary information, the investigation supposes that the disclosure of a state secret was unintentional and had occurred due to an inadvertence of the businessman: somebody from the support staff could read the classified documents left unattended on the table. Now the Investigative Service of the FSB Directorate for St. Petersburg and the Leningrad Region has to solve this puzzle, while operatives of the industrial counterintelligence service are to check the entire personnel of Power Machines.
Roman Filippov became the General Director of Power Machines Open Joint Stock Company on April 10, 2015. The businessman was born in 1974. He has graduated from Peter the Great St. Petersburg Polytechnic University as an engineer–economist. In 1997, Filippov became employed with Severstal as an Economist in the Administration of Production Economy of the Cherepovets Steel Mill and was appointed the Head of the Administration of Production Economy in 2002. In the period of 2008–2010, Roman Filippov had worked as the Head of the Administration of Business Planning and Control; he was responsible for this sphere at the domestic and foreign enterprises belonging to the company. In 2010, he was appointed the Financial Director of the Resource Division of Severstal managing coal and iron ore assets of the company. In September 2013, Filippov was appointed the Director of Economic Affairs of Severstal Open Joint Stock Company.
Powers and issues
Power Machines is among the 20 largest industrial companies of St. Petersburg. This unique enterprise specializes in the power engineering; it is a prominent player at the international energy market. The majority of nuclear power plants built in Russia are equipped with so-called full-speed turbines. Such turbines are to be installed at the Leningrad Nuclear Power Plant № 2 and were supposed to be installed at Baltiiskaya Nuclear Power Plant. Power Machines produces these turbines.
Being a strategic enterprise, Power Machines has always been close to the state authorities. For example, in the ‘turbulent 1990s’, Boris Vainzikher, ex-General Director of Power Machines Machine-Building Group, had represented the team of Anatoly Chubais in its confrontation with the Gazprom clan.
Power Machines is the national leader in power engineering; it designs, produces, and ships equipment for thermal, nuclear, hydraulic, and gas turbine electric power stations. The company ranks the fourth in the world by the volume of installed equipment (over 300 thousand megawatt in 57 countries); its staff amounts to some 17 thousand people.
For seven years, its strategic partner Siemens had tried to acquire the control block of shares in Power Machines and held negotiations to purchase over 70% of its shares back in 2004, while owning only a few per cent in it. Similarly with the recent story, the government had to interfere into the scandal. The Federal Antimonopoly Service of Russia had administratively blocked the efforts of the German company. The next attempt of Siemens to purchase the lucrative shares was made in 2007, but Aleksei Mordashov managed to ‘pass the Germans on a curve’.
Our sources believe that the current situation is a revenge for old resentments. According to some experts, the Germans have strategically capitalized on the leaked information by sparkling a high-profile international scandal. Just a revenge for a number of failed commercial attempts. But these are just speculations – only the investigation is currently aware of the true way the things are.
Commercial and state secrets
The institution of a criminal case for disclosure of a state secret is an extraordinary step. Normally, suspects in such cases are hapless scientists who had shared some research findings with foreign colleagues or military men trying to sell a piece of their motherland. The motherland is normally aware of every their step; therefore, such cases are usually investigated in total informational silence. The media know only the date when the case is submitted to the court and the standard final verdict. Such cases are usually examined by three judges having top-secret clearance. The investigation reportedly has considerable influence on the judges – by the mere fact of its presence. Very little is known about the work of lawyers defending those charged with crimes against the state – because the defense attorneys sign a non-disclosure agreement as well.
Therefore, a prominent businessman charged with disclosure of a state secret is a kind of nonsense. Prior to Filippov, the only top manager prosecuted under Article 283 of the Criminal Code of the Russian Federation was Aleksander Gorbunov, Management Director of former Leninets Holding (later the enterprise has been transformed into Zaslon (Barrier) Joint Stock Company). The businessman was arrested following a report submitted by officers of the Security Service of the Mechanical Plant subordinate to the holding about a cache of arms hidden near his country home. Then FSB officers responsible for the operational support of this criminal case have stated that they suspect Gorbunov of disclosing some classified information to a U.S. citizen. According to the investigation, Gorbunov was involved into the embezzlement and misuse of budget funds and needed money desperately; the FSB believes that he had handed over some important documents pertaining to the defense order to the American.
The case of Power Machines has nothing in common with the above story. A criminal case has been instituted under Article 283 of the Criminal Code of the Russian Federation (Disclosure of a State Secret) – but so far, the enforcement authorities have no candidacies for suspects. In fact, the version with the fecklessness of the top management may be more realistic than their malicious intent. In that situation, the prompt and honorable resignation of Roman Filippov seems pretty logical. The government is neither interested in the malevolence of the German and other foreign partners nor in the escalation of the conflict with the turbines shipped to Crimea. Therefore, the special session of the Board of Directors of Power Machines was dedicated to the sole topic – termination of the labor contract with Filippov. This is quite understandable – the cases over disclosure of state secrets must not attract too much attention, especially at the international level.
The new Chief Executive Officer of Power Machines is Yuri Petrenya, a former deputy of Filippov and Technical Director of the company. He is a creature of Aleksei Mordashov, the owner of Power Machines. According to some information, his candidacy had been approved several days ago, immediately after the scandal, and the recent special session of the Board of Directors and official appointment of Petrenya were just a formality.Our
Yuri Petrenya is a prominent scientist specializing in stationery power-plant engineering, Doctor of Physics and Mathematics, Professor, and Associate Member of the Russian Academy of Sciences. Prior to the work in Power Machines, he was the General Director of Polzunov Scientific and Development Association on Research and Design of Power Equipment Joint-Stock Company. He used to be the Chairman of the Department of Power Plant and Electric Machine Engineering of Peter the Great St. Petersburg Polytechnic University. In addition, Yuri Petrenya is the Chairman of the Dissertations Board of Polzunov Scientific and Development Association on Research and Design of Power Equipment, Presidium Member of the Russian Academy of Sciences, Member of the International Committee of Global Energy Prize international award, and Member of the American Society of Mechanical Engineers (ASME).
Yuri Petrenya is a man of the old – Soviet – stock, one of the leading world scientists, and top-class specialist. He would never have a mess on his desk or leave classified documents unattended. According to some information, ex-General Director Roman Filippov may be charged only with neglect of duty. And the name of the true malefactor might be totally surprising for everybody.