URALCHEM
OJSC has submitted documents to the Investigative Committee of the
Russian Federation in the Samara region to initiate criminal
proceedings under Part 4 of Art. 159 of the Criminal Code against the
management and shareholders of Togliattiazot.
Moscow,
Russia (January 18, 2013) -- URALCHEM
OJSC has submitted documents to the Investigative
Committee of the Russian Federation in the Samara region to initiate
criminal proceedings under Part 4 of Art. 159 of the Criminal Code
(fraud committed by an organized group or on a large scale) against
the management and shareholders of Togliattiazot.
URALCHEM
has knowledge that, in 2010, the management of Togliattiazot sold the
operating methanol production facilities, which have a capacity of
450,000 tons-per-year, to the company Tomet. The sale was conducted
without notice to the shareholders and at a price substantially below
the fair market value of the property. In particular, the sale of
equipment totalled 130.39 million roubles (around $4.32 mln USD) and
the land on which the production facilities are located was sold for
2.06 million roubles (around $600,000 USD). At the same time, a
similar unit was launched in Russia by another enterprise, which was
priced at 13.54 billion roubles (around $450 mln USD).
Therefore,
Togliattiazot effectively gave away property worth more than 13.543
billion roubles (around $450 mln USD) to Tomet. This property
comprised more than 48% of the book value of Togliattiazot's assets.
Moreover, the sale of the methanol production unit significantly
reduced the sources of income for Togliattiazot and resulted in a
sharp fall in its profits.
Registration
documents confirm that Tomet, through a chain of non-resident
companies located in offshore jurisdictions, is affiliated with
Togliattiazot's majority shareholders and management, namely members
of the Makhlais family and their partners, the Zivys family.
URALCHEM
has been a shareholder in Togliattiazot since 2008, owning 9.74% of
the company's shares. During this period, numerous violations of
corporate law and company law have been committed against
Togliattiazot's minority shareholders. The violations have been
confirmed by various decisions of Russia's Federal Financial Markets
Service and courts.
URALCHEM
also holds evidence showing that much of the rest of the production
equipment, buildings and facilities of Togliattiazot have also been
withdrawn from the company. In particular, an ammonia production
unit, gasholders, ammonia storage units, pipelines, overpasses, a
gas-distributing station, access roads and plots of land have been
sold to Tomet at reduced prices, in circumvention of the necessary
corporate procedures. As a result, the state has not received tax
from potential property sale revenue and the enterprise itself has
suffered damage to the amount of about $1 billion.
URALCHEM
intends to seek criminal proceedings for each case of the withdrawal
of assets from Togliattiazot, as the packages of documents, that are
needed to apply to the law enforcements authorities, are put
together.
In
December 2012, following URALCHEM's report, the Investigative
Committee of the Samara region launched a criminal investigation of
the management of Togliattiazot under Part 4 of Art. 159 of the
Criminal Code (a large scale fraud). In this case, a fraudulent
scheme was used to sell the company's products to affiliated traders
at lower prices. As a result of this scheme, during the period from
2008 to 2011, $550 million was withdrawn from the company.
-Ends-
PR
department
URALCHEM,
OJSC
Tel:
+7 (495) 721 89 89
E-Mail:
pr@uralchem.com
URALCHEM,
OJSC is one of the largest producers of nitrogen and phosphate
fertilisers in Russia and the CIS with production capacities of over
2.5 million tonnes of ammonium nitrate, 2.8 million tonnes of
ammonia, 0.8 million tonnes of MAP and DAP, 0.8 million tonnes of
complex fertilisers and 1.2 million tonnes of urea. URALCHEM, OJSC is
the second largest ammonium nitrate producer in the world and number
one in Russia, the second largest producer of nitrogen fertilisers in
Russia. Key production assets of URALCHEM, OJSC include Azot Branch
of URALCHEM, OJSC in Berezniki, Perm Region; OJSC Minudobrenia, Perm;
MFP Kirovo-Chepetsk Chemical Works, OJSC Branch in Kirovo-Chepetsk,
Kirov region; Voskresensk Mineral Fertilisers, OJSC in Voskresensk,
Moscow region.
Some
of the information in this press release may contain projections or
other forward-looking statements regarding future events or the
future financial performance of URALCHEM. We wish to caution you that
these statements are only predictions. We do not intend to update
these statements and our actual results may differ materially from
those contained in our projections or forward-looking statements,
including, among others, the achievement of anticipated levels of
profitability, growth, cost and synergy of our recent acquisitions,
the impact of competitive pricing, the ability to obtain necessary
regulatory approvals and licenses, the impact of developments in the
Russian economic, political and legal environment, financial risk
management and the impact of general business and global economic
conditions.
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