Claims of insider deal (600 words)

Published: 10/17/2000

It seems despite widespread criticism from a number of sources including the airport's own management. The aviation authorities have approved Yekaterinburg's Koltsovo Airport's transfer of the refuelling facilities at the airport, to a new entity called TZK Koltsovo. The company will be controlled by the insurance company Koltso Urala with an 80.6% stake with 19.4% held by the airport. The proposed transfer has however, having been attacked from a number of sides including the city's duma, and has recently been included by Peter Latyshev, the President's representative in the Ural region, as part of a more general investigation of the management of state assets in the Sverdlovsk Region. To date, an investigation by the city's duma and Yury Zolotov, the regional Deputy General Prosecutor, has established that the transfer technically is legal. A view supported by the Federal Deputy Minister of Transportation, Karl Ruppel, although he does not believe the deal to be reasonable. Despite earlier statements claiming to be monitoring the situation at the airport, the Minister of State Property for the region Veniamin Golubitdsky has said under intense media pressure, that the transfer had occurred without discussion with the regional or federal ministries. Latyshev has ordered a series of investigations into the airport's management of state assets as part of a region wider examination of Sverdlovsk by broad range of Federal institutions including the Ministries of Finance, Tax and those entities investigating organised crime. . Local sources expect the investigations to reveal what have been described as “sensations”. The media and investigators primary focus is now centred on the beneficiaries of the transfer and whether the board of the airport have acted in the interests of the state, the 80% shareholder. Sources within the airport are of the view that those involved do not wish the deal to be investigated in great detail and concur that there are facts that remain to be revealed. For the airport's General Director Yury Kirillov, the transfer of the refuelling assets off the airport's balance sheet will allow the airport to save its P&L, as it is prevented “under Russian law from stopping aircraft refuelling simply because they have outstanding fuel debts”. A facility independent of the airport according to Kirillov, similar to those at Sochi and Moscow, would however, be able to refuse refuelling without payment. This seems a rather unusual justification for the move given that a number of major airports operate satisfactorily with their refuelling facilities held by the airport company and as Vnukovo Airlines has found of late, find little problem in cutting supplies to non-payers. The transfer is currently on hold for procedural reasons, after the uproar in the media , but is still reported likely to go ahead after a board meeting to be held at some point in December 2000. The level of interest in the transfer has however, made some of the state and regional representatives on the board nervous and there may be the possibility that their votes could change. In return for the deposit of Koltsovo's refuelling assets valued at 6m rubles in the new company the insurance company will invest 25m rubles, although the claim remains that the insurance company will simply siphon revenue from the venture. The duma's commission is also reported to possess evidence that the main shareholders of Koltso Urala are the Governor of the Sverdlovsk region Eduard Rossel and his economics advisor Alexander Venedictov through a 30% holding belonging to ZAO Kord, which is reported to be controlled by the two individuals.

Article ID: 2133