The holding company is in chaos as a bitter feud takes place between two sets of management, each claiming the right to run the company (796 words)

Published: 11/30/2001

Aviastar Holding, in contrast to Aviastar SP, the aircraft production facility, does not seem to be experiencing any of the stability and renewed energy injected by the change of management at the plant. In fact, the situation is exactly the opposite, according to local reports, after the election of its new board at a hotly disputed EGM called on 5th November by the State Property Fund and the Ulyanovsk Regional Property Fund, on the grounds of mismanagement by the former executive. Since 5th November, Aviastar Holding has effectively had two boards and two General Directors, with former board secretary, Constantin Feodosiadi, arguing that the new 12 man board is illegal. The former board had attempted to limit the scope of any new board's activities by holding a meeting two hours before the EGM and deciding to sell the debts of the holding company to Tupolev Leasing and the Inter-ANT (a 24.5% shareholder in Aviastar SP) and set the date for an alternative EGM on 4th January 2002. According to new board member, Mikhail Mirimsky (a former Sukhoi executive) and aerospace advisor to the Governor of Ulyanovsk, the decisions were voided by the lack of a quorum. An unnamed shareholder has now taken the issue to court to resolve the impasse and the case is scheduled to be heard on 13th December at the Ulyanovsk Arbitrage Court. Within the offices of the holding company it appears that chaos reigns, with reports that the newly appointed General Director Sergey Ponamarenko, understood to be the former mayor of Shakhty in the Rostov Region, had threatened to fire employees if they failed to tow the new management's line and turn up at the office at 8am on Tuesday 27th November, after the “former” General Director, Sergey Kartashov, had declared the 26th and 27th November as holidays. Predictably, the move has led Ponamarenko to accuse the “former” management of trying to undermine him by advising the employees to stay at home, with 26 out of 43 people reported to have complied on Monday 26th November. Ponamarenko refutes charges that he is trying to intimidate those who have worked for the former management. Earlier reports had suggested that the company's senior management had been reasonably well disposed to the changes in the company's board given that it had reduced the power of Tupolev in favour of Sirocco International and Leader Group. However, it seems that the reports did not accurately reflect the feelings of at least 26 of the Aviastar employees. For his part, the “former” General Director Kartashov has refused to resign and has kept possession of the company seal, an essential component in conducting business in Russia. Ponamarenko alleges that this has prevented the smooth operation of the company since his appointment as General Director on 8th November and he has told the press that, if the court case brings any resolution to the problem, he will be quite happy, given that at present he cannot even gain access to the company's files. It looks as though the confusion at Aviastar will continue until the courts decide which group is the legal board. However, given that the main allegations are that the election had breached procedural regulations, another EGM seems likely to return the same result. Tupolev's Alexander Polyakov (a former Aviastar executive) sounded like a man spoiling for a fight when he suggested that the new board would “kill the company” after the 5th November meeting. He also said that the individuals who became board members had only done negative things for the company and clearly implied that Victor Mikhailov, Chairman of the Russian Cargo Airlines Association, a former General Director of Aviastar, had been guilty of much worse activities, involving the disappearance of money and the departure of key personnel from Aviastar. Polyakov was no less disparaging about Igor Leiko of Leader Group, whom he described as a “former banker" who had not invested a “cent in the “Russian aerospace industry “ with the further suggestion that the company's relationship with American investors made it a “typical American spy”. The new board has so far been reluctant to discuss the situation as have the regional administration. However, those associated with the regional and federal government, such as Denis Manturov of state investment fund, Gosinkor, have talked about the return of assets to the company, suggesting that the objective for the state and regional government members of the board may be to unite Aviastar again into a single entity and reverse the split initiated to avoid the bankruptcy of the production facility.

Article ID: 2935