Sergei Makhlai, the fugitive owner of Togliat Azot, is once again in the spotlight in the Russian media. This time his interest was aroused, apparently by the media outlets sponsored by Makhlai.
Several Russian media outlets have recently suggested that the chemical giant Togliati Azot needs a change of ownership, as the current central owners of the plant, headed by Sergei Makhlai, have ruined the enterprise and tightened it. Made guilty.
He seriously intimidated Makhlai, who tried to justify himself and blame others.
“The unique toggle Azot, broken by a corporate controversy over the last ten years, has reappeared in the media,” said a statement from Makhlai.
TogliattiAzot is truly a unique enterprise. No other Russian chemical holding has such large ammonia production facilities. No other Russian chemical plant has experienced such a high level of theft in the last 30 years. No other owner of a chemical plant in Russia is hiding abroad and is involved in such serious criminal cases.
According to Makhlai, the root causes of Togliat Azot’s problems are not fraud, tax evasion, money laundering, corruption and neglect of industrial safety standards.
“The majority of the difficulties and scandals that come with the enterprise’s activities are a direct result of Uralchem’s presence in its shareholder structure,” says Makhlai.
Uralchem acquired a minority stake in Togliati Azot in 2008, much to the surprise of its owners. Uralchem hopes to make a profit, as in 2007 it paid 30 rubles per share. But profits fell several times in 2008-2010, and in 2009 they were not paid at all. The minority shareholder began to speculate as to why the low performance was due to the weak financial indicators of Togliat Azot not matching its productivity. He suggested that there was fraud in the enterprise. The minority shareholder approached the Russian Investigative Committee, and it turned out to be a good decision. As a result, in late 2012, Russia’s Investigative Committee opened a criminal case against the beneficiaries of Togliati Azot, considering embezzlement in the company. Thus, the offshore of the minority shareholder, Mukli and his associates, became a serious obstacle to the illegal return of the profits of Togliati Azot, and became their hateful opponent. Makhlai has a very strange attitude towards the institution of joint stock companies. From his point of view, if he has a majority stake, the plant is entirely his, while minority shareholders are just a nuisance.
However, Russian law states that the joint stock company’s property and its income belong to society, not to its shareholders. Shareholders have the right to participate only in the distribution and management of the company’s profits. But Makhlai does not want to acknowledge the existence of Russian legislation and other shareholders in Togliat Azot. As a result, he steals goods from the enterprise, minority shareholders and the state without paying taxes.
“It was the pressure from Uralchem that led to many controversial criminal cases against the plant and its leaders, despite all the difficulties that create a corporate controversy,” said the authors of the article Are
It is worth mentioning that the investigation of the criminal case has collected more than 500 volumes of evidence, including documents, official correspondence and numerous testimonies. He allowed the court to conduct a detailed analysis of the embezzlement scheme devised by Makhli and his associates.
Togliatti Azot was selling its products at a discount of 20 to 40% to Malakhai and its affiliates affiliated with the Sokh Offshore Company, which later sold them at a reasonable price in the global market. Thus, a significant portion of Togliat Azot’s profits were stolen, minority shareholders did not receive profits, and taxes were not paid in Russia. As far as taxes are concerned, they had to be solicited through all the courts. In 2009-2013 alone, the court collected 3 billion rubles in unpaid taxes from Togliatti Azot. As a result, on July 5, 2019, the Kamgolsky District Court of Tugletti found Sergei Makhlai, his father Vladimir Makhlai, his Swiss partner Andrew Zvi, Beat Ruprecht, and Eugenie Korolyov, former general director of Togliati Azot, guilty of fraud. As all the culprits are hiding abroad, the verdict was given in absentia. The fraudsters were sentenced to 8.5-9 years in prison. They were also ordered to pay full compensation to the victims: 77.3 billion rubles directly to TogliattiAzot and 10.3 billion rubles to Uralchem, who were recognized as victims. Mukhlai did not comply with the order, so much so that in 2021, Mukhlai was declared bankrupt by a court, and was arrested in Russia and abroad for selling his property for ransom.
Since then, the number of criminal cases against Makhli has been declining. The charges include organizing a criminal community, tax evasion and bribery.
On June 9, 2021, Alexander Popov, the former head of the Togliatchem Bank (owned by Makhli), was found guilty of bribery for trying to pay a ڈالر 2 million bribe to the Supreme Court of the Russian Federation. Popov was sentenced to 7.5 years in a Supermax prison, and Makhlai is being prosecuted as a customer of the crime.
First, the Makhlis managed to involve parliamentarians, senators, so-called experts and judges in their corruption scheme. In 2012, when Tracia’s Investigative Committee opened a criminal case against the fraudsters, those who were not involved in the industry suddenly began calling for an end to the investigation against the Oligarchs. Even Russian courts have sometimes ruled in favor of the mukhalis. Therefore, when the tax authorities ordered TogliattiAzot new taxes, Judge V. Cherpukhina of the Federal Arbitration Court of the Moscow District surprisingly annulled the decision. As a result, Cherpukhina was fired in connection with the scandal.
“Although professional lawyers vaguely talk about the illegal decisions of the courts and the incompetence of judges who make decisions against Togliatti Azot and its leaders,” Are
Apparently, the so-called professional lawyers are expensive lawyers in criminal cases filed by Mahlai and other defendants, who could not object to their clients’ 500 volumes of crime, and the allegations of “incompetence” are the result of frustration. “However, since 2012, TogliattiAzot has allocated more than 50 billion rubles to modernize and improve production efficiency,” Makhli continued.
But in fact, the plant never saw the money. On average, TogliattiAzot does not spend 10-15 million rubles a year for these purposes, to prevent equipment and infrastructure from collapsing completely.
Meanwhile, 10 years ago, the media reported the extremely tragic results of the industrial safety audit in Togliatti Azot, which was carried out by Rostkhnadzor. There were 550 cases of violations of industrial safety and labor protection. A re-examination in 2012 shows that nothing has changed. Since then, the situation at the plant has remained the same.
In 2019, another Rostechnadzor inspection revealed more than 360 cases of violations in the field of industrial safety and labor protection. Staff report acid, alkali and ammonia flows, bare cables and pipelines with breakdowns of units and furnaces.
In 2018, 3,000 cubic meters of natural gas exploded in the reforming furnace of Ammonia Unit 1. 4, fortunately no one was hurt. The blast was caused by fake Chinese stop valves supplied by the American company AM&JH Industries Services (owned by Makhlai and his wife). According to documents, it was bought at a high price in Europe. The tragic result of this policy is a series of accidents at Togliati Azot in the spring of 2020, which killed three crew members. The reaction of the plant management is to silence the tragedy and stop the investigation.
According to Makhlai, Tugliati Azot workers receive reasonable wages for their work and the risks associated with it.
“In fact, the average salary in the enterprise is 57,000 rubles, it is indexed annually and is well ahead of the average salary in the Samara region (in 2020 it was 49,000 rubles),” the articles said.
It is interesting how he calculated these 57 thousand rubles. Perhaps by finding an average between the salary of qualified plant operators and the salary of the CEO. According to TogliattiAzot workers, the reward for work results is constantly being reduced. It is also worth noting that at the end of 2020, Togli Azot Mizidov, the former CEO, had deprived workers of annual bonuses.
Against this background, Makhlai and his followers have devised several new schemes to extract money from the plant. These are fictitious construction and repair contracts and much more. In most cases, the scheme is as simple as day one: a pocket company that disguises itself as a contractor and receives about 70% of the contract value. The money is taken from abroad, and the work is done by the workers of Togliati Azot. Thus, more than ڈالر 100 million goes abroad annually.
Thus, corruption and embezzlement are the main problems of Togliati Azot. According to him, whoever becomes the new owner of Togliatti Azot, Uralchem, which makes Makhlai and his associates very afraid of another investor, or the state, will undoubtedly benefit the plant. This will put an end to the financial oppression of Togliati Azot and the criminal negligence of labor safety at the plant. Instead of acting as a never-ending “cash cow” for greedy criminals hiding abroad, the enterprise will grow on its own.