The fact that the money collected from consumers of electricity in the Central and Volga regions was transferred to offshore companies is no longer news. A criminal case against the top managers of TNS energo was initiated in this regard back in the fall of 2020. However, there are still no official reports about the liquidation of the murky scheme for owning the company.
The TNS energo group of companies unites power supply companies in 11 regions of Russia. This is the second largest energy supply in the country in terms of energy sales. The business of such companies is simple: they buy electricity in the wholesale market at one price, and then sell it at retail at another price. Part of the proceeds is given to network companies that own the wires, the rest is recorded as profit.
profits and debts
It would seem that the resale of energy is just a gold mine. Indeed, in the company’s financial statements, everything looks beautiful, and sometimes even too much. For example, in 2020 and 2021, profit suddenly began to exceed revenue, reaching 8.65 billion rubles. At the same time, the latest audit report contains the following information: the company’s debt is about 73.2 billion rubles. And as of December 31, 2021, the value of the group’s short-term liabilities exceeds the value of current assets by 23.9 billion rubles. It turns out that the financial position of the country’s second largest energy retailer is not so stable, is it?
One of the possible reasons for these oddities was revealed to the world in the fall of 2020. Then, at the request of PJSC Rosseti Center and Volga Region (this is a state-owned grid company. – Ed.), A criminal case was initiated on embezzlement of 5.5 billion rubles. It was about the fact that the management of TNS energo, instead of paying off the bills with networkers, withdrew money for third-party projects, including abroad. Moreover, such a scheme existed for many years, presumably from 2011 to 2020. As a result, the court arrested five top managers of the energy sales company, including its former head Dmitry Arzhanov. After that, there were personnel changes in the company. But nothing has been heard about the change in the ownership structure. Rather, there have been talks, but no real reforms are visible. Meanwhile, it is the ownership structure of the company that creates the prerequisites for murky schemes for withdrawing money offshore.
Another remarkable detail. There is a noteworthy line in the latest audit report published by the company. It reads: “As of December 31, 2021, there was no ultimate controlling party.” Simply put, a giant company with a turnover of hundreds of billions of rubles either does not belong to anyone, or its beneficiary is cleverly hidden. In the first, you will agree, it is hard to believe. But this option cannot be ruled out. Moreover, it seems that in recent years, various people were in a hurry to get rid of the company’s shares, although they still used its financial flows. Who are these shareholders who put up with this state of affairs?
In the fall of 2020, the court arrested five top managers of TNS, including its former head Dmitry Arzhanov. After that, there were personnel changes in the company. But nothing is heard about changing the ownership structure
From PR to Billionaires
The largest shareholder of the company with a share of more than 28% is the Cypriot offshore Sunflake LTD. In 2017, Dmitry Arzhanov was named as its owner. Moreover, at that time, the offshore owned more than 60% of TNS Energo. Who is Dmitry Arzhanov? This is a native of the Nizhny Novgorod governor’s team of the late Boris Nemtsov – it was under his patronage that Arzhanov received the post of deputy chairman of the board of the Volga-Vyatka Prominbank. True, the bank soon went bankrupt, and Sergey Korolev received a term on this occasion, but Dmitry Arzhanov remained at large and went into political PR. He became a prominent figure in the electric power industry in 2006, when an old friend of Anatoly Chubais and the ex-head of the State Property Committee Alfred Koch, Alexander Rubanov, invited him as his deputy to the newly created OOO Transneftservice S. This company was founded by the pipeline monopoly Transneft, but soon spun off from it and began to buy energy sales organizations in the regions for hundreds of millions of rubles during auctions conducted by Chubais’s team. Dmitry Arzhanov was in charge of the purchase. Who stood behind Transneftservice S LLC remained a mystery for a short time. The fact is that the company quickly became the main energy supplier for Transneft. And from this scheme, the ears of the managers of Transneft, headed by its then head Semyon Vainshtok, stuck out.
However, in 2007, Semyon Vainshtok lost his position as head of Transneft, which forced the alignment to change. Since then, the company has become known as TNS energo, and Dmitry Arzhanov has headed it. The true beneficiaries hid in offshore companies. According to rumors, these could be Semyon Vainshtok, Alexander Rubanov, Alfred Kokh and Mikhail Abyzov (the ex-Minister for Open Government Affairs, now held in a pre-trial detention center). However, soon Dmitry Arzhanov called himself the controlling owner. Forbes wrote that he took a loan from the company itself in order to buy shares from the previous owners. Whether he became a real owner or began to front someone, one can only guess. However, formally, Dmitry Arzhanov then received a multi-billion dollar fortune.
Under Arzhanov, TNS energo got rid of Transneft contracts and took over the electricity markets in several regions. According to rumors, his countryman, a native of Nizhny Novgorod, Yuri Sentyurin, who from 2010 to 2017 served as Deputy Minister of Energy, could somehow contribute to this. This version is supported by the fact that, by some coincidence, Dmitry Arzhanov’s problems began just after Sentyurin’s resignation from the Ministry of Energy.
Endless “pyramid”
Based on the value of the company’s shares on the stock exchange, the capitalization of TNS energo in 2016 was 23 billion rubles, in 2022 – 7.2 billion rubles.
As a result, almost 20% of TNS energo came under the control of structures of the state bank VTB. It was also announced that Dmitry Arzhanov ceded his share in the offshore Sunflake Limited to Evgeny Giner (widely known as the president of CSKA), in connection with which he began to control 25% of TNS Energo. How much Giner could pay Arzhanov remained unknown. However, the other day there was news: Arzhanov, through the court, collected a debt of 52 million rubles from Giner under a loan agreement drawn up in 2019. Somehow this fact does not fit with the purchase of a stake worth billions of rubles.
All this suggests that the true share of Dmitry Arzhanov in the giant TNS energo holding was limited to about the same 52 million, and we are unlikely to find out the real beneficiaries of this scheme in the near future. However, the ownership of TNS Energo can hardly be called attractive now, given the company’s colossal debts. It is much more important to control the financial flows of the energy holding, which Dmitry Arzhanov has been doing for many years. According to rumors, he actively built his own agricultural business with the money he received, buying up land in southern Russia. It was Dmitry Arzhanov who was credited with controlling the well-known producer of cereals, the AFG National agricultural holding. However, here everything is not so simple. Last year, it turned out that 99% of this agricultural business was pledged to the structures of billionaire Iskander Makhmudov and eventually passed to him completely by court order. Therefore, the fabulous enrichment of Dmitry Arzhanov on the financial flows of TNS Energo is more and more like a PR campaign.
It is noteworthy that an important role in this scheme belongs not only to the murky Cypriot offshore companies, but also to a solid state bank. VTB structures at different times controlled up to 20% of the energy holding, so that the bankers, if they wished, could unearth all the ins and outs of this business. But here it is worth considering one interesting fact. VTB has been and remains the largest creditor of TNS energo, that is, the bank constantly receives payments on more and more new loans. Bankers could be reproached for imprudence: they allegedly invested in a financial pyramid. But it’s not. The constant increase in electricity tariffs makes the “pyramid” endless and provides a stable financial flow from which the bankers will receive their margin. And in the end, the final consumers of electricity will pay for everything.