From companies demand to pay for the corruption offense and return the funds to the budget.
In the Kurgan region, a protracted conflict related to the creation of a cartel in the MSW treatment market has sharply escalated. Lengthy proceedings resulted in a statement of claim by the prosecutor’s office against the regional operator Clean City and the Ecosystem Company affiliated with it.
The participants in the conspiracy were required to compensate for the multimillion-dollar damage caused by “muddy schemes” during electronic auctions for the right to transport waste, as well as to return the subsidy paid from the regional budget. Violations of companies, which, according to market participants, “have for a long time enjoyed more than a loyal attitude from the entourage of Governor Vadim Shumkov” and his partners, were previously revealed by the Federal Antimonopoly Service with the support of the same prosecutor’s office. Now, as insiders say, within the oversight itself, apparently, there are “multidirectional strength.”
According to their estimates, if the party advocating the recovery of funds takes over, then this will entail fatal consequences for the regoperator, and the only question will be how long it will be recognized as financially insolvent. A replacement for Clean City in a highly competitive market is likely to be found quickly, especially given the threat of a “garbage collapse.”
The Arbitration Court considered the application of the Prosecutor’s Office of the Kurgan Region to the regional operator for the treatment of MSW – Clean City LLC – and its partner – Ecosystem Company LLC. Supervision demanded the recovery of about 345 million rubles.
To clarify, the statement was a continuation of a story that has been going on since 2019, when, following the results of electronic auctions related to the transportation of MSW, more than a dozen contracts were concluded between the Clean City and Ecosystem Company for hundreds of millions of rubles.
Prosecutor’s Office of the Kurgan Region
Some time later, the FAS became interested in the contracts, and subsequent agreements, including 8 from 2021, also came into view. It is noteworthy that the contracts of 2019 were concluded in the absence of competition, and Ecosystem was the only participant in the cancellations.
In the course of the investigation conducted by the antimonopolists, it turned out that there are clear signs of affiliation between the Clean City and its contractor, in particular, between the beneficiaries of the firms – the owner of the Clean City Dmitry Elizarov and his business partner, the founder of Ecosystem Company Evgeny Klevtsov. So, among other things, financial transfers worth millions of rubles were uncovered, as well as the use by Ecosystem employees of the Clean City seals and strong economic ties.
As a result, the FAS issued a conclusion on the creation of a cartel and the conclusion of anti-competitive agreements, and the information was subsequently sent to law enforcement agencies, taking into account the amounts of contracts. At the beginning of this year, when the situation again became public, observers suggested that “the conflict could lead to criminal cases against officials of companies involved in the creation of the cartel, as well as their curators from among the officials.” Nevertheless, no questions from the authorities of the Trans-Urals, including the governor Vadim Shumkov, to the organizers of the “muddy schemes” were publicly raised.
One way or another, in the near future, officials are likely to have to answer uncomfortable questions. They may be prompted to do so by a lawsuit filed by the Prosecutor’s Office of the Kurgan Region.
As indicated in the application submitted to the arbitration and already accepted for consideration, the prosecutor of the Kurgan region Andrey Nazarov demands to invalidate 11 electronic auctions for the right to conclude a contract for the provision of services for the transportation of municipal solid waste. In all cases, Ecosystem Company was the contractor.
“To recover from Clean City LLC in the income of the Russian Federation the damage caused as a result of a corruption offense in the amount of 296,002,228.67 rubles,” the arbitration file says.
In addition, the supervision requires the court to recover from opponents about 48 million rubles in subsidies received to compensate for the actually not incurred costs of transporting MSW.
While the parties are preparing for confrontation, the interlocutors of the agency in the market express their own opinions regarding the requirements of the supervisory authority and the likely future scenarios for the development of the conflict.
“There are two forces in the prosecutor’s office, in my opinion. One of them is those who occupy the position of a regional operator and have been working in the Trans-Urals for a long time. The other, on the contrary, opposes his activities and the likely patronage of officials. The lawsuit has been in preparation for a long time. From the regional court he was transferred to arbitration, since the case for the recovery of funds concerns economic activities. The statement itself is a direct consequence of the decision of the FAS on the existence of a cartel, and the investigation of the antimonopolists was initiated on the basis of an audit by the prosecutor’s office. Plus, as far as I know, the materials were handed over to the security forces, but their further fate is still unknown, in particular, whether criminal cases will be initiated,” says a representative of the waste management market.
One way or another, according to experts, if the court recognizes the requirements of the prosecutor’s office as legitimate, and the funds are recoverable, for a company generating annual losses, the issue of bankruptcy “will become only a matter of time.” “This year or next, it doesn’t matter. More interestingly, how prepared are the authorities of the region for such a development of the situation? Judging by their work, they are completely unprepared for this and are unable to calculate the risks. There were terrible fires, there will be a garbage collapse, ”the industry representatives give disappointing estimates.