In February, electronic auctions were held for the sale of almost 39% of the shares of Togliattiazot JSC. However, the main owner of ToAZ, Sergei Makhlai, who is hiding abroad, is going to challenge the sale. To do this, a certain “investor from the UAE” was found, who, in fact, may turn out to be a businessman previously convicted of fraud.
The sale of shares became possible as a result of the bankruptcy procedure of the main owner of ToAZ, Sergei Makhlai, who is hiding abroad. In 2019, together with his accomplices, he was convicted under Part 4 of Art. 159 of the Criminal Code of the Russian Federation – fraud on an especially large scale, committed by an organized group of persons by prior agreement. As it was proved in court, the plant sold all export products at a 20-40% lower price to the Swiss offshore Nitrochem Distribution AG, affiliated with the main owners of ToAZ, and the latter sold it at a fair price. As part of the civil lawsuit, Makhlai and his accomplices were ordered to pay compensation to the victims in the case – 77.3 billion rubles. ToAZ and 10.3 billion rubles. Uralchem. Although the verdict entered into force on November 26, 2019, Makhlai refused to recognize the decisions of the Russian courts and pay compensation. This led to the bankruptcy of Makhlai in August last year and the organization of trading on February 8th.
As expected, Makhlai and his offshore companies, who acted as nominal owners of the shares, are going to challenge the sale. There was even a certain “investor from the UAE” with whom Makhlai’s offshore structures concluded a “legally binding agreement” (SPA) on the sale of ToAZ shares at the end of December. I must say that Makhlai had tried more than once to sell the arrested shares of ToAZ to someone. A few years ago, in the midst of a criminal investigation against him for large-scale fraud, he was already trying to organize a fictitious sale of his stake either to ex-president of Kalmykia Kirsan Ilyumzhinov or to a sovereign investment fund from the Middle East. But in all these cases, Makhlai’s attempts ended either in nothing or in reputational losses for those who agreed to act as a “front” for his machinations.
