Millions leak away through Russia’s largest hydro power producer – investigators

Published time: February 18, 2013 15:20
Edited time: February 18, 2013 19:20
Workers perform assembly works on the hydroelectric power-generating unit's runner at the assembly site in the Boguchany Hydroelectric Station's turbine hall. (RIA Novosti / Alexander Kryazhev)

Police have uncovered the embezzlement of over $33mln in state funds from RusHydro, one of the nation's biggest power generating companies.

The scandal got media attention last week, when Putin held a meeting of the Russian Commission on the development of the energy sector.

The president lashed out at the management of RusHydro, the country's biggest renewable energy producer over its usage of public money. Via a complicated chain of transfers through fly-by-night companies millions allocated to the company ended up in private hands.

In particular, Putin took RusHydro’s chief Evgeny Dod to task over the company’s failure to sort out the situation with the “money theft” and help to investigate the case. Dod’s attempt to defend himself by saying that the company got “no official proposals” to launch an investigation, got a harsh response from the President.

Do you understand what you’re saying now? You should be fighting with your teeth to recover these funds,” he empathized, cited RIA Novosti.

Gidrostroy – RusHydro's developer for a hydropower plant in the Moscow region – hired contractors with a staff of no more than two people and no any equipment or transport, Putin said during the meeting. Out of 12 billion roubles ($400 million) allocated for the construction of the plant, 6 billion were given to Gidrostroy.

On Sunday, the Interior Ministry’s official website published the results of their preliminary investigation into the case. According to the Ministry’s findings, Gidrostroy signed fake subcontracting agreements with subsidiary organizations. “Later, the funds sent to their accounts were cashed and stolen. The preliminary damage is around one billion roubles ($33 million),” the statement reads.

Investigators also said they had been inspecting RusHydro’s spending since 2009 over alleged misuse of funds. The ministry “repeatedly” applied to the company in order to get necessary financial documents. They also urged the management of the energy producer to file a complaint against their general contractor Gydrostroi.

However, no response followed and the required documents were not presented,” the statement reads.

Evgeny Dod said on Monday that RusHydro will come up with its response over the accusations by February 20. They are also preparing to file a case against Gidrostroy. As well as that, the company will launch an internal probe into the fraud and carry out additional checks on its general contractor starting from 2006, Dod told journalists on Monday.

Last week our work caused criticism from the President. Our current task is to act quickly to reveal problems and create a clear mechanism for the funding of all our projects so that similar criticism would never arise again,” he pointed out. The energy producer is also due to purge its contractors and subcontractors, Dod said.

Comments (3)

IN THE WEST THE LOOTING IS DONE OPENLY AND LEGALY (unregistered) 19.02.2013 09:51

The enegy companies just say they have to recoup the cost of investing in future infrastructure and your bill goes up about 3 x inflation each year. The same goes for food and public transport etc. Living standards are now similar to what they were in the 70s in UK.

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MEJanssen (unregistered) 19.02.2013 04:16

If you want to drain a swamp, you first have to wrestle with the alligators.  Then when there is less water, more alligators come out of hiding.  Stories like this hardly got coverage twenty years ago.  "Everybody does it."  Well, soon "everybody" will NOT do it, because even the most venal officials will have to be more discreet.  The auditors should be protected and should keep writing their reports and keep publicizing the corruption.  Crooks are going to jail, according to other stories in RT and RIA Novosti.  The government is just starting to clean up a multi-generational mess.  Good luck to all the cleaning crew.

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You dont say! (unregistered) 19.02.2013 00:30

Is Kursk,ups i meen Sputin,no sorry,Krim,no damn me,Russia realy corrupt,what do know.Here silly me was thunking,gangprospec t hangaround,lone wolf,chief in commrad billionaer,was clean as an unused dipper,waw,every day has its mindblowing revelation,like the Dane cheif of Riis doping circus,Lars Seier C,telling the Danes,how to run their circus,after he flet the contry,you know,only paying 2% tax,and running his Neoliberal parti from Swizzerland,aint we just lucky,we Have democracy,yes we have democracy to deal with this kind of criminals,just like in såain,they deal with Rayo,leader of the pain driven contry,but they are lucky to,they have democracy,oh yes,just the Corrupted Greece,with unemployment rate for young people at 60+%and a goldman who tricked everybody to belive,they where within the Convergensdemand debt to gdp at 3%,but they are damn lucky to,they to have democracy,just like the English,whos Banks ran the Libor scandal,they have the same luckracy,they even like the sweedes danish dutch belgiums spains have royal familys,that before in time,meening before the luck stroke with democracy,held them as slaves,now the people pay their livelyhold,yes under the banner of ,yes ,democracy,same democracy,under which,the bankers recived bonuses,whilst the people who pay for these bonuses,got Austerity,se,this is how demo/hipocracy works,and the hencemen,to this democracy,is the politicians???The people elected???What,did the people choose,their own hangman,well,this say a lot about the people,but still more about their Hangmen:Worst but not so common debated(Hundred of the most rich,could save the poors four time,remmember one would be enogh)???Here comes,how many more times 70 years,shal the slaugtered people still contribute to the biggest Illusion,UN,to erase powerty,when the hundred most rich,could do it just using a quater of what they made in 2012???Bip bob,thunk on that one,its also called democracy,meening,th e people gives charity to UN,who pay diplomats heavenly high salerys,to administrate,what the people gave to the poor,my thought here is,Who on earth,would be so dumb?????YOU!!!!!

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