Sales of Siberian airline's assets found to be illegal by arbitration court

Published: 12/7/1999

The Kemerovo arbitration court has declared that the transfer of assets of the bankrupt Kemerovo aviation company to city-owned Kemerovo Airport was illegal, supporting the view of the current temporary manager, Victor Belozerov. The aviation company was placed under administration in May 1999. Following privatisation in 1994, when substantial stakes were concentrated in the hands of a small minority, much of the fleet was sold off at knock-down prices or simply “disappeared", allegedly to fund costly lifestyles. Ticket sales, together with the central agency building, ended up in the hands of Transaeroservice. The company"s fate was sealed by May 1998 when, following another “re-distribution" of assets, Aman Tuleev, Governor of the Kemerovo region, took the law into his own hands and founded the state unitary enterprise Kemerovo Airport, despite the fact that under Russian law this could only be established by the Federal authorities. In October 1998, the Tax Police moved in to seize the airline"s assets and, together with Serguey Kuznetsov, then General Director, initiated a private tender. Tuleev"s Kemerovo Airport bought the enterprise for 23m rubles, against a book value of at least 75m rubles. Creditors and employees were left with nothing and reportedly in the case of employees were unaware of the sale. The future, following the verdict of the arbitration court, which supported the complaint brought against the company by Victor Belozerov remains uncertain. The Kemerovo Airport entity is now deemed to be void so the assets presumably return to the Kemerovo air company currently under bankruptcy protection, which will expire next May. Despite the illegality of the Kemerovo region"s actions it seems unlikely that the courts decision will significantly improve the chances of survival for this struggling airline and is unlikely to repay shareholders, many of whom of are employees. The demise of the company bears remarkable resemblance to that of Stavropol Airport, which has recently been de-privatised, following several years of dubious asset-stripping activities, but which may yet emerge from the ashes. Previous reports had suggested that Sibir, eager to increase its market share in western Siberia, could well swallow up Kemerovo. Associated articles : www.concise.org. 30th January 1999; www.concise.org. 8th June 1999; www.concise org. 26th November 1999.

Article ID: 1183