Former CEO of Don Avia arrested over corruption charges

Published: 6/4/1999

The Rostov-on-Don militia has arrested the former CEO of Don Avia, Pavel Duzhnikov. He is accused by the militia of misappropriating funds from the company, to buy cars, computers and a rifle according to reports. Last year employees of Don Avia struck over delays in the payment of salaries with arrears of many months. By the end of April 1998 the company"s debts increased to over Rb 200 mn and the company was put under temporary management. The regional administration then forced Mr Duzhnikov from his position as CEO, although as head of one of the company"s departments he was inexplicably allowed to remain within the company. In October 1998 the militia began an investigation of financial irregularities within the company. They found that the company"s management had committed a number of breaches of the law particularly those relating to funds transfer to offshore accounts. Local sources however, while agreeing that there was the basis of investigation of Mr Duzhnikoy, believe that Duzhnikoy"s reluctance to sell a controlling stake in Don Avia to Don Invest Bank, friends of the administration, was the major reason for the investigation.

Article ID: 558