Off-SHOR Airport via Russia

Investments from Chisinau International Airport, leased to a British offshore go to companies close to businessman Ilan Shor, Chairman of the Boarding Council of the "Avia Invest".

Author: Mariana Rață, Stela Mihailovici
11/12/2015 23434

Chisinau International Airport (AIC) lease is one of the most controversial "businesses" concluded by the Government of the Republic of Moldova in recent years. Although 5 European companies with experience in airport activity were invited to participate in the contest, the competition commission chose an anonymous company, founded by an airport in Russia and a Russian factory of locomotives production, which ceded the "business" to an off-shore. Today, investments in Airport modernization are made mostly based on money from the activity of AIC transferred to the accounts of companies close to Ilan Shor.

„Business” AIC

- An opaque contest, won by a company founded only a few days before and administered by people hiding their interests in offshore companies with statutory capital of one hundred pounds;

- A contract full of legal traps for state, with financial obligations worth 244 million euros and profits of more than half a billion euros for the assignee;

- Delayed investments via satellite companies, founded by the same group of interests;

- Criminal cases at the National Anti-Corruption Centre (CNA) and accusations, yet unproven, launched by the director of the institution Viorel Chetraru, of concessionaire’s involvement in schemes of robbery at Banca de Economii (Savings Bank) and Unibank.

Despite these irregularities, the governmental commission, created this summer at the request of the Prime Minister Valeriu Strelet concluded that the government has no "loophole" to terminate the contract damaging the state.

Investor overnight

Two years ago, the Moldovan government has taken a scandalous decision, to lease Chisinau International Airport for a period of 49 years. This was criticized by the society.  

The feasibility study issued by the Public Property Agency  proposed airport leasing for only 20-25 years, proving that there are not cases in the world (except an airport in Albania) where the main airport of the State  is leased for half a century. Moldovan government risked being the first and the only international airport in the Republic of Moldova was leased to a company founded overnight by two Russian companies which were used as "runway" for the interests of local businessmen who today hide themselves behind British and Dutch off-shores.

The Association of legal entities „Avia Invest”, founded by „Habarovski Aeroport” and „Kolomenski Zavod”, on August 2, 2013 (Friday) submitted documents of participation in the leasing contest on August 5 (Monday), which was deadline.  

On August 30, the Public Property Agency, represented by the deputy director Angela Susanu, signed the leasing agreement of the Airport with the SRL „Avia Invest”, a company with the same name, but which has not participated in the contest but had as founders the same Russian companies.  

From off-shore in off-shore

In just 2 years, SRL „Avia Invest” changed its owners 3 times. Six months after signing the agreement of Airport lease, one of the founders of „Avia Invest”, „Kolomenski Zavod”, part of the Russian group „Transmasholding” the largest producer of locomotives, wagons and rolling stock in Russia, withdrew.

One of the shareholders of the group is Serghei Glinca, a prosperous Moldovan businessman. The factory ceded 50% of shares to a British off-shore  „TB TEAM Management LLP”. Even if changes were made in the state register of legal entities on February 17, 2014, CNA has established that the sale and purchase of shares in "Avia Invest" were held on August 30, 2013, the day when the leasing agreement of the Airport was signed.

Two days later, on February 19, 2014, the off-shore ceded the equity stake to a Russian company founded one month before, „Komaksavia”, that takes over 45% of shares owned by „Habarovski Aeroport”.

Thus, the company from Moscow with a capital of 1300 euros, became overnight a package holder of 95% of shares of " Avia Invest", with a social capital of 85 million lei. The only shareholder of "Komaksavia" is now the same British offshore "TB TEAM Management LLP", founded in September 2012 and has a social capital estimated at one hundred pounds.

According to an excerpt of the British Registration Chamber, founders and associates of the company are other 2 off-shores: „Dylox United LTD” (British Virgin Islands) and „ValtaraA.v.v.” (the Netherlands), these were founded by other off-shores. Though the report of the company’s registration must contain signatures of the persons authorized within the company, these fields were missing.

Attempt of obliteration

On  September 29, "TB TEAM Management LLP" published an announcement in the "Official Gazette" in London to initiate actions of company’s delisting. In just a week, on October 6, the off-shore controlling "Avia Invest" changed its mind and announced the termination of the action of delisting. All this happened while in Chisinau, at the request of Prime Minister Valeriu Strelet, there was created a working group to seek solutions for terminating the leasing agreement of the airport.

Moreover, the confidential report of the Commission on the evaluation of the leasing contract of Chisinau International Airport shows that one of the reasons viable for terminating the leasing agreement of the airport is that SRL "Avia Invest" did not participate in the competition for Airport lease as distinct side.

The secrecy of ceding the statute of associate by „Kolomenski Zavod” within SRL „Avia Invest” was another serious reason to terminate the leasing agreement; the actions could be classified as „fraudulent conduct”. The Government did not react on time. The Civil Code provides for a limitation period of more than six months for declaring the nullity of the agreement based on this fact that expired in August 2014.

Investments in advance

There are questions related to the investments made in the Airport. According to the leasing contract by August 2015,  "Avia Invest" would have executed its works worth 45.1 million euros. The first phase of investments comprise  improvement and expansion works  of the terminal, runway modernization, reconstruction of taxiways, lighting system and the sewage system, construction of a new parking with a total surface of  24 thousand sq.m.

According to an official reply offered by the Ministry of Economy, on 3 September the Commission for leasing monitoring stated and accepted works in a volume of 16,780 million euros, executed in 2014. As for works performed this year, "according to the stipulations of the contract they will be checked in 2016", reads the reply of the Ministry.

The secret report drafted by the commission created at the request of Prime Minister showed other figures.  The financial inspection found that out of works worth 46.3 million Euros reported by "Avia Invest”, there were invoiced expenses worth 10.2 million euros and works estimated at only 1.2 million Euros were commissioned.

Photo: Ziarul Național

Out of 46,3 million euros invested, 29,997 million euros represent own resources, obtained from the Airport management and a sum of 16,344 million euros- a loan obtained by „Avia Invest”  from OOO „Aрсеналь-Капитал” in Russia.

The loan estimated at 27 million Euros was provided on July 18 current year in extremely advantageous conditions for a term of 10 years, with a 3% annual interest rate. The company „Aрсеналь-Капитал” was established in autumn last year and is specialized in financial intermediations (!).

National Anti-Corruption Center does not exclude the fact that this loan could be a scheme in which money obtained from non-performing loans of the Savings Bank and the Social Bank was invested in the Airport.

We tried to call the representatives of the company „Aрсеналь-Капитал”, but nobody answered the phone number of the company.

As for investments from own sources, according to the documents we own, in the period from November 2013 to May 2015 SRL "Avia Invest" recorded revenues from  the Airport management  estimated at over 812.7 million lei, or about 38 million euro.

13 million euros for a “ghost” company

The construction company “Exfactor Grup”, designated by “Avia Invest” as general entrepreneur is responsible for the construction and modernization works of AIC. In the period when the company started works, the founder of „Exfactor Grup”, Vladimir Tonu established a new company „Exfactor Grup Construct”, that took over the businesses with „Avia Invest”.

As of summer last year until current year, „Avia Invest” transferred to Tonu’s company a sum of 20,683 million Euros for the works in the Airport and on December 19, 2014 „Avia Invest” committed itself to transfer to the company advance payment estimated at 262, 8 million lei.

On the same day, „Exfactor Grup Construct” signed an agreement on transferring advance payment worth 262, 8 million lei to the company „Aviaconsulting” that committed itself to deliver 21905, 7 tons of bitumen, though the types of reported activities comprise aviation and consulting services, not construction work.

By summer current year, the company did not deliver any bitumen. According to the data from the Chamber of State Registration, „Aviaconsulting” was founded on September 30, 2014, two months before it became sub-entrepreneur at the Airport.

Current founder and manager of the company is the Russian citizen Vladimir Titenia, who manages another company, „Promgarant” in Russia, headquartered at the Moldovan Embassy in Moscow, on str. Kuznetki Most 21/5.

Previously, the press from Chisinau wrote about the fact that Ilan Shor, current president of the Administration Council of „Avia Invest”, owns many companies headquartered in buildings near the Moldovan Embassy in Russia.

„Aviaconsulting” had another manager when it was registered. It is about Halter Mathias, who is currently manager of the insurance company „Klassika Asigurari” of Ilan Shor.

In the period 2013-2015, „Avia Invest” purchased insurance services estimated at over 15 million lei from „Klassika Asigurari”, a company owned by Ilan Shor, he is also the president of the Administration Council of „Avia Invest”.

„We did not know anything”

We tried to call the representatives of the company „Aviaconsulting”. At the headquarters of the company registered on str. Zimbrului 10 A  in Chisinau, where there is the Anthropological School of Marc Tkaciuk, we were informed that the company „Aviaconsulting” does not have any office. Moreover, the representatives of the company „Dessa International”, owner of the building said that they have never heard about this company.

Also, we called the phone numbers of the company from Russia, managed by Titenia, nobody answered.

Contacted by us, the director of „Exfactor Grup Construct” Vladimir Tonu explained that they contracted the company „Aviaconsulting” because this proposed the best price for bitumen.

„We bought bitumen from many companies, including from „Aviaconsulting”, a Russian-Moldovan company, as I know. It has an exclusive agreement to bring some construction materials which will be used next year by the asphalt plant and the concrete plant. According to the agreement signed with „Strabag”, they did not assume the responsibility with the supply, they allowed us to supply the concrete factory and they deal with processing and installation”, said Tonu.

Head of „Exfactor Grup” said that he did not know about the existence of a relation between „Aviaconsulting” and Ilan Shor and that he was not influenced to contract this company that took the money at the beginning of current year but it will bring bitumen next year.

Works without projects and authorizations

Other money obtained from „Avia Invest”, „Exfactor Grup” shared with the employed sub-entrepreneurs. „ Most of the money we receive from the contractor goes away. We get less than 5%. This was the condition of donors, fewer profits and the highest quality of materials", said Tonu.

Though the Ministry of Regional Development and Constructions (MDRC) said that many of the works from the Airport were carried out without any projects and authorizations in constructions, and the State Construction Inspection said that it cannot check the works because it does not have access to documents, Tonu rejects the accusations. According to him, „Avia Invest” has an official document issued by MDRC that provides for the right to perform the works’ planning and execution simultaneously, so as not to stop the works.

We requested the leadership of the company „Avia Invest”, including Ilan Sor, an opinion on the off-shore owners of the company and investments at AIC. So far, we did not get any answer. We will come with more details in another investigation.

Contractual conditions in favor of the investor

The leasing agreement of AIC contains many "traps" and bad provisions for the state. The agreement provides for a term of two years for investment in the first stage. Another contract provides 48 months for the commissioning of the construction works. After another 36 months, the state is entitled to request termination of the leasing agreement if "Avia Invest” does not make necessary investments in the first stage. That can happen in 2020. In an official reply, the Ministry of Economy explains why there has been offered so long term to remediate the situation: "The term was offered, based on the specific of the long-term agreement".

Through another point of agreement, the Government pledged to keep all aviation fees throughout the period of the contract validity, including 9 euros for airport modernization. This fee was included in 2008, when the airport contracted loans from the European Bank for Reconstruction and Development and the European Investment Bank. Liabilities for these loans were fully extinguished; respectively this fee was supposed to be annulled. Its introduction in the leasing agreement was done improperly, reports the National Anti-corruption Center.

The contract obliges the concessionaire to invest in the airport until there is an annual passenger flow of 3.2 million. If current trends are maintained, this flow will be achieved by 2026, so in the next 36 years, "Avia Invest" will not be obliged to perform upgrading works.

We tried to find out who are the authors of the leasing contract. The official reply received from the Ministry of Economy wrote that the committee that drafted the text included representatives of the Ministry of Finance, Ministry of Economy, Ministry of Justice, Ministry of Transportation, and Ministry of Constructions and of Public Property Agency (APP) without showing their names. We requested the names and we did not get any answer. Angela Susanu, deputy director of APP, who has signed the leasing contract, refused to talk with us.

There were 7 competitors in the contest for the Chisinau International Airport lease. Except the companies from Russia, other airports wanted to manage the AIC: Airport from Paris, „Heathrow Airport Holdings” from Great Britain, „Flughafen Wien AG” from Austria, „AENA International” from Spain and „Houston Airport System” from US.

(To be continued)

This investigation is carried out within the Project „Shining a Light on Corruption in Moldova” carried out by the Center for investigative Journalism and Freedom House, with the financial support of the Norwegian Ministry of Foreign Affairs.

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