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MOSCOW: The chief of a top contractor building infrastructure for the 2014 Winter Olympic Games in the Russian city of Sochi has been fired in a corruption scandal, its holding company announced on Monday.
Ivan Kuznetsov, CEO of the Transstroi corporation, which belongs to the Basic Element holding company of leading Russian oligarch Oleg Deripaska, was dismissed for stealing shareholders' money, Basic Element said.
A statement from the holding company gave no further details on the nature of the alleged violations but said the funds involved amounted to tens of millions of dollars.
"Funds misappropriated from shareholders amount to hundreds of millions of rubles," the holding said in a statement.
The decision was made by Transstroi's board of directors also on account of Kuznetsov's "highly inadequate work," the statement said.
All information about Kuznetsov's illegal activities have been passed on to the police, it said, without offering details. Kuznetsov has worked in Transstroi since 2003 and had been CEO since March 2009.
The assets were stolen during the period when Kuznetsov held the CEO post, deputy chief executive of Basic Element, Andrei Elinson, told the Interfax news agency.
"Fake deals were signed with firms that were consequently closed by fake documents," he said.
"For example, there were deals for amounts highly exceeding market prices on the provided works and services. We have one agreement of a consulting nature worth 100-150 million rubles (3.3-4.9 million dollars)," he said.
The company will "try to get back the lost funds, if it is possible," Elinson added. Basic Element has already appointed Aleksei Barantsev as the new CEO. Barantsev also heads the entire construction sector at Basic Element.
Transstroi is responsible for several large-scale Olympic infrastructure projects in Sochi, where Russia is to host the Winter Games in 2014, including a cargo port and part of a 15.5-kilometre bypass through Sochi that is set to cost over 3.7 billion dollars.
The Russian authorities are pulling out all the stops to ensure the facilities are finished on time after fears they would be stretched to meet the deadline.
Facilities in the Black Sea city of Sochi need to be massively restored or built from scratch while the mountains that will stage the alpine events were until now an almost virgin area that had seen little development.
However both Russia and the International Olympic Committee have expressed confidence that the facilities will be built on time.
Basic Element is a conglomerate controlled by Deripaska, who has worked hard to restore his standing as one of Russia's most influential and wealthy oligarchs after being hit hard by the economic crisis.
The pro-government Izvestia newspaper Monday accused a subsidiary of Transstroi on Monday of misdirecting state funds on Sochi projects by creating hundreds of small sub-contracting firms.
"Billions that come from the budget, once they go through the filter of middle-men, turn into millions," the paper said, referring to Tunnel Group No 44, which is involved in the bypass.
- AFP/de
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