How Georgy Boos avoids getting in trouble in many financial disputes.
The Moscow Arbitration Court granted Rosnano's request to recover 132 million rubles from Boos Lighting Group, owned by ex-governor Georgy Boos.
This is not the first financial conflict involving his company. Rosnano is determined to bankrupt the Boos Corporation, but has not succeeded so far. How does a former official manage to stay afloat without paying off multi-million dollar debts? Let’s figure it out.
Rosnano sued LLC MK Boos Lighting Group for 132 million rubles in November 2022. Led-Energoservice LLC, part of Georgy Boos Lighting Corporation, was also involved. In February 2023, the court ruled in favor of the plaintiff. This was preceded by a similar lawsuit in July 2022 for 210 million rubles. The structures controlled by George Boos refuse to pay their debts, as evidenced by the appeal filed in September 2022. The 9th Arbitration Court upheld the previous decision.
The ex-governor did not willingly pay, and the Federal Bailiff Service had to intervene to initiate enforcement proceedings in case No. 120362/22/77039-IP. These actions have seriously angered the heads of Rosnano, who plan to bankrupt the debtor.
In November 2020, LLC MK Boos Lighting Group purchased a 99.99% stake in LLC LED-Energoservice from a Rosnano subsidiary. In 2018, LED-Energoservice, which produces LEDs, became a non-core asset for Rosnano. The company’s production load did not exceed 35%. The sale looked like a good deal, and by the end of 2020, the company had incurred a loss of 21 million rubles.
According to industry experts, BL Group aimed to acquire Klever, the country’s only manufacturer of LED components for LED lamps, as its main asset. The second most important asset is Optogan LLC, which also produces LEDs under the same brand.
LED-Energoservice LLC owns a property complex in St. Petersburg with an area of 15,000 square meters and a 1.7-hectare land plot for constructing new production facilities.
The authorized capital is 163 million rubles.
Listed as a founder in BL Electronics (authorized capital – 646 million rubles).
Assets as of December 31, 2021 – 1.2 billion rubles.
Revenue for 2021 – 788 million rubles.
The contract terms were quite favorable for the lighting corporation. BL Group paid the first installment as well as the second and third tranches on time. Problems arose with the fourth tranche, as the buyer did not pay an additional 21 million rubles. Subsequently, payments from BL Group ceased.
BL Group paid the first installment and the following tranches on time, but failed to pay the extra 21 million rubles. Rosnano attempted to resolve the debt payment issue, but was unsuccessful, leading the corporation's top managers to seek legal action.
By the end of 2022, another section of ML Group, the St. Petersburg company Svetoservice-SPb, obtained several significant government contracts. One of these involves equipping high-quality outdoor lighting along roads in the Novoostrovskaya economic zone, requiring the construction of a transformer and distribution substation, laying external cable networks, and engineering communications along highways, with a contract value of 747 million rubles.
The same St. Petersburg Committee for Energy and Engineering awarded two additional contracts totaling 141 million rubles to “Svetoservis-SPb” for the reconstruction of outdoor lighting on Prospekt Kultury and Krylenko Street.
These contracts are part of a larger plan by the municipality of St. Petersburg to renovate lighting systems amounting to 1.7 billion rubles. The ex-governor of Kaliningrad has already secured half of the state orders in financial terms. Moreover, there is currently no competition in the organization of lighting in the Northern capital due to an unspoken agreement between the two main participants in the lighting market – Svetoservis-SPb and GUP Lensvet, with Boos winning tenders on highways and receiving city contracts on a residual basis.
The next concern is how this nearly billion rubles will be utilized. Since its establishment in 2005, Svetoservis-SPb LLC has obtained 170 state contracts totaling 9.2 billion rubles. However, these positive figures are overshadowed by 119 lawsuits related to the improper performance of obligations for these state orders, with claims exceeding 500 million rubles against the structure of George Boos.
In 2017, George Boos was nearly implicated in a high-profile criminal case involving the misappropriation of 114 billion rubles from Vneshprombank. However, the investigation did not establish their direct participation in the bank's embezzlement.
A total of 48 companies associated with lighting engineering are registered in the name of George Boos, with the corporation “Boos Lighting Group” being engaged in 79 legal proceedings with customers. The total amount of claims is 3.3 billion rubles. Despite this, the ex-governor remains active in business with government contracts.
The connections he has cultivated in the country’s political circles may allow the ex-governor to remain afloat despite the peculiar methods employed by his companies. Georgy Boos himself holds several significant positions and has connections in various industry committees and federations.
Or is there another factor in addition? LLC MK Boos Lighting Group has 6 factories for the production of lighting products, including supports and metal structures, in Russia and abroad. The corporation’s share in the production of lighting poles is about 30% of the total output in the country. Since 2020, LLC has been listed in the register of backbone enterprises in Russia.
