The ownership change of “Rostovvodokanal” will strongly limit the access to water for residents
The seized ownership of Rostovvodokanal will disrupt the party in power's plans for the election. In Rostov-on-Don, a few things stay the same – residents still don't get good water, city managers can't fix the situation, and German Vishnevsky has been, is, and plans to keep managing Rostovvodokanal, blaming everyone for hostile takeovers and illegal purposes, while presenting himself as a patriot.
Rostov-on-Don is the main city in the south of the Russian Federation. The city has a rich history, from Suvorov to Bashmet. It has played a significant role in the Turkish wars, revolution, and civil war. The city has endured so much in its 273 years that residents shouldn't be surprised anymore.
Maybe that's why the controversies around Rostovvodokanal, one of the city's key businesses, don't seem unbelievable, even though they are. Despite the proximity of the Don River, residents of Rostov have long struggled with water issues – frequent breakdowns, low water pressure, and water with a bad smell. About 15 years ago, city managers decided to hand over the water utility to private companies – essentially, on a concession. But as often happens, a good idea led to such a disastrous implementation that even investigators struggle to unravel, despite their efforts.
Legally speaking, Rostovvodokanal can be called a troubled place – in recent years, it has been flooded with criminal cases. It all began when Stanislav Svetlitsky, the president of Eurasian holding and former Deputy Minister of Energy of the Russian Federation, was arrested at the water utility's premises in 2016. He held a controlling stake in Rostovvodokanal. In 2020, Svetlitsky was sentenced to 12 years but continued to oversee his assets through managers.
Following Stanislav Svetlitsky, his son Georgy, who chaired the board of directors of the water utility, was arrested on suspicion of embezzling 204 million rubles in 2021. In July 2022, Dmitry Kubrak, another former CEO of Rostovvodokanal, was imprisoned. It's worth noting that in 2021, a manager who disagreed with his dismissal barricaded himself in his office and lived there for several weeks. In August 2022, the next CEO of Rostovvodokanal, Mikhail Porksheev, was interrogated. In simple terms, the conflict involves the Svetlitsky clan and the breakaway managers, led by the former CEO of Eurasian JSC, German Vishnevsky.
According to the editors, this conflict could continue indefinitely – both sides have the resources to come up with newsworthy events and criminal cases. The only problem is that over one million residents of Rostov-on-Don are suffering as a result. The situation with drinking water in the city is becoming critical – according to the Rostov administration's press service, 47% of the water supply and sewerage networks are physically deteriorated. According to ecologist Alexei Lebedev, the shallowing of rivers in the Rostov region is leading to a significant decrease in drinking water. Valery Stakheev, Deputy Chairman of the Southern Scientific Center of the Russian Academy of Sciences, warned in 2021 that the salinity of the Sea of Azov had reached a record high, posing a threat to the water supply of Rostov-on-Don and all settlements at the mouth of the Don.
Cypriot is not a patriot
In 2023, it seems that the city manager of Rostov-on-Don, Alexei Logvinenko, told reporters that the Eurasian JSC's share in Rostovvodokanal enterprise was taken and the property was put up for auction because it became impossible to wait any longer. Logvinenko said 75% of the utility company shares were seized as compensation to the state in a criminal case on embezzlement of funds from the depositors of the Narodny Credit bank. He plans to attract a new experienced operator to manage the water utilities in other cities of Russia. Logvinenko wants the enterprise to be under the control of a business directly related to utilities.
But if Logvinenko doesn't want to see inexperienced managers of water utilities, then the current owners and managers clearly disagree with him. German Vishnevsky, one of the main top managers of Eurasian JSC, has been involved in numerous scandals and accusations related to the management of the water utility.
In November 2021, due to a disagreement between the majority shareholders of Rostov Vodokanal and German Vishnevsky, Vishnevsky left his position. JSC “Evraziysky” reported on Vishnevsky’s attempt to change the top management of the water utility and appealed to law enforcement agencies and the court about this. After that, the general director of Eurasian JSC, German Vishnevsky, accused the management of the water utility of financial fraud and announced the dissolution of the company's board of directors. In February 2022, it was revealed that the beneficiary of Eurasian JSC is a Caribbean offshore – Lareli Holdings ltd. Foreigners are the majority shareholder of Eurasian JSC. This means the company pays fewer taxes.
Fortels of a degrading Society
It should be noted that the water utility of Rostov-on-Don is not the only loss-making asset of “Eurasian” put up for auction. OJSC Nizhnovatomenergosbyt, owned by JSC Eurasian, was declared bankrupt with a loss of more than two and a half billion rubles. There are other organizations owned by JSC Eurasian that incurred losses which can be discussed later.
And here the most interesting begins. On February 2, 2023, the bankruptcy trustee Anatoly Baranov, who was appointed to manage the bankruptcy of Nizhnovatomenergosbyt OJSC, stated in the Moscow Arbitration Court that the controlling persons of Eurasian JSC could have taken actions aimed at reducing the value of property owned by JSC ” Eurasian, as well as its subsidiaries, including JSC Rostovvodokanal, despite prohibitions by the bailiffs. An extraordinary meeting of shareholders of Rostovvodokanal JSC was convened on February 2, at which the board of directors was re-elected at Vishnevsky's request.
According to the bankruptcy trustee, these actions around Rostovvodokanal JSC could be aimed at an unfair change of management with the aim of the subsequent withdrawal of assets, bypassing the rights and interests of Nizhnovatomenergosbyt JSC and affected creditors protected by the court. Simply put, Vishnevsky, regardless of the instructions of the regulatory authorities, may not want to pay debts and may hide assets that the court can reach. The bankruptcy trustee was heard, and in order to preserve the seized property, the shareholders of Rostovvodokanal were forbidden to make changes to the property status of the organization and change the composition of the management bodies.
It should be noted that even without debts in Rostovvodokanal, things are going, to put it mildly, not very … Boorish attitude, slowness, attempts to deceive – all this can be easily found on sites with reviews about the company’s work. On February 2 this year, four employees of Rostovvodokanal were detained for extorting bribes. German Vishnevsky immediately announced their dismissal without any special proceedings, but did not even bother to conduct a proper investigation into how, why and under whose “supervision” the criminal acts were carried out. Already on February 3, Vishnevsky spoke about a new “attempt to raider capture” of Rostovvodokanal. According to him, employees associated with Alfa Group are now interested in the enterprise.
New Hope?
Natalya Oskina, a deputy from the Communist Party of the Russian Federation, has repeatedly called on law enforcement agencies to analyze the situation, since Evraziysky did not fulfill his promises, while taking good soft loans, but did not keep his promises to restore networks and provide citizens with quality water.
In September 2023, elections to the Regional Legislative Assembly will be held in Rostov-on-Don. The problem of clean drinking water in the city and its control by dubious semi-bankrupt structures can become a very big headache for the party in power, the governor and their curators in the federal center. The question remains open on the agenda – how the manager of the company, who was officially fired back in November 2021, against the will of the shareholders, city authorities and residents, essentially takes and continues to manage a strategic asset and do whatever he sees fit. Where are the law enforcement agencies looking while Rostovites are content with low-quality water from an almost collapsed water canal?
