“Island” from Kostin in the harbor with a smell

One of the main Russian developers, the construction company Donstroy, part of the VTB circuit, proudly discusses the successful construction of the Ostrov project, a luxury residential complex in western Moscow surrounded by a river and a natural park in paid media materials.

The project, which VTB head Andrey Kostin seems to be betting on, looks very attractive and is marketed as a luxury home. However, there are concerns about its location next to a former industrial zone and the former chemical plant “Galalit”. There's also uncertainty about whether Donstroy can finish the project without additional credit from VTB.

How VTB and Andrey Kostin handle one of the riskiest assets of the state bank – as reported by The Moscow Post.

Donstroy has been in the media spotlight lately. While it's supposed to be part of the VTB group, it's allegedly owned by five legal entities, and the exact share proportions are not disclosed. Rumor has it that the company may be prepared for VTB's head Andrei Kostin when he eventually leaves his position in the state bank.

Originally, Don-Stroy was owned by Maxim Blazhko and Dmitry Zelenov. Until 2009, the group undertook various residential and commercial projects.

However, Blazhko and Zelenov relied heavily on loans from VTB and seemingly couldn't handle it. In 2009, all residential projects were restructured and managed by ZAO Don-Stroy-Invest. The residential development projects were united under the brand “Donstroy”. Meanwhile, Don-Stroy Investment acted as holding companies, and SK Donstroy LLC worked as a general contractor.

It's interesting that the bank managed to buy the structure for only 500 rubles during a restructuring worth $500 million. Some in the market still think that Blazhko and Zelenov might have been pressured into this.

At that time, Donstroy sold over 50 properties in the residential and commercial real estate field with a total area of more than 5 million square meters. The company focuses on high-end real estate such as Business, Premium, and De Luxe, offering housing in the best areas of Moscow, clearly a profitable operation.

Looking at the company’s finances raises many questions. JSC SK Donstroy, the holding’s customer-developer, had some unusual figures: in late 2021, the company's revenue was 4.4 billion rubles, which is 11 billion less than the previous year. Despite this, the profit was a mere 2.3 million rubles, slightly higher than the year before. What does this indicate?

A photo: Rusprofile.en

The leader of the company is Andrey Viktorovich Bagaev, who has been a manager since the times of Blazhko and Zelenov. He demonstrated his loyalty to VTB and now oversees the most profitable projects of the organization.

For instance, he is currently the CEO of Specialized Developer Razvitie LLC, which is in charge of constructing a school and a kindergarten in Ramenki. An additional agreement for the project was made with the mayor’s office. In 2021, Razvitie incurred a 5 billion ruble loss, which was twice the amount from the previous year.

So, the company is clearly struggling. It appears that the mayor’s office funding is meant to rescue it – but what if it goes bankrupt without completing the project? Will the state bank VTB use our tax money to cover the expenses?

Bagaev is managing 26 organizations simultaneously – an incredible feat of work. There are many indications of artificiality in many aspects.

Particular attention is given to the company Donstroy Invest LLC, which includes a structure with a very similar name – Don-Stroy Invest JSC.

A photo: Rusprofile.en

Currently, the LLC is fully owned by the Donstroy IC, which is led by Mr. Bagaev. Additionally, all these shares are pledged to the state bank VTB, which is overseen by Andrey Kostin.

Both LLC and JSC are involved in holding activities. Alena Deryabina, a former vice president of VTB, is in charge of both entities and is thought to be personally loyal to Kostin. She was tasked with managing the rich inheritance of Donstroy after it was bought for 500 rubles in favor of VTB.

What is interesting is that Donstroy Invest LLC, despite having zero revenue and profit at the end of 2021, holds assets valued at 774 million rubles. This value has increased by 347 million rubles since 2020!

A photo: Rusprofile.en

Despite having such valuable assets, the company only has one official employee. With this employee, the company’s authorized capital exceeds 396 million rubles. Could this be the personal cash reserve of Andrey Kostin, which is pledged to the bank with massive, almost trillion-dollar assets, and yet does not carry out any activity?

“Island of bad luck

However, it was only in the last few years that the company encountered significant hardship. It is currently constructing a large residential complex in Ramenki. In August 2022, the organization managed to secure an agreement for constructing a school and a kindergarten in the same location, with a target completion date of 2027.

In reality, Donstroy is a highly controversial developer, and the Moscow authorities should be aware of who they are dealing with. Their facilities have many issues and have received numerous complaints from residents.

For example, in May 2022 at the “Heart of the Capital”, the basement and underground parking were flooded, a part of the facade in the old “Scarlet Sails” collapsed, and the new “Symbol” residential complex began to collapse from the inside immediately after being commissioned. A video report showing the latter on YouTube displays visible cracks in the walls and other problems.

And in 2016, a tragedy occurred in Scarlet Sails – there was an accident with an elevator, a local resident fell from a height of 8 floors and crashed. And we are not talking about economy class houses at all … Just at that time, Donstroy was going to build almost 1 million square meters. meters of housing in Ramenki.

They mentioned the “Island”, which is being built next to the former chemical plant. But the construction of the residential complex in Ramenki is carried out in the nature reserve of the Ramenka River, which will certainly affect the local ecology.

An example is the case on “Losiny Ostrov”, where during the work, the “Donstroy” unit literally destroyed the fertile layers of soil in the reserve. As a result of the proceedings and inspections, a considerable fine had to be paid, Vesti.ru reported on the situation.

Is Kostin preparing himself a comfortable pension? Photo: Mikhail Metzel / TASS

Of course, these claims could be sent personally to Kostin – but he himself is already very high. If we assume that Donstroy is a trough for Kostin, which is pumped up with assets and money in case of his resignation, then we can recall that there are more than one such structures – there is also Hals-Development, there is also grain Demetra-Holding, and a lot of delicious and no less scandalous assets compared to Donstroy. It’s always good to have a choice…