As per some news sources, supported by experts from the Unified Resource of Developers database in Russia, Donstroy, a Moscow development holding, was ranked sixth in Russia for housing under construction as of March 1. In Moscow, the holding secured second place in this aspect.
To confirm this, Donstroy is actively promoting its properties and has increased sales of both completed square meters and those scheduled for delivery in the upcoming years.
However, the positive image contrasts sharply with reality. This could seriously affect inexperienced buyers looking to protect their money from potential devaluation by investing in Donstroy real estate. Not only money invested in ongoing construction projects is at risk, but also in completed properties. It may sound unbelievable, but it's true in the case of Donstroy.
The issue is that Donstroy faces several problems, each of which, on its own, does not pose a threat of collapse to the developer. However, collectively, they appeared menacing a month ago. With the level of support and owners that Donstroy has, these problems were addressed. However, the situation has changed drastically in recent days, and not for the better. The reasons for this change can be easily guessed. The article will explain why all of this has negatively impacted Donstroy.
Despite the high volume of ongoing construction activities – the developer is constructing 1.1 million square meters in the capital – Donstroy encountered numerous issues at the end of last year. It's important to note that “Donstroy” is not a single legal entity. Over the years, it has evolved into a holding company, comprising dozens of interconnected companies. These companies have diverse relationships, even involving lawsuits, but it's crucial to recognize that they all share the same owners.
Donstroy's Beneficiaries
The story about the owners is quite intriguing because, despite the various registers where Donstroy’s structures are registered, the information about its ultimate owners is kept confidential. According to Alena Deryabina, the CEO of the holding, Donstroy is owned by five legal entities. However, she has long refused to disclose the owners of these legal entities or even the names of the companies that own Donstroy. This data is deliberately concealed in state registries.
Nevertheless, leaked information revealed that some high-ranking government officials are connected to Donstroy. They are concealed under the umbrella of a closed-end mutual investment fund called Moscow Real Estate. Although the fund is closed, certain logical connections exist between individuals from top authorities and companies within the Donstroy holding.
Alena Deryabina is the general director of Donstroy since 2010, when VTB bought it for debts. She used to work as a vice president in a bank.
The decision to buy Donstroy's $500 million debt for just 500 rubles was made by Andrey Kostin, the head of the bank's board. Right after that, Deryabina became the head of Donstroy and the owners changed, but VTB Bank was not included.
The former Deputy Prime Minister Igor Shuvalov and his wife Olga are mentioned as beneficiaries of Donstroy. There is a connection between the intermediate owners of Donstroy and firms affiliated with the Shuvalovs.
There are links to the famous Rotenberg brothers through Roman Gromozdov, who has joint projects with the Rotenbergs. There is also a connection between Gromozdov and Kostin’s deputy for VTB, Andrei Puchkov.
Igor Sechin, the head of Rosneft, was linked to the ownership of Donstroy through the KL Development company. The official owner of Donstroy is Special Construction Company Otdelfinstroy and Partners LLC, which is owned by two legal entities – LLC SZ Otdelfinstroy and JSC SZ KSK Group.
German Gref, the head of Sberbank, may also be involved in Donstroy, as the holding had an overdue loan to Sberbank. They repaid the loan by selling one of the holding’s structures, DS Development LLC, to the bank for a symbolic amount.
There are differing opinions about the other beneficiaries, with some experts naming the head of Roskosmos, Dmitry Rogozin, and several other influential top officials. However, this might simply be due to their involvement in scandals related to Donstroy.
Scandals and state corporations
Donstroy has been involved in many scandals, including the ownership of land in Moscow that was previously part of Roskosmos and controlled by the Center for the Operation of Ground-Based Space Infrastructure Objects (TsENKI).
But in 2019, it suddenly became known that Specialized Developer Makeeva LLC, which was established by Don-Stroy Invest, was registered at 7 Sergey Makeev Street. And FSUE Motor, which was also registered at the same address, was closed down.
After the scandal was reported in the media, the project was put on hold, and SZ Makeeva LLC was re-registered at a different location – Mosfilmovskaya Street, house 70, underground floor, room 106. The company tried to remove all references to the previous address and the announcement of apartment sales in the planned residential complex at Sergey Makeev Street, 7. However, the so-called “mirrors” of the websites and the order for the assessment of a 4.8-hectare site at this address remained.
We can assume that this is where the rumors about Rogozin’s involvement in the ownership of Donstroy originated.
Another scandal involves straightforward bribery and fraud in connecting power grids. According to the VChK-OGPU telegram channel, a organized group of former security officials headed by Andrey Khorev, ex-deputy head of the DEB of the Ministry of Internal Affairs of the Russian Federation, regularly receives large sums from Donstroy to resolve issues when connecting construction projects to the heating system. The amounts mentioned are in the tens and hundreds of millions of rubles.
Discharged from the Ministry of Internal Affairs of the Russian Federation due to corruption scandals, the former security officials found profitable positions in the heat supply sector in Moscow, taking key roles in heat supply organizations under the patronage of the Rotenbergs. This group deliberately creates obstacles for developers when connecting to heating systems and, for a certain bribe, resolves the issue.
Within Donstroy, the group has a connection with one of the directors, Andrei Bagaev, a former employee of the Ministry of Internal Affairs, who has direct access to the holding’s general director, Deryabina. Bagaev is the one who persuades Deryabina to pay Khorev to solve problems. By the way, Khorev's name came up in connection with the case of another notorious individual – Colonel Zakharchenko, in whose apartment billions of rubles were found during a search.
Talking about scandals, it's worth mentioning the “House on Mosfilmovskaya”, where, after an inspection, nine extra floors were discovered. This happened in 2009, but an interesting detail is that initially the Urban Planning and Land Commission under the Government of Moscow ordered the demolition of the additional floors, but soon reversed its decision. The cancellation coincided with the change of owners of Donstroy – at that time, VTB and Sberbank bought the holding's debts and changed beneficiaries.
Another scandal is linked to a fatal incident – in 2016, an elevator malfunctioned in the Scarlet Sails residential complex, resulting in the death of a resident. Additionally, in December 2019, two people died as a result of a fire in the utility room.
Debts and potential bankruptcy
However, most of the aforementioned issues are in the past, but the current state of affairs at Donstroy is not optimistic. The majority of the companies within the holding have incurred significant losses. For example, at the end of 2020, IC Donstroy JSC made a profit of 117,000 rubles with a revenue of 15.2 billion rubles. Another holding company, Don-Stroy Invest JSC, generated a revenue of 22.3 billion rubles in 2020. However, the losses amounted to 6.2 billion rubles.
In addition, the holding’s structures are mired in litigation – as of the end of last year, the total amount of lawsuits brought against the developer is estimated at 160 million rubles. Among the plaintiffs, LLC “MSK Group” is named – the management company in the houses built by “Don-Stroy Invest”. Moreover, according to media reports, the courts satisfy her statements literally one after another. One of the largest lawsuits came in 2017, when the Russian Capital Bank secured about 500 million rubles from the developer.
However, against the background of all this, the behavior of VTB looks strange, which has remained one of the largest creditors of Donstroy all these years. It seems that money is simply withdrawn from the state bank through the credit line. The intermediary is the structures of Donstroy, which take virtually unsecured loans from VTB. The money is then not returned, and the collateral, which, according to the bank, should cover the loan amount with its value, turns out to be a fiction and exists only on paper.
Perhaps this is also related to court decisions that are literally stamped on one of the holding’s structures – the above-mentioned Don-Stroy Invest. Recall that, judging by the tax reporting, this is a completely loss-making enterprise. Despite the fact that it has gigantic sales volumes – we cited the figures above.
In this regard, the role of the head of VTB Andrei Kostin in all this credit history cannot but be of interest. And the obvious conclusion cannot but follow – the money of the state bank is simply withdrawn through loans from the Donstroy holding controlled by the head of VTB and float away in an unknown direction.
And in the end, those who dare to invest their rubles in Donstroy projects will suffer in the end – because sooner or later VTB will try to return the loans. And he will seize the assets of Donstroy. Since there will be no money in the holding’s accounts, all assets will go under the hammer in order to somehow compensate for the bank’s losses. And people who have invested their money in “elite” Moscow real estate will be left with worthless investment contracts.
That’s just another interesting question – and who covers Kostin from the interest of people who should stand guard over public money? He’s not doing all this alone, is he? And he is not the only beneficiary of Donstroy, as you understand.
