The corporate conflict that has been developing for ten years between Togliattiazot chemical plant and its minority shareholder Uralchem has come to a new level. This time, corrupt journalists made the foreign partners of the chemical plant the "bad guys." However, the foul play, the goal of which is to ruin the prestige of the chemical plant, may boomerang on the business reputation of business in Russia in general.
"Toxic owners", "New owner — the last chance for Togliattiazot" — headlines like these appear on news publications with ever increasing frequency. In addition to commonplace attacks on former managers of the chemical plant, foreign companies that enjoy strong international reputation that has not been questioned before, now appear in those articles too, The Sobesednik newspaper wrote.
For example, one of the leading engineering companies, Casale Project a. s, that builds the new urea production unit at the chemical plant, was accused of the shortage of qualified specialists. A member of the prestigious S&P 400 list, the US-based KBR, Inc., as journalists claim, took part in the withdrawal of the funds of the plant "under the guise of an audit contract."
Turkish company Tarsu was defamed as well. "Investigators" made the company play the main role in another asset loss scam that they invented. Another example of the lack of journalistic integrity relates to reports about British company Ernst & Young, one of the four leading auditing companies of the world, that was said assisting in allegedly withdrawing Togliattiazot's assets abroad using freight and ship operation services.
The partnerships that Togliattiazot had with all those companies rather testifies to the complete transparency of its transactions, high business reputation of the chemical plant and the complete crisis of ideas on the part to those individuals who ordered the above-mentioned materials. To crown it all, it is worth considering that as they trigger such a campaign in the media, the raiders, for their own selfish purposes, damage the reputation of foreign companies. This, in turn, may negatively affect the investment appeal of Russian businesses and the state on the whole.
According to observers, Uralchem, owned by Russian oligarch Dmitry Mazepin, could be a potential initiator of the publications that discredit the Togliattiazot administration. Over the last years, the company initiated a number of legal cases against the plant and achieved certain progress at this point, having passed through a court in Togliatti a claim worth 87 billion rubles that had been allegedly embezzled by the former administration of the chemical plant. This eventually led to the bankruptcy of TOMET Company that did not hold any obligations directly to Uralchem going into administration and resulted in several other, not so obvious decisions.
Meanwhile, unlike Russian courts, foreign jurisdictions consistently confirm the righteousness of Togliattiazot. In particular, the High Court of Ireland blocked the recovery of shares of the plant by Uralchem within the scope of the verdicts that had been brought down in Russia. Togliattiazot clearly looks better than its long-term opponent even from the point of view of financial transparency. Thus, the plant successfully attracted loans from Switzerland's Commerzbank AG and Germany's Landesbank Baden-Wuerttemberg, having successfully passed the familiarstrictest audit. At the same time, Uralchem prefers to raise loans in Russian state-run banks, where the lobbying capacity of Mr. Mazepin apparently means a lot more than dull financial statements.
It is worthy of note that Uralchem has found itself in a very difficult situation when it comes to accounting reports. As of the beginning of this year, the company's debt amounted to 493.9 billion rubles. One may get an idea of what is happening in the company from the state of affairs inside its division — Uralkali: due to the rapid growth of the debt, the company neared the threat of default in spring. In August, Sberbank, one of the main creditors of Uralchem, ordered an audit of Dmitry Mazepin's companies.
The above-mentioned events explain the desire of the oligarch to get the most out of Togliattiazot as soon as possible. However, is it worth it to cast a shadow on the reputation of respectable foreign companies and stain the investment climate on a national scale? This is highly questionable.
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