Financing Yekaterinburg EXPO Jeopardizes State Enterprise’s Property, Prosecution Authorities Claim

26 August 2011 (09:19)

Sverdlovsk Region public prosecution authorities completed their check of whether the credit instruments of Ural Exhibition Center had been secured in a legitimate way; now the Center is the investor in the construction of Yekaterinburg EXPO, an international exhibition center, at the expense of Sverdlovskaya poultry factory, a state-run enterprise.

It has been determined that the finances for the international exhibition center Yekaterinburg EXPO came from both Ural Exhibition Center’s own funds and the borrowed ones (provided through a loan from Sberbank). The loan payoff was backed up by a guarantee from Sverdlovskaya poultry factory, to which Sverdlovsk Region Ministry for State Property Management had agreed earlier. Therefore in case Sberbank did not get its loan back, the money could be obtained from the guarantor, the factory.

The law allows state-run unitary enterprises to act as guarantors only when this is in compliance with the enterprise’s charter purposes and is stated in the charter. The charter of Sverdlovskaya poultry factory does not state the possibility of such transactions. Thus the Ministry for State Property Management gave its agreement to the guarantor’s contract illegitimately,’ the prosecution authorities claim.

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