The “Siberian Business Union” Holding Company” JSco (SBU, or in russian "SDS") – a holding which owns coal assets accumulated in the “SBU-Coal” JSco HC (JSC HC «SDS-Ugol») among other assets – is one of the largest coal producer and exporter. In 2020 the company produced 29,2 mln. tons making 7% of the summed up volume of coal production in Russia that makes 402,1 mln. tons. In 2016 the “SBU” holding started selling out its assets. This step was forced by a complicated financial situation. Debts of the company amounted to $1,5bln. Accumulation of debts had been conditioned by the world price fall for coal, which started in 2011. In 2017 coal assets active selling started; the SBU sold the “Sibenergougol” to the Swiss Sib Coal AD, a year later the Kiselevsk open-pit-mining and Prokopievsk open-pit-mining were purchased by Constantine Strukov, owner of the “Yujhuralzolota” (the “MelTEK” company).
Owner
The sole owner of the “SBU” HC and main owner of the “SBU-Coal” (JSC HC «SDS-Ugol») is Mikhael Fediaev whose wealth amounts to $550 mln. according to the Forbes data. He owns 95% of the company. The “SBU-Coal” (JSC HC «SDS-Ugol») assets include three coal open-pit-mines, two mines, three concentration factories in the Kemerovo oblast and a number of enterprises in the field of service with total number of employees of 8000 men.
In the end of 1980-ies Fediaev, transport engineer by his background became the head of a production and construction cooperative which was founded on the base of the Kemerovo auto-transport enterprise N1 (SATE-1) and in the 1990-ies he was working on different managerial positions in local companies. One of the positions ha had occupied was the Kemerovo representation of the investment company “Mir Invest” of the future founder of the “Russian Coal” Vadim Varshavski, where Fediav met Vladimir Gridin. The started consolidation of coal enterprises, chemical industry, machine-building and transport under their control. Formally 66% of the “SBU” belonged to Gridin and his sons. However, independent information sources consider the business assets were property of Gridin and Fediaev on a parity basis.
Since 2011 when Vladimir Gridin, at the suggestion of the governor Tuleev (who had been in friendly relations with Gridin), was elected a deputy to the State Duma and the holding management actually had been carried out by Mikhail Fediaev. In 2019 the latter purchased the share of his partner.
Tax Evasion Scheme
Amount of taxes paid in 2020 by the parent company was utterly insignificant. Net loss of the enterprise, having 93 mln rubl. revenues, made up 414 mln rubl., in 2019 -145 mln rubl., in 2018 – 35 mln. rubl. Last time revenues of the “SBU” JSco (SDS). Were shown in 2015 (273 mln. rubl). Record revenues were fixed in 2013- 10,9 bln.rubl. The enterprise has the status of a small enterprise and it has 22 employees.
Situation is similar in the “SBU-Coal”JSco (JSC HC «SDS-Ugol») which has no employees at all: the net profit made up 14,5 mln. rubl in 2020; there are no data about paid taxes found.
Since 90-ies companies of Gridin and Fediaev made use of a widely spread criminal scheme for tax “optimization”. In particular, coal from the open-pit-mine “Chernigovets” was sold at a price lower than cost-price to the offshores under their control. It helped to minimize export tax and only after that coal was being realized at market prices.
Involvement in Corruption and Crime
Coal production – is one the most criminalized businesses in Russia. Beginning 90-ies organized crime groups had carried out struggle for control over enterprises of this field. Good years of the “SBU” holding registered in Kemerovo in 2004 were connected to “good relations” formed between the founder of the company, Vladimir Gridin and the governor of the Kemerovo oblast, Aman Tuleev. The latter as believed supported raider takeover of the large enterprises in the region with the help of state power structures. The first joint action of the governor and the future owners of “the SDS” happened in 1999, it was an attack on the company MIKOM, controlled by an oligarch, Mikhail Jhivillo. As a result, the “Chernogovets” open-pit-mine moved under control of the company owned by Gridin and Fediaev. M.Jhivillo being accused in an attempted murder of Tuleev had to leave Russia in 2000.
Foundation of a transport company “Novotrans”, which was given monopoly right for cargo forwarding from the territory of Kuzbass is one the proofs Gridin and Fediaev had close friendly relations. It was yet in 2004 the company was formed under a corrupt agreement.
According to the material of the criminal case N18000, started under the p.4, art.159 of the RF Criminal Code (“Large-scale fraud committed by a group of persons by prior conspiracy”), the “SDS” got hold of the “Khimmash” on the basis of forged documents. As a result of fraudulent transactions property complex of the largest chemical machine-building plant in Kuzbass was transferred to the “Kemerovochemmash” Ltd balance, which was controlled by Gridin and Fediaev. Investigation against the businessmen was halted several times under the pressure of the power in the oblast. Valeri Dogadov, head of the regional department of FSS and fediaev’s childhood friend played his role in this case.
The “Prokolievskugol” company was transferred to the “SBU” (SDS) for 1 dollar. That was the price the former owner, oligarch Vladimir Lissin sold the enterprise while the market price was tens of millions of dollars. We can guess why Lissin gave his consent to this bad deal…
For a long time, Mikhail Fediaev had been considered successor of Aman Tuleev at the post of the head of the region. With support of Tuleev one of the sons of the oligarch Fediaev is a state Duma deputy. The current governor of the Kemerovo oblast, Tsivilev is extending his support to the Fediaev’s business. For example, one of the firms in his holding “SDS-Stroi” got a contract priced 7,4 bln rubl. for designing and building a sports complex “Kuzbass-arena” with just one bidder in the auction invited!
We have to mention here that Dimitri Kuzmin, member of Federation council on behalf of the Kemerov oblast, gives preference to a Ulysse Nardin Executive Dual Time wristwatch of pink gold amounting to 24 000 dollars (approximately 2mln rubles).
Kuzmin started his career as director general of the “SDS-Energo” Ltd HC and as well as in case of the “SBU-Coal” JSco HC (JSC HC «SDS-Ugol») one hundred present of shareholder is the “Siberian Business Union” JSco KC (SDS) . As they say, the second senator from the region,Alexei Sinitsin comes from the same structure although formally it is not indicated in his biography. And, Olga Turbaba vice-governor for internal policy in the office of Sergey Tsivilev, Governor of the Kemerov oblast, is among those who are directly related to the “Siberian Business Union” JSco HC (SDS); and the current head of the “SBU-Coal” JSco HC (JSC HC «SDS-Ugol»), Gennady Alekseev is a freelance advisor to the Governor Tsivilev.
Apart of the State Duma deputy Pavel Fediaev from the “Edinnaia Rossia” party (Mikhail Fediaev’s son), one more representative was elected from the Kemerov oblast to the lower house of the Parliament - Anton Gorelkin. Gorelkin is also connected to the “Siberian Business Union” Jsco HC (SDS) through his wife Anastasia Gorelkina (maiden name Tanassjiuk) who is the manager of the largest media-holding in the Kemerovo oblast – “Kuzbass Media group” (KMG) which is part of the structure of the “Siberian Business Union”.
So, members of the “Siberian Business Union” JSco HC literary have captured power in the region and it is confirmed by observers who indicated that the beneficiaries of the “Listviajhnaia” mine where the tragedy took place are a solid footing for the local power of Kuzbass.
Violation of Technological Process
RF business specifics enable to significantly increase profitability of coal production regularly violating labor safety regulations, environmental standards and technological process. High level of corruption in the country makes it possible to evade responsibility for the damage done.
World price rise on coal in 2021 conditioned oversized exploitation of mines and open-pit-mining enterprises. As a result, we had a disaster in the “Listviajhnaia” mine (16% of the total production of coal in the “SBU-Coal” (JSC HC «SDS-Ugol»)) and 51 people were killed in the accident. It had been the largest accident in the field since 2010. According to numerous testimonies of miners, managers of the mine forced them to work under the conditions dangerous for life with high level of gas contamination in the mine. Methane concentration reached 7% in the mine while 2% is considered critical. As employees say the systems controlling gas contamination and blocking were usually disabled on purpose not to stop coal extraction rpocess. There was an additional stimulus to violate safety rules at the enterprise – it was necessary to increase production volume at the “SBU-Coal” (JSC HC «SDS-Ugol») enterprises out of necessity to cover debts of the parent company.
Andrey Vill, legal representative of the Rostekhnadzor spoke to the “Vedomosti”, that the mines were objects of the first class danger and “were controlled in the regime of permanent supervision; therefore, checks had been carried out in different sections of the mine regularly. in 2021, according to him, 127 check were carried out in the mine, 914 violations identified, the mine working process was stopped nine times. The total sum of fines made up 4 mln. rubl. as a result of checks in 2021. Noteworthy, that orders to stop mines were fulfilled just formally or were sabotaged as standing of the mines affected profitability of the enterprise.
Environmental Damage
Open-pit-mining was actually increased in the region with coming of Aman Tuleev to the power. This regime of coal extraction has huge impact on environment making vast territories of land inappropriate for living. Today two-third of the mineral fuel is extracted in open mode, the rest - in mines. In the 90-ies the proportion was opposite.
The most severe situation has formed in the town of Kiselevsk, in the outskirts of which “SBU-Coal” (JSC HC «SDS-Ugol») was extracting coal in the “Kiselevsk” open-pit-mine until selling it to the “MilTek” company. Coal dust and explosions have extreme impact on environment and health of population. Air is contaminated with coal dust, gas and a mass of dangerous matters for life, concentration of which exceeds the permitted maximum tenfold. The town Kiselevsk has become widely known all-over the world because of a phenomenon of black snow; snow obtained black color due to contaminated air with coal dust. Ground and surface waters are intoxicated with dangerous matters, heavy metals included. It is impossible to grow agricultural products – vegetables and fruits in personal gardens and land plots in the radius of several kilometers from the open-pit-mines.
According to sanitarian standards adopted in favor of miners, open-pit-mines should be located at a kilometer distance as minimum from populated points but even this minimum distance is not observed. No re-cultivation of the soil is done on the open-pit-mines’ sites as these works are costly. Because of man-made fires and empty spaces underground, there is a danger for living houses to collapse. For the last 20 years, number of population has reduced twofold. The reason of depopulation is not only forced migration from the zone of environmental disaster but a high rate of mortality, which threefold exceeds the rate of birth.
Significant violations are identified in other enterprises of the “SBU-Coal” (JSC HC «SDS-Ugol»). For example, in 2014 during a check by the “Rostechnadzor”, it was fixed that the “Maiskoe Shakhtoupravlenie” Ltd was disposing worked soil beyond the border of the designed territory and it had entailed environmental damage amounting to more than 2,8 bln. rubl however, thanks to good relations with administration of the region, mining enterprises in most cases escape responsibility for the violations identified.
In 80-ies of the previous century, realization of the plan of Kiselevsk town relocation from the unfavorable industrial zone was started but the project has never been implemented because of collapse of the USSR and subsequent privatization of coal field enterprises following it. The new owners turned to open-pit-mine mode of production and resettlement of the population was considered unprofitable for them.
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