Dark Side
Billions of Sabadash for sale
By Crime Russia 8/3/19
Mar 10, 2019 - 12:46:52 PM

Another disgraced oligarch loses his assets. Following the pursued by state Dmitry Mikhalchenko, another large St. Petersburg businessman loses his assets and wealth. The main assets of the "vodka king" Alexander Sabadash are put up for auction. The collapse of this businessman, like Dmitry Mikhalchenko, is also associated with the highest political will.

Empire Auction

The business empire of former senator Alexander Sabadash is in a state of collapse. A few days ago, official bidding for assets of the oligarch was announced. Such powerful giants of St. Petersburg timber industry complex as VLK (Vyborg Forest Industry Corporation), VPK (Vsevolozhskaya Industrial Corporation), Liviz Distillery, as well as all factory workshops, machinery and equipment are included in the bankruptcy estate. Assets are sold at a large discount, which causes a certain hype. This auction has already been called the largest in recent years in the Leningrad region. As business publications write, VLK is sold for 4.3 billion rubles ($65 mln), the military industrial complex for 2.8 billion ($42 mln). The starting price of the Liviz plant is not yet known.

All this happened because Smolninsky District Court of St. Petersburg in 2017 sentenced Alexander Sabadash to 7 years in prison for embezzling 190 million rubles ($3 mln) from the Tavrichesky Bank. But this is the second criminal prosecution of a businessman in recent years. He received 6 years for attempted fraud at the first sentence in 2015. Thus, the court appointed him 8 years and 6 months of imprisonment for a combination of crimes. And although the defense of the former senator was counting on parole in a year, in August 2018 there was no miracle. He failed to return to freedom, albeit conditional, and to keep his business from collapse. The result is visible now. The oligarch actually lost his assets. 

Alexander Sabadash is well established in the history of St. Petersburg business as a successful entrepreneur. In the 90s he began his career as a major supplier of vodka Absolut. Then, in 1997, he opened his plant Liviz, the products of which quickly gained a leading position in the market of alcoholic beverages. The personal fortune of the businessman was estimated at 10 billion rubles. In the early 2000s, the billionaire went into politics. From 2003 to 2006, he served as senator from the Nenets Autonomous District.

Now large business corporations can’t wait for April 11 – this is the date of the auction for the Vyborg Timber Corporation. This is the only company in Russia that specializes in the production of environmentally friendly biofuels. According to sources of The CrimeRussia, Sabadash, to the last, tried to maintain control over the situation, but the alignment of forces was not in his favor. The flagship of his empire, Vyborg Timber Corporation, was declared bankrupt. In the past, in 2018, the company introduced a competitive management procedure. The company's debts amounted to 14.6 billion rubles ($220 mln). Initially, the company was estimated at 7 billion ($105 mln), but as we see, it will go for a penny from the hammer. This, as they say, was greatly facilitated by Sabadash’s main enemy and competitor in the field of the timber industry complex Ilim Pulp Enterprise, whose beneficiaries include billionaires Zingarevich brothers.

At the auction there are 2681 units of fixed assets and inventory items. Among them there is a complex of buildings and a site in the village of Sovetsky, a park of 20-foot containers, bridge cranes, automobiles, cargo tractors and semi-trailers, office equipment, etc.

Criminal way

The great rise and fall – this is how Alexander Sabadash’s life is described today. Sources say that the overthrow of the powerful is done for the same reasons as of oligarch Dmitry Mikhalchenko. He crossed the road to high political will. If the latter is accused of alleged or actual embezzlement from the construction site of the president’s residence, Sabadash at one time allegedly could have contributed to the impoverishment of the head of state. He is charged with a raider attack on the Novo-Ogaryovo land near Moscow, where the residence was located, where, according to the investigation, the head of the Forum holding heated his hands. It is no secret that in 2008, in one of the courts near Moscow, a similar, unprecedented lawsuit was considered, in case of sustainment of which Putin (then Prime Minister) could have lost territories of 197.57 ha.

As the media wrote later, a member of the Federation Council, Leonid Lebedev, and a businessman, Andrey Bokarev, were the initiators of the withdrawal of land from Putin along with Alexander Sabadash. The official authorities came to a halt on time, and a ban was imposed on all transactions with the escheated state land. Further, the investigating authorities opened a criminal case on the fact of fraud by a group of persons in preliminary agreement with the property of the State Healthcare Institution Tetkovo of the Presidential Administration of the Russian Federation.

Former Senator Leonid Lebedev

But the state did not begin to pursue the billionaire at all in those years, but after 8 years. The reason was the story of illegal VAT refunds. In 2015, Alexander Sabadash was sentenced to 6 years in prison for attempting to steal 1.87 billion rubles ($28 mln). The company EC-Kontraktstroy, controlled by the billionaire, in 2010 submitted documents to the tax inspectorate demanding the return of the value-added tax, in view of the fact that the company had modernized the Vyborg Pulp plant. An inspection of the fiscal authorities found that there was no modernization, and the state machine started working. However, for knowledgeable people it was just a hint of more complex circumstances. After all, for such trifles as the return of VAT, which was used even by the lazy ones, billionaires are not usually imprisoned.

The crusade of law enforcement agencies did not begin because of the senator’s real or imaginary sins, but after the “honorable” resignation of the 4th Administrator of the President, Vladimir Kozhin. The latter was considered a friend and patron of the businessman.

Vladimir Kozhin

However, Sabadash already had enough “friends” with connections. The entrepreneur, sharp by nature, did not hesitate in open conflict. His confrontation with the owner of the largest vodka holding Russian Standard, Rustam Tariko, lasted for more than 10 years. Then for several years he had legal proceedings with the ex-head of Rosspirtprom, Sergey Zivenko, for the right to the Gzhelka vodka trademark.

Today, nothing is heard about his detractors, but the debts on loans came to a total of 17, 4 billion rubles ($262 mln). However, some sources believe that the sale of the Sabadash empire is worth something more than fraud with the return of value added tax.

Namely politics. It was no secret that the oligarch was a fierce fan of the opposition. At one time, he sponsored the St. Petersburg branch of the opposition organization Oborona (Defense), which included representatives of Yabloko party and the Union of Right Forces and the Going Without Putin movement. For example, the far left Oborona became famous for arranging mass actions against Valentina Matvienko, on one of which the protesters burned Vladimir Putin's effigy. According to sources, the former senator still had chances to reach parole at the end of the summer of 2018. But the failure has nothing to do with the competence of his legal representatives, but with political will. An opposition billionaire who is at large on the eve of important elections in the city is not the best architectural decoration of the Northern capital. Therefore, the billionaire will remain in the colony, and billions of assets will leave the auction. 

Dmitry Mikhalchenko

However, the story of the fall of Sabadash is very similar to the story of the fall of Dmitry Mikhalchenko. Both were accused of embezzlement at the Novo-Ogaryovo residence, both created large enterprises, and both lost all their assets. Mikhalchenko was charged with creating an OCG, Sabadash was charged with organizing an OCG. What is remarkable, in both cases, criminal groups, according to the investigators, were founded to “steal money from the country's budget.” Some believe that the point here is not about personal sins and their unsightly entrepreneurial methods, but rather that both of them were in the way of the political colossus. As practice shows, no business survives near it.