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Defense minister orders to prepare legal actions to cancel several military property sale contracts

December 06, 2012, 17:01 UTC+3

The main military investigation department opened seven criminal cases over fraud involving 14 real estate facilities that belonged to the Oboronservis company

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MOSCOW, December 6 (Itar-Tass) — Defense Minister Sergei Shoigu ordered to prepare legal actions to cancel or declare null and void a number of contracts to sell military property, which were executed with violations of legislation, director of the Defense Ministry's property department Dmitry Kurakin told reporters on Thursday.D.

"Shoigu's order will apply to a number of transactions," Kurakin said.

Earlier, the main military investigation department /GVSU/ of the Investigative Committee /SK/ opened seven criminal cases over fraud involving 14 real estate facilities that belonged to the Oboronservis company subordinate to the Defense Ministry.

They were pooled in one case and are being investigated under the articles on fraud and exceeding and abusing authority.

Defense Ministry officials selected the most liquid and prestigious assets belonging to the Ministry, including Moscow-based property. As a rule, tremendous budget funds were injected into the property before it was sold at understated prices to commercial bodies affiliated with Oboronservis, the SK reported earlier.

Also, many facilities were purchased with the money stolen from Oboronservis.

The damage within the case is estimated at over four billion roubles.

The property sold at understated prices includes the 31st state-owned special construction design institute, the Soyuz hotel and the Mosvoyentorg building in Moscow, the oil terminal in the Murmansk region and a three-hectare plot in the Krasnodar Territory.

Former head of the "Expert" legal support center Yekaterina Smetanova and her husband, former director general of a Moscow Military District warehouse Maxim Zakutailo are in custody on charges of fraud.

Former director of the Defense Ministry’s property department Yevgenia Vasilyeva is under house arrest.

According to Kurakin, officials from the property relations department are cooperating with the investigators within the Oboronserivs case.

"The high-profile Oboronservis case concerns contractors, not the problems with selling military property. We're providing full, 100-percent assistance to investigative bodies. It is necessary to fight corruption with police methods. But this does not mean we should not take certain measures to improve the effectiveness of our work. I mean an evolutionary adjustment of the management system and an overhaul of human resources. We should perfect the inspection work," he said.

Central office personnel have carried out some 600 checks in the past 12 months, while regional branches of the department have carried out twice as many. "We've exposed violations; we're combating them; we're suing the violators and hope that this struggle will be effective. We're capable of creating a new reputation of the department. The role of one person cannot cast a shadow on the whole agency," the official said.

When asked about a possible renaming of the department because of the latest scandals, Kurakin said he had never considered such an idea. "I don't know if changing the name will make any sense," he said.






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