Part 3. Not «Wagner Group» but Prigozhin’s army
The seamy side of Prigozhin’s empire: how formally unrelated companies take loans from each other; why they are doing this; what Prigozhin’s structures procure and how it’s used in African countries. Joint investigation of Current Time and «Municipal scanner».
SBU VERSUS THE CHEF
During his latest «Large press-conference», Russian president Vladimir Putin answer a question about a possible involvement of Wagner Group in the deaths of three Russian journalists in the CAR.
«If they [Wagner Group] aren’t breaking any laws, they have the right to pursue their business interests anywhere on our planet», — Putin said back then.
In the middle of November, Current Time was contacted by the people who at that time were investigating the murder of Russian journalists in the CAR. They claimed that those involved in the deaths of Jemal, Rastorguev and Radchenkov may now be on the territory controlled by the DPR or the LPR.
CT contacted its sources on the territories beyond Kiev’s control, but the search brought no results. At the same time, the editorial staff asked the Igor Guskov, Chief of Staff of the SBU, if they have any information about possible participation of Ukrainian citizens living in Donbass in any missions to Africa. The SBU could not provide such information.
Instead, the security service provided CT with two sets of documents. The first one, according to the SBU, is the list of transactions between several companies and their counterparties.
The second set of documents, which we will talk about in the next chapter, is related to the activites of the «M-Finance» company. It contains manning tables of military units and information about payroll and bonus accounting.
«THE SITUATION BECAME PERVERTED»
As we said earlier, SBU provided CT with a set of accounting documents of «M Invest», «M-Finance», «Megaline» and other companies related to Yevgeny Prigozhin. Payments were made both in favor of the structures of Prigozhin’s empire and to the accounts of third-party contractors. To confirm the genuineness of these documents, editorial staff contacted various trade confirmation organizations.
The difference between «M-Finance» and «M Invest»
It’s easy to get confused when studying the structures related to Prigozhin due to their similar names. Earlier, we frequently mentioned the «M-Finance» company. It was registered in August 2015 and since then has been repeatedly mentioned in connection with Donbass and Syria. In February 2017, a new organization was created. It received the name «M Invest», andб as chance would have it, it constantly deals with «M-Finance».
In four cases, CT managed to obtain direct proofs from contractors unrelated to Prigozhin’s empire, another three deals can be confirmed with public records. In one case, editorial staff received confirmation that Prigozhin himself spoke to the contractor on behalf of «M Invest».
Rescue plan for Sudan
In August and October 2018, «M Invest» placed orders for two analytical companies: one of them received 14.6 million rubles for «strategizing the development of the Republic of the Sudan», and the other got 9.6 million for writing a «reform program for the banking and finance sector of Sudan»
Interlocutor at one of these companies agreed to speak to CT on condition that the name of his company will not be mentioned in the article. «We don’t want to be involved in this story», — he explained.
«In principle, we haven’t done anything unethical. But then, the situation became perverted, — he said without explaining what happened. — That was one of the reasons why we stopped working with them».
«They [the clients] were “M Invest”», — said the source. When asked about his contacts with Yevgeny Prigozhin, he said: «We spoke to him personally. We also spoke to his clerks, but we don’t know any names other than his».
The search for diamonds and gold
While «M Invest» was ordering a rescue plan for Sudan, its sister company «M-Finance» was paying for the services of «North-West Geological and Geophysical company «Geocomplex». According to the extracts, those services cost 1.8 and 2.4 million rubles respectively.
«Geocomplex» specialists don’t hide the factthey work in Africa. On contrary, they advertise it on their website. Here’s a description of a fulfilled orders: search for alluvial diamonds in the CAR and interpretation of satellite imagery on five plots, also in the CAR.
At the time of his conversation with CT, company director Alexander Kuzovenkov was in Madagascar. He confirmed that he fulfilled orders for «M-Finance», their costs and dates of works held matched those listed in the extracts.
«This was a very small contract, we were required to evaluate an area, and we evaluated it. The area was unpromising. It was during the inter-season, there were very few offers in Russia», — Kuzovenkov told.
According to Kuzovenkov, the geologists haven’t worked with «M-Finance» after that. He said that several similar companies operate in the region. Africa is of interest, because not all competitors have personnel that can and wants to work in the local conditions.
According to the documents, in summer 2018 «M-Finance» actually used the services of one of «Geocomplex»’s competitors: that time, research works that cost a total of 10.8 million rubles were done by OAO «VNIIZarubezhgeologiya» (subsidiary of Rosgeologiya).
«M Invest» made payments to a Chinese and a South African company that produce diamond-mining and boring equipment. In February, a company called «Broker Expert» signed a contract with a similar Scandinavian company. An anonymous source there confirmed the fact they supplied boring machines, as well as the month and amount of the transaction.
A working chain
«Broker Expert» isn’t related to Prigozhin’s main empire through nominees or owner, but, according to the «Contour-Focus» service, this company has the same phone number as the companies owned by Prigozhin family — «Concord management and consulting» and «Lachta Park Premium».
In January 2018, «M-Finance» purchased a Mi-8T helicopter with the aircraft number RA-06114 from the «Aviaservis» company, and in February, «M Invest» transferred 54 million rubles to the same «Aviaservis» for a Mi-8T helicopter with the aircraft number RA-25302 and paid for its removal from the registry. CT could not reach the representatives of this company: they haven’t been answering calls on the contact numbers for several weeks.
The information from our source about the purchase of RA-06114 helicopter is confirmed by the invoice and letter from «M-Finance» to the Federal Service for Military and Technical Co-Operation. with the request to allow the transfer of this aircraft to the Sudanese company Meroe Gold. Both documents were provided by the «Dossier» center.
Last spring or summer, a Mi-8 with the same aircraft number appeared in a propaganda movie. One of the operators of this movie was Kirill Romanovskiy, employee of RIA «FAN» (more on this movie — I the fourth part of the investigation).
In late January 2019, Security Service of Ukraine posted a statement by its head Vasily Gritsak on its website. It claims that members of Wagner Company participated in the suppression of protests in Sudan. SBU also claims that Russian mercenaries were brought to Africa by planes belonging to the Ministry of Defense.
«According to the Agreement № В218/04/119 from 30.07.2018 (total amount 56 million rubles) between the aforementioned «M Invest» and «223rd Flight Unit» of the Russian MoD, within five months in 2018 Tu-154M planes (aircraft numbers RA-85041 and RA-85155) have made eight flights from Moscow (through the Russian Hmeymim air base in Latakia, Syria) to the Sudanese capital Khartoum», — says the SBU statement.
Security Service of Ukraine refused to provide CT with a copy of the agreement but agreed to forward information about transactions from the «M Invest» account to the account of 223rd Flight Unit Chief accountant of the 223rd Flight Unit told CT that his organization doesn’t provide any private charter services.
Later, when CT obtained information about the payments from «M Invest», the chief accountant said that this issue is beyond his scope and suggested to contact the head of the Flight Unit. During a phone conversation with the flight management service , they refused to answer any questions citing commercial confidentiality. They didn’t respond to the written inquiry either.
Judging by the data available to CT, «M Invest» regularly pays the 223rd Flight Unit for «passenger charter services». Just from August till December 2018, «M Invest» has made seven transfers in a total amount of over 50 million rubles.
Another 2.2 million were paid by «M-Finance» to OOO «Charter Green Light Moscow» for cargo shipping by plane. The same company also received a payment from «M Invest» for the organization of a charter flight. In May 2018, «M Invest» and «M-Finance» made an advance payment for the lease of an An-26 plane. «Broker Expert» ordered a cargo flight by Il-76 from «Charter Green Light», which cost 11.9 million rubles. Company representatives refused to speak to CT and suggested to send a written inquiry. Two weeks later, there still was no answer to it.
«M Invest» purchased an aircraft (its name isn’t mentioned in the invoice) for 8 million rubles from the head of «Gostilitsy» airfield near Saint Petersburg Vladimir Artikulny (another company of his conducted scheduled maintenance for a Cessna RA-67717). When called and asked about this deal, Articulny hung up. All further calls ended the same way.
In October 2018, «M-Finance» purchased from OOO «Sherp» an all-terrain amphibious vehicle by the same name. Very soon, this rare vehicle was caught on camera in Africa: first, Jane’s Defence Weekly regional editor Jeremy Binnie posted a photo of it in his Twitter, and then the picture featured in the report by the UN Security Council Panel of Experts on the CAR.
In a conversation ith CT, one of «Sherp» employees who asked not to mention his name confirmed that one of such vehicles was indeed sold to «M-Finance» in the autumn of 2018. He named the number and amount of the agreement.
The purchase of this vehicle can be easily explained: most of the roads in the CAR are unsurfaced, regions aren’t even connected by tracks. Before the purchase of the all-terrain vehicle, high-mobility «Ural» trucks were used in an attempt to solve this problem.
In March 2018, «Broker Expert» paid over 44 million rubles for «Urals» model 432007-0111-31. In April 2018, Conflict Intelligence Team experts recognized «Urals» from the 4320 line in desert camouflage and with bulletproof windows purchased by «Broker Expert» on the photos taken in Sudan and the CAR. Three such «Urals» can be seen in the propaganda film made by a RIA «FAN» employee.
BOTH A BORROWER AND A LENDER BE
Upon confirming the authenticity of the accounting documents, CT studied other connections in this data array. Another consistent pattern was discovered, which confirms the affiliation of several of Yevgeny Prigozhin’s companies. The aforementioned companies «M-Finance», «M Invest», «Concord management and finance», «Credo», «”Concord” Combinate» «Concord M», «Business project», «Megaline», «Service K», «Broker Expert», previously unknown companies «Lizene» (the company that’s building the «courts quarter» in Saint Petersburg») and «InvestGlobalGroup» and the «New technologies SPA» company owned by Lyubov Prigozhina systematically sent each other money under interest bearing loan agreements.
Here are some examples:
- January 2018: «Broker Expert» returned a loan to «Concord management and consulting», 4.5 million rubles.
- February-August 2018: «M Invest» made 27 transfers in a total amount of 489 million rubles to «Broker Expert» under a loan agreement.
- March 2018: «M-Finance» made loan repayments in a total amount of 31.1 million rubles to «Megaline».
- April-September 2018: «Broker-Expert» made 19 payments to «M-Finance» under the interest bearing loan agreement and several more similar payments in favor of «M Invest».
- September 2018: «Concord management and consulting» received a loan repayment of 71.3 million rubles from «New technologies SPA», a 35 million ruble one from «Credo» and a 13.5 million ruble one from «Business project», as well as 54 million rubles of dividends from «Combinat pitaniya “Concord”».
- October 2018: Previously unknown OOO «InvestGlobalGroup» owned by Olga Starkova and Alexander Markov transferred 7.4 million rubles to «M-Finance» under a loan agreement. «InvestGlobalGroup» is registered in Saint Petersburg at Vatutina, 18A. It lists «diamond mining» as its line of business.
Not only Russian companies participate in the loan scheme. One of the companies of Prigozhin’s empire. «InvestGlobalGroup», regularly receives loan from a Hong Kong company called Zhe Jiang Jiayi Small Commodities Trade Company. This company belongs to another Hong Kong offshore company, Shine Dragon Group.
The latter frequently sends money to «M Invest», which operates in Sudan — CT has discovered 40 transfers in a total amount of $3.6 million. All attempt to contact the owner of both companies were unsuccessful.
Anti-Corruption Foundation lawyer Lyubov Sobol saw the same picture in 2017, when she received a detailed list of fund transfers by «Megaline» due to a mistake of a Federal Anti-Monopoly Service official.
«There are tens of companies that are financially interconnected throu a system of interest bearing loan agreements. Over 40 of them are Prigozhin’s companies, and six are structures of the Russian Ministry of Defense The goal of some of the credit postings was to transfer money from one of Prigozhin’s companies to another and later use it as tender securities. «Concord management and consulting» transferred money to the account of «Megaline», which later used it as securities for its own tender bids, as well as the bids by other companies controlled by Prigozhin», — the investigation claimed.
Back then, apart from Prigozhin’s official «Concord management and consulting», loan transfers through «Megaline»’s account also featured «ASP», «NordEnergo», «Lizena», «Lakhta» and «Pishchevik».
«There is an institute of trade credit, this isn’t forbidden, but the demand for it in Russia isn’t too high. That’s why it’s practically impossible to prove anything in court. If we speak about interconnected companies, things are quite simple. If there is a flow of mostly state money, there’s a need to service these contracts, there are probably some undeclared liabilities as well — you know what I’m talking about. In such cases, the money is put from one pocket into another through trade credits. This is an indisputable evidence of a connection between the companies», — explained the source in business circles.
At least six companies related to Prigozhin, including «M-Finance», «M Invest» and «Concord management and consulting» (which is directly owned by him), have their accounts at the North-West bank of PAO «Sberbank». Two accounts of «M-Finance» know to CT are in foreign currency — dollars and euros.
The existence of a «Concord management and consulting» account at a regional branch of «Sberbank» was unintentionally confirmed by Prigozhin himself when he tried to pay a fine — a «compensation of the damage caused to Saint Petersburg as a result of an unsanctioned mass action conducted by A. Navalny on May 5, 2018». The invoice includes the additional office of the bank № 9055/01103 — the same as the one in the data array at CT’s disposal.
CT also obtained information about this payment from financial documents received from a certain source.
In response to a written inquiry, the North-West bank of PAO «Sberbank» stated that the requested information is subject to bank secrecy.
Full response of «Sberbank»
In accordance with Art. 857 of the Civil Code of the Russian Federation, the bank guarantees the secrecy of the bank account and bank deposit, as well as account transactions and client information. Information subject to bank secrecy can only be provided to the clients themselves or their representatives. It can also be provided to credit bureaus under and in accordance with the law. Such information can be provided to government bodies and officials, as well as other individuals where provided for and in accordance with the law
The information requested by the mass media is subject to bank secrecy. Its provision is regulated by special norms, in this case, the norms of the Federal Law «On Banks and Bank Operations» from 02.12.1990 №395-1 (revised on 27.12.2018), article 26. This norm regulates the amount of provided information and establishes the scope of persons that can be provided information about accounts and deposits by credit institutions and banks. Mass media are not included in the list of such persons.
Yevgeny Prigozhin is under personal sanctions by the USA. Some of his companies were included in the sanctions list, including «Concord management and consulting», which is serviced by «Sberbank».
In the next part of the investigation, you will learn: who serves in the CAR and Sudan on Russia’s behalf; what conflicts between Russians and local gangs look like; who recruits mercenaries and supplies them with equipment; how gold mining companies in Africa are related to companies from Saint Petersburg and Yevgeny Prigozhin.
Mikhail Maglov, Timur Olevskiy, Dmitry Treshchagin