Russian businessman detained on charges of fraud over nuclear cruiser refit

In the ZATO [closed administrative-territorial formation] of Aleksandrovsk, officers of the Murmansk Region law-enforcement agencies have detained Fedor Barashko, the director of the Zvezdochka enterprise, who was engaged in repairing military ships without a licence from Rosatom [state nuclear energy corporation] and signed a contract for repairs of the Northern Fleet's cruiser Petr Velikiy worth over R265m [about 9.4m dollars], the head of the Interior Ministry's regional directorate, Igor Batalov, said at a news conference on Monday [18 July].

The name of the company, which was engaged in repairing ships and submarines in the town of Polyarnyy of Murmansk Region, is identical to the name of the well-known ship repair enterprise based in Severodvinsk. However, the Polyarnyy outfit had nothing to do with the Severodvinsk-based enterprise. According to the investigators, its assets consisted of a workshop and a garage.

This did not prevent the company's director from signing a contract with the Northern Fleet for repairs of the missile cruiser Petr Velikiy and a nuclear submarine.

"For its work, the ZAO [closed-type joint-stock company] received an impressive amount, over R265.3m. During a search, the entrepreneur was found in possession of some of the money, namely over R60m in cash," Batalov said.

However, according to him, the law-enforcement agencies had taken interest in the case not because of the amount of the contract but because the outfit had been working on nuclear facilities without a licence from Rosatom.

According to a resolution of the Russian government, only an enterprise that has obtained such a document through the appropriate procedure has the right to carry out repairs of high-risk strategic assets, which certainly include nuclear-powered vessels. In this case, however, repairs of nuclear units was carried out by a company under the guise of a well-known brand, whose methods of work had not been checked by specialists of the nuclear energy sector.

As a result, criminal cases have been launched against the director of the ZAO under [the Criminal Code] articles on "fraud on a large scale" and "illegal entrepreneurship". "The case is legally sound and the police believe that those guilty will be punished to the full extent [of the law]," Batalov said.

Source: RIA Novosti news agency, Moscow, in Russian 1552 gmt 18 Jul 11