The agency ordered the liquidation of the utility service provider

The Office of the Federal Antimonopoly Service recognized the creation of Naberezhnye Chelny Utility Networks LLC, which supplies hot water to the city, as contrary to the law on the privatization of municipal property. The department demanded the return of the property contributed by the city to the capital of the LLC. The administration of Naberezhnye Chelny does not comment on the situation. Experts believe that challenging the findings of the Federal Antimonopoly Service in court is futile.

The OFAS for Tatarstan recognized the subsidiary structure of the executive committee of Naberezhnye Chelny - Naberezhnye Chelny Utility Systems LLC - as violating Part 1 of Art. 15 of the Federal Law “On Protection of Competition”. The supervisory department considered that the LLC was created in violation of federal law, and ordered the property contributed to its authorized capital to be returned to municipal ownership.

Naberezhnye Chelny Utility Systems LLC was created by the city executive committee in December 2009 with the aim of optimizing the activities of public utilities. Now it is the only supplier of hot water in Naberezhnye Chelny. Before this, the supply of hot water to the city was the responsibility of OJSC Tatteplosbyt. 51% of the company is owned by the executive committee of Naberezhnye Chelny, 49% by JSC Naberezhnye Chelny Grid Company. The company refused to disclose the size of its authorized capital and financial indicators. At the end of 2010, the LLC owed Tatteplosbyt 2010 million rubles.

The case against Naberezhnye Chelny Utility Systems LLC was initiated on November 3 last year on the OFAS’s own initiative. The facts that revealed violations in the activities of the executive committee of Naberezhnye Chelny became known to the department as part of another case, Ivan Shcherbakov, deputy head of the Tatarstan OFAS, explained to Kommersant. The department considered the creation of an LLC by the executive committee and the inclusion of municipal property in its authorized capital as a violation of the law “On the privatization of state and municipal property.” According to it, city authorities can participate in the creation of an OJSC or a unitary enterprise, as well as contribute municipal property to the authorized capital only at open auction. As the OFAS found out, no tenders were held during the formation of the authorized capital of Naberezhnye Chelny Utility Systems LLC.

Representatives of the Chelny executive committee and the LLC controlled by it were unable to give a clear explanation at the hearing as to how this was allowed to happen. Deputy General Director for Corporate Policy and Property Management of OJSC Tatenergo Alexey Sergeev told Kommersant that this problem emerged soon after the creation of the LLC. He noted that Tatenergo’s lawyers agreed with the position of the Federal Antimonopoly Service, but the executive committee’s lawyers were of the opinion that the privatization took place legally. “That’s why the situation could not be resolved for so long and the matter came to trial,” he explained to Kommersant. The form of ownership of Naberezhnye Chelny Utility Systems will be changed in the near future, Alexey Sergeev promised. “In any case, we will not challenge the decision of the Federal Antimonopoly Service,” he said.

A municipal entity does not have the right to participate in the creation of an LLC and contribute municipal property as a contribution to its authorized capital, lawyers confirm. “The transaction to include municipal property by the Chelny executive committee into the authorized capital of Naberezhnye Chelny Utility Systems LLC does not comply with the requirements of the Federal Law “On the Privatization of State and Municipal Property” and is void,” says Natalya Shepeleva, a specialist at the Unex legal agency. A similar case, as the expert said, was considered last year in Biysk, when the prosecutor’s office of the Altai Territory went to court and proved that the municipal institution “Financial Department of the Administration of Biysk” illegally transferred municipal property to Intelcom LLC. The case reached the Supreme Arbitration Court of Russia, and in each instance the illegality of the transaction for the alienation of municipal property into the LLC was confirmed. “So the chances of Naberezhnye Chelny Utility Systems LLC to appeal the decision of the Federal Antimonopoly Service are minimal,” sums up Natalya Shepeleva. At the same time, she believes that the problem can be easily resolved: if the LLC returns the property to the city, it does not have to change its form of ownership. “And the disputed property may return to Naberezhnye Chelny Utility Systems as leased property,” the lawyer suggested.

The Naberezhnye Chelny executive committee officially refused to comment on the FAS decision. A source in the city administration said that legal formalities may take one or two months, but “in any case, the city will not be left without water.”

Elena Ivanova

OFAS is hot on the trail