The arbitration court on Tuesday, May 12, arrested the funds of Uralvagonzavod and its subsidiary ChTZ-Uraltrak as part of Alfa Bank’s second claim to collect debt under a loan agreement for 523.5 million rubles, TASS reports .

“At the moment, the claim has been accepted for proceedings. The preliminary hearing is scheduled for June 5,” the court’s press service told the agency.

At the same time, Deputy General Director of Uralvagonzavod Alexey Zharich told Interfax that the seizure of the company’s funds is illegal. “This arrest is illegal, since there is collateral for the loan. In addition, 325 million rubles have already been paid to repay the loan,” he said, adding that “the corporation will challenge this decision.”

Alfa Bank filed the first claim against Uralvagonzavod for more than 6 billion rubles and $39.7 million in mid-April. A preliminary hearing was scheduled for May 27. The court noted that in connection with this claim, Alfa Bank has not yet received a motion to seize property or funds.

On Friday, May 8, Alfa Bank warned Uralvagonzavod’s creditors of its intention to apply to the arbitration court for bankruptcy of the corporation. For its part, Uralvagonzavod called the bank’s intentions unconstructive.

The state corporation "Uralvagonzavod" is engaged in the development and production of military equipment, road construction machines and railway cars. The corporation includes more than 40 industrial companies, research institutes and design bureaus. The corporation's head enterprise, Uralvagonzavod, is located in Nizhny Tagil.

Developments: The head of Uralvagonzavod called Alfa Bank’s claims “blackmail”

The court arrested 523 million rubles from Uralvagonzavod at the suit of Alfa Bank