Companies that, according to opposition leader Alexei Navalny, are associated with businessman Yevgeny Prigozhin, entered into a cartel agreement at auctions of the Ministry of Defense, the Federal Antimonopoly Service (FAS) decided. But the volume of violations found by the department turned out to be an order of magnitude less than the Anti-Corruption Foundation (FBK) expected.

FAS identified an anti-competitive agreement at eight open auctions of the Ministry of Defense, with a total initial minimum price of about 1.8 billion rubles, the service said in a message on its official Facebook account .

The department recognized the participants in these auctions - LLC "White Bear", LLC "Koralklin", LLC "Millennium Clean" and a group of persons within the limited liability companies "Component", "Ecobalt", "Ruskompleks", "Spetsresurs", "Megaline" - violating antimonopoly laws, as stated in the message. Refusal of competition between participants in such large auctions leads to inefficient spending of budget funds. A fine for participation in a cartel conspiracy will be imposed on these companies later as part of the consideration of the administrative case, the FAS noted.

“We will take into account the fact that one of the companies made a “confession,” that is, voluntarily reported to the antimonopoly authority about <...> an anti-competitive agreement and refusal to further participate in it,” said Deputy Head of the FAS Russia Alexey Dotsenko, not naming companies.

FBK, in an investigation published on May 19, claimed that with the help of documents, the FAS proved the involvement of these companies associated with Prigozhin in the largest cartel conspiracy in Russia for 23 billion rubles.

Initially, the FAS studied the actions of participants in 18 auctions of the Ministry of Defense held in May - July 2015, but not all of them found evidence of cartel agreement and the case had to be dropped against a number of companies, FAS press secretary Irina Kashunina explained to Vedomosti.

Fontanka was the first to write about the fact that companies close to Prigozhin may be involved in billion-dollar contracts for the Ministry of Defense. In January 2016, the publication spoke about five unknown companies created by retired St. Petersburg police officers to participate in tenders of the Ministry of Defense. In 2015, these companies won competitions from JSC State Housing and Communal Services of the Ministry of Defense to service military camps and provide barracks with heat, water and other utilities for 26.8 billion rubles. The auction took place without competition, the price reduction from the initial maximum was about 1%.

Fontanka believed that all the companies were secretly managed by Megaline, among the founders of which was Concord Management and Consulting, which since February 2017 has been 100% owned personally by Yevgeny Prigozhin. Before this, the company was owned by his mother Violetta Prigozhina. “Megaline” in the same 2015 itself won tenders from the Ministry of Defense for cleaning services for another 3 billion rubles.

This investigation angered Prigozhin so much that he filed a lawsuit against Yandex , demanding to apply the right to be forgotten - to hide from Internet searches any links to the publication’s investigation into contracts of the Ministry of Defense and companies close to it. But already in August 2016, Prigozhin unexpectedly withdrew his claim. At the same time, the FAS, after a complaint from the FBK, opened a case of cartel conspiracy.

According to FBK, the connection between the suppliers of the Ministry of Defense and Prigozhin was confirmed when the companies sent to the FAS all the documents requested for the investigation. It turned out that all bidders accessed electronic platforms from one IP address belonging to Prigozhin’s Concord Management and Consulting. The email of these companies is hosted on the servers of another Prigozhin company, Medstroy, and the phone number belongs to Prigozhin’s Concord Food Plant.

From the Megaline bank statement, which FBK received from the FAS, it is clear how Prigozhin’s company financed the bidders. First, Concord Management and Consulting issued a loan for 715 million rubles. Prigozhin’s “Megaline”, and he transferred money to “Ekobalt” and “Prometheus” to pay for their security deposit at the Ministry of Defense competitions.

On May 19, the Concord press service told Vedomosti that the FAS did not contact the company or Prigozhin personally with questions about this situation. Prigozhin is not a participant or director of companies that win Ministry of Defense competitions, Concord added. Speaking about the evidence provided in Navalny’s investigation, the company said: “Since the Concord Management and Consulting company was at one time the founder of the Megaline company, it provided the Megaline company with the opportunity to use its IP address. The bank statements published by FBK are not an official document that could be commented on. In addition, information about the movement of funds in bank accounts constitutes a banking secret. As for loans, the conclusion of transactions for the provision of borrowed funds in itself is an ordinary business transaction.”

In December 2016, Prigozhin was included in the expanded US sanctions list. The Office of Foreign Assets Control (OFAC) named Prigozhin as a sponsor and agent of “senior Russian officials” and said that he does business with the Ministry of Defense, and a company associated with him is a contractor for “the construction of a new military base near the Russian-Ukrainian border.” Prigozhin is also known as the creator of a “troll factory” and a “media factory” in St. Petersburg that protect the interests of the state on the Internet, an RBC investigation showed .

FAS found cartel agreement at auctions of the Ministry of Defense