Details of frauds related to murky Air Moldova privatisation revealed

Details of frauds related to murky Air Moldova privatisation revealed
By Iulian Ernst in Bucharest March 10, 2021

The money paid for the privatisation of flag carrier Air Moldova was extended by the Moldasig insurance company through intermediaries of the former leader of the Democratic Party, Vladimir Plahotniuc, deputy parliament speaker Alexandru Slusari said, quoting from the report of the parliamentary commission investigating the privatisation and concession of state property.

Slusari is a founder and deputy president of the Dignity and Truth Party, set up to overthrow the regime of Plahotniuc, once the most powerful man in the country, and the commission’s investigations into the privatisation deals during the Democrat-led government have a certain political dimension.

Slusari said that on the one hand Air Moldova’s management siphoned money out of the company during 2013-2017 (MDL1.28bn or roughly €100mn) and on another hand half of the money paid to the state for Air Moldova was extended by Moldasig (allegedly a “wallet” for the money siphoned out) and “laundered” through intermediaries including quasi-anonymous individuals, according to the conclusions of the parliamentary commission.

Recently there have been reports that the airline is in financial difficultes. In Ferbuary, the High Court in Ireland ordered an Air Moldova Airbus A319 passenger jet not to leave Dublin airport, because of an award of €4.2mn in favour of Romanian company Just-US Air, Irish Times reported. 20 passengers, plus the aircraft’s crew, were stranded in Dublin as a result of the order.

Civil Aviation Group, made up of Blue Air (49%) and Moldovan citizens Andrei Yanovich and Sergey Melnik (25.5% each), bought Air Moldova for MDL1.2bn in October 2018. However, out of the total value of the deal, only MDL50mn was paid for the shares and the rest of the money is the debt owed by Air Moldova to third parties. The payment was reportedly made in cash as opposed to by bank transfer. Blue Air later pulled out, saying it was not financially involved in the deal.

As Slusari noted, from 2013 to 2017, the expenses of Air Moldova increased artificially and the company’s losses amounted to RON1.28bn. In this regard, the National Centre for Combating Corruption opened a criminal case in August 2019.

Separately, Slusar said that the evidence supports the idea that the Public Property Agency asked a price six times lower than estimated by the Chamber of Accounts. It is not explained why other bidders did not submit offers, but the short notice is the most likely cause: Civil Aviation Group, despite being set up 12 days before the bid, was quickly accepted as the winner with no further check from the privatisation authority.  

Slusar explained in detail how the money for the privatisation of Air Moldova came as a loan from Moldasig. There is, however, a link that needs further clarification unless it is demonstrated with hard evidence: this is the moment when a previously unknown old lady in Chisinau withdrew €2.5mn from a bank (undisclosed by Slusar) in Chisinau and hand the money to one of the buyers of Air Moldova. The rest should be registered in the banks' accounts unless the documents have been burned (as in the case of the $1bn bank frauds).

“On September 28, 2018, the Moldasig insurance company made two transfers to Style Design Imobil for a total of MDL59.22mn, for the purchase of 55% of the shares of another company, Style Design Company. Both companies were created on 12 to 13 September 2018 by two citizens of the Russian Federation — Roman Mishchenkov and Igor Dulga, Plahotniuc's intermediaries. Then, on September 28, Style Design Imobil transferred MDL59.2mn loan to a 65-year-old resident of Chisinau Olga Evdokimova, who is not listed in the company's management and has not even received a salary in recent years,” stated Slusar.

He noted that Evdokimova withdrew MDL58.7mn from the account of an undisclosed Moldovan bank.

“The transaction was made after the end of the working day, and this contradicts the requirements to prevent and combat money laundering and terrorist financing,” said Slusar.

Further, according to Slusar, this money was put into circulation by the co-founder of Civil Aviation Group Andrei Yanovich, “a man from the entourage” of the now wanted deputy Ilan Shor.

Yanovich (owner of 25% in Civil Aviation Group) deposited MDL50.2mn in his Moldovan bank account and provided it to Civil Aviation Group as a loan.

On the same day, as the investigation commission found out, Civil Aviation Group transferred MDL49.8mn to the state for the privatisation of Air Moldova.

On July 26, 2019, the National Anticorruption Centre (CNA) opened a criminal case in connection with money laundering. As noted by Slusar, there are six people indicted in the case. One of them, Yanovich, managed to escape and is on the wanted list.

Slusar promised in the near future to provide detailed information on the schemes for withdrawing money from Moldasig and Asito in favour of Shor and Plahotniuc in 2018-2019.