MSM-1: The Trust That Collapsed
On January 28, 2025, the Arbitration Court of Moscow is scheduled to hold a hearing to decide the fate of a bankruptcy petition filed by the Federal Tax Service against the joint-stock company "Mosstroy." The court accepted the tax service's application back in August, considering "Mosstroy" to be mired in hundreds of millions of rubles in tax debts, which it either cannot or will not pay. In 2023, the tax service had already initiated bankruptcy proceedings against "Mosstroy." At that time, the company had accumulated about 400 million rubles in debts solely from taxes and fees. However, last year, the bankruptcy process was halted.
The Arbitration Journal became interested in AO (Joint-Stock Company) "Mosstroy" due to its beneficiaries: brothers Sergey Gledelkin and Igor Tkach, well-known figures in the criminal case against the former head of the Banking Department of the KFSB, Kirill Cherkalin. Recognized as victims under highly questionable circumstances, Gledelkin and Tkach helped the FSB officer conceal the origins of the billions discovered in his possession. Now, Gledelkin and Tkach are making significant efforts to keep public interest in Cherkalin’s case alive.
In 2021, during Cherkalin's trial, Gledelkin and Tkach boldly claimed that the money found with Cherkalin actually belonged to them. However, the court dismissed their audacious claims and confiscated the funds, declaring them as state revenue from unknown sources. The court discreetly refrained from stating that these funds were most likely bribes. Now, Gledelkin and Tkach are attempting to prove in another court that they suffered significant losses due to Cherkalin and his accomplices.
Interestingly, the FSB officers are being accused of merely providing the brothers with allegedly inaccurate information. This information, however, was public knowledge published in Moscow newspapers about the cancellation of one of the city's projects. Yet the lawsuit is not directed against Moscow authorities but rather against those who read the Moscow newspapers and followed events, including the FSB officers. Gledelkin and Tkach claim losses of nearly 9 billion rubles each.
The lawsuits initiated by Gledelkin and Tkach and their business practices will be discussed in one of the upcoming issues of the Arbitration Journal. For now, let's return to the company "Mosstroy," which, until October 29, 2021, was known as the Joint-Stock Company "Trust MSM-1." This "Trust" was founded on July 1, 2001, by a migrant from Ukraine, Igor Kovpak. On February 12, 2003, Kovpak transferred half of the company’s capital, amounting to 5,000 rubles, to his compatriot from the Ukrainian city of Smila, Igor Tkach.
Later, the compatriots sold the "Trust" at face value to the "Avenue" holding company. The Joint-Stock Company "Trust MSM-1" was an active participant in several dubious stories, which the Arbitration Journal has already reported on. But let us briefly recall.
We begin with the story of how the “Trust” of "Mosstroy Mechanization No. 1," abbreviated as "MSM-1," was taken over by the heads of "Mosstroy." In the late 1990s, during a severe shortage of construction equipment, Moscow authorities equipped "MSM-1" with a new fleet of construction machinery, mostly imported, at ridiculously low ruble prices.
A side note: The history of the "Trust Mosstroy Mechanization No. 1" is posted on the website of the former Austrian company "Avenue Holding," now a Hong Kong firm called "Avenue Group." However, the "Trust" is referred to differently on the Avenue website. Initially, it was "ZAO Trust MSM-1." Now the same history is attributed to "ZAO UM MSM-1."
"Mosstroy" was founded in 1938 and until 1993 occupied the largest share of the construction market in the USSR. It participated in the construction of such landmarks as the Kremlin Palace of Congresses, Moscow State University, the Hotel Russia, the Luzhniki Stadium, and the Olympic Village in Moscow.
From 1999 to 2001, the company actively contributed to the redevelopment of Moscow's historic center, constructing approximately 150,000 square meters of residential and commercial real estate.
This is, in a sense, a classic shell game—a scam targeting the gullible. The story actually pertains to an entirely different "Trust Mosstroy Mechanization No. 1," which was liquidated in 2004 by a decision of the Arbitration Court. The company "ZAO UM MSM-1" never appeared in the history of "Trust Mosstroy Mechanization No. 1." And there was no trace of "Vinni Group" near the objects constructed by the mechanization division of the Soviet construction "Trust" of Mosstroy.
And the "Vinnichniks" Simply Took It or, to put it plainly, they outright stole the history of one of the largest construction trusts in the USSR. They seized all the valuable assets of the "Trust," including construction equipment and the bases where it was housed, while spawning a slew of companies with names that included the letters M, S, M, and the number 1.
The story of how a close-knit group of compatriots from the Ukrainian city of Smela took over the "Trust Mosstroy Mechanization No. 1" (or MSM-1) was previously covered in the program The Baturin Billionaire. Here's a brief recap:
On March 30, 2001, in Moscow, Viktor Ukolov, the 39-year-old deputy general director of the construction trust "Mosstroy Mechanization No. 1," was shot dead. This murder remains unsolved. However, it quickly became clear who the key beneficiaries of this bloody crime were. It turned out that shortly before Ukolov's murder, the transfer of the trust's assets, including those of "Mosstroy Mechanization No. 1" and MSM-1, had begun under the wing of the company Inteko, owned by Elena Baturina, the wife of then-Moscow Mayor Yuri Luzhkov.
In 2003, Inteko’s website announced that the company had acquired the enterprise "Mosstroy Mechanization No. 1" — specifically, "ZAO Trust MSM-1," which included more than a thousand pieces of equipment. However, the registry of "AO Trust Mosstroy Mechanization No. 1" (abbreviated as MSM-1) in 2003 contained no mention of either the company or individuals associated with Inteko. Instead, there was a brand-new entity called "ZAO Trust MSM-1," whose founders in 2003, acting in the interests of Inteko, were two bold young men from Ukraine — former Ukrainian police officers Igor Kovpak and Igor Tkach.
In 2001, they had been employed by the state unitary enterprise "Moscow-Center," where Sergey Gledelkin served as general director. In July 2002, the 29-year-old Igor Tkach left "Moscow-Center" and was appointed general director of LLC "Inteko-Center," where Elena Baturina herself chaired the board.
While working at "Moscow-Center" and Inteko, Gledelkin, Tkach, and Kovpak became the formal executors of transferring over a thousand pieces of construction equipment from the state unitary enterprise "Moscow-Center" to the balance of a new enterprise with a charter capital of just 10,000 rubles. This transfer occurred at laughably low prices. The enterprise had been on the balance sheet of a state unitary enterprise with 20% government participation, whose history dated back to 1938 in the Soviet era.
This murky story was widely covered by the press in the early 2000s. Publications appeared even in mass-circulation outlets such as Komsomolskaya Pravda and Sobesednik. Readers learned back then that in the late 1990s, the MSM-1 Trust received from the city a state-of-the-art fleet of scarce imported excavators, cranes, dump trucks, and other construction equipment.
However, on June 17, 2004, the MSM-1 Trust was liquidated by an arbitration court decision. Nearly all of the construction equipment of what was once the largest construction trust in the country ended up on the balance sheet of ZAO Trust MSM-1 at token prices. At the time, its founders, each with shares of 5,000 rubles, were Igor Tkach and Igor Kovpak — compatriots and relatives who had come to Moscow from Smela, Ukraine, where they had previously worked together in the local police.
In 2006, Tkach and Kovpak sold 100% of ZAO Trust MSM-1 shares at nominal prices to the Austrian company Avenue.
Details of this sordid affair can be found in The Baturin Billionaire program via the link below the video.
Now, let’s move on and revisit some very important details that were not known when the program The Baturin Billionaire was released.
The focus is on an outrageously bold scheme. After ZAO Trust MSM-1 came under the control of the Austrian company Avenue, they orchestrated a daring operation, extracting more than $75 million from the Moscow budget.
At the exchange rate of the time, this amounted to 2.3 billion rubles. Here’s how it unfolded:
On December 30, 2008, the Moscow government issued a resolution to replenish the charter capital of the state unitary enterprise "Mosstroyresurs" by allocating 2.3 billion rubles for this purpose. The capital replenishment was required to purchase from Gledelkin's Avenue Group four legal entities, which held on their balance sheets roughly half of the construction equipment extracted from the MSM-1 Trust shortly before its bankruptcy, as well as three storage bases for this equipment.
Whether the idea came from City Hall or someone gave them the hint is unclear, but the construction equipment, which had been purchased with budget funds in the late 1990s and by the mid-2000s was already morally and physically worn out, was once again deemed necessary for Moscow's coffers.
In 2009, the state unitary enterprise "Mosstroyresurs" and AO "Avenue Management" signed an agreement for the purchase and sale of shares in the charter capitals of four legal entities and transferred the funds to Avenue Management's accounts.
The entire 2.3 billion rubles were spent, and yet no equipment was left behind. Instead of buying new machinery, they decided to acquire used equipment—over 7 to 10 years old. Moreover, they also purchased companies burdened with debts. According to accounting reports at the end of 2008, these companies had negative net assets of minus 55 million rubles.
I met with the director of the state unitary enterprise "Mosstroyresurs," who had the misfortune of becoming the head of this organization after the deal to acquire these four companies was finalized. At that point, "Mosstroyresurs" was already staring bankruptcy in the face.
It turned out that, in addition to selling these companies to the Moscow government for $75 million—akin to offering beads to tribal leaders—Avenue Management burdened one of the companies (which possessed the relatively newer equipment) with a fictitious investment contract, siphoning off 187 million euros.
No significant resources were left. Equipment was either sold or handed over to unauthorized individuals. Yet no one turned to law enforcement, not even to ensure compliance with the decision. It seemed that the Moscow government, during this period, turned blind, deaf, and mute, quietly ignoring blatant criminal activity and embezzlement.
A criminal case was initiated only after Yuri Luzhkov was sent into retirement and Sergey Sobyanin became the mayor of Moscow. The case was opened on May 10, 2012, under number 118540. As part of this case, on January 22, 2013, a senior investigator from the Investigative Directorate for the Central Federal District of the Ministry of Internal Affairs issued a submission recommending measures to address legal violations.
This document noted that unidentified individuals, acting on behalf of JSC "Avenue Management," misled the Moscow government between June 2008 and December 2009 by presenting false information about the actual value of four legal entities.
Initially, these unidentified individuals could not be identified, although everyone knew that the ultimate beneficiaries of JSC "Avenue Management" were Sergey Glyadelkin and Igor Tkach. Tkach, representing the Moscow government’s Control Committee, oversaw the deal. He or his colleagues in the committee approved a resolution allocating budget funds to "Mosstroyresurs" specifically for acquiring the four "Avenue" companies.
All the evidence needed to prove the straightforward but large-scale embezzlement was in place. It was obvious even to a non-specialist. However, Glyadelkin and Tkach appeared to have a powerful patron in the FSB. We likely know the name of this patron: FSB General Oleg Feoktistov. Connections between Glyadelkin, Tkach, and General Feoktistov were covered in the program "The General’s Mistake," which can be viewed via a link below this video.
Ultimately, the criminal case was quietly shelved, citing "changed market conditions" as the reason for the devaluation of the companies’ assets. "Mosstroyresurs" itself was then driven into bankruptcy.
In 2014, 2015, and 2016, Russia’s Ministry of Construction signed at least five contracts with ZAO "Trest MSM-1," awarding the company over 18 billion rubles. The first contract was signed on December 25, 2014, followed by contracts in July and August 2015 and later in 2016.
In all these contracts, ZAO "Trest MSM-1" was designated as the sole supplier. Budget classification codes 999-208 or 999-208-00 suggest that these contracts were part of humanitarian aid efforts for foreign populations. The 18.4 billion rubles were allocated for restoring 436 social infrastructure facilities in the Donetsk People’s Republic (DPR), which was at the time a self-proclaimed, unrecognized entity—even by Russia.
However, at least half of these facilities, 213 to be exact, were never restored.
I previously discussed this story in July 2022, and the program can be found via the link below this video. A textual investigation into billions allocated for Donbas restoration that disappeared through "Trest MSM-1" is also linked. Of the 18.4 billion rubles, 14.5 billion ended up in the accounts of LLC "Stroymonolit," which, by all indications, was a shell company.
Registered in 2014—the same year MSM-1 and the Russian Ministry of Construction signed their first Donbas contract—the company was founded by Galina, a stockroom worker. Her surname is not disclosed. She had moved to Moscow from the village of Sungur in the Ulyanovsk region and registered at a “rubber apartment” alongside a dozen other newcomers.
Later, new stakeholders emerged in "Stroymonolit," including Dmitry, a former detention center inspector dismissed for taking bribes, who received a minor penalty of 3 million rubles, and Igor, a former military missile specialist from Krasnokamensk.
Interestingly, Igor’s son Dmitry was implicated in fraud schemes involving "Starbank." Notably, LLC "Stroymonolit" also used "Starbank" for its transactions.
Accounting records indicate that "Stroymonolit" functioned as a transit company, keeping a small fee for its services and transferring the remaining budgetary funds to other firms. Neither Galina, Dmitry, nor Igor had any experience in construction or project management.
I am ready to provide competent authorities with the names, personal details, and identification data of the nominal founders and directors of LLC "Stroymonolit." Perhaps law enforcement can learn from them who hired them to participate in the embezzlement of billions.
However, I have serious doubts that this information will interest the Ministry of Internal Affairs, the Investigative Committee, the Prosecutor General’s Office, or the FSB. Since the program "Donbas Zigzag" and the publication of this investigation, over two and a half years have passed, yet no one seems to care about the billions allocated for Donbas reconstruction that ended up in the pockets of unscrupulous businessmen.
It seems as though Donbas is a black hole meant for disappearing budgetary funds. All we can do is continue investigating and closely examining the lives and fates of Sergey Glyadelkin, Igor Tkach, and their childhood friends and compatriots from the Ukrainian city of Smila.
