By John Helmer in Moscow
Vadim Varshavsky, the owner of the bankrupt Estar group of midsize, specialty steel mills, has been hit with court bankruptcy orders in Moscow and Novosibirsk to sequestrate half of his salary as a member of parliament, and at least two apartment residences he maintains in Moscow.
The orders by the courts are in relation to debts claimed by the Bank of Moscow, which is owed more than Rb364 million ($13 million) in defaulted loans to the Estar trading unit and to Novosibirsk Metal Works (NMZ), one of the mills in Varshavsky’s Estar group. NMZ was transferred on a 5-year lease to Metallservis, a metal trading company owned by Oleg Tyurpenko, in July. But creditors have continued pursuing Varshavsky, who had given his personal guarantee to secure the Bank of Moscow loans.
Garnishment of the salary of a deputy of the State Duma in a bankruptcy enforcement order is unprecedented, Duma sources say. Varshavsky won election in 2005 and 2007 to the lower house of the Russian parliament, representing the Kamensky district of the Rostov region, where he built the Rostov mini-mill; that mill has been transferred to management by the Mechel group. In the Duma, Varshavsky is also a member of the Committee on Industry. A fellow committee member told CRU Steel News: “I have never seen Varshavsky at the Industry Committee. Nobody is actually keeping a record of the deputies appearing in Duma. So practically nobody here will tell you if Varshavsky ever comes.”
The total debts Varshavsky reportedly owes come to between $3 billion and $4 billion, according to a source close to his former business partner, Mikhail Gutseriyev, and to BiN Bank, which abandoned a debt restructuring mandate from Varshavsky for the Estar group earlier in the year. That caused other Russian banks, including Alfa Bank, Bank of Moscow, and Moscow Narodny to start asset search and seizure moves against Varshavsky, and court proceedings.