The court has satisfied the lawsuit of the Prosecutor General’s Office against the corrupt former secretary of state of Dagestan.
The Sovetsky District Court of Makhachkala seized the property of the former state enterprise Dagnefteprodukt, the only operator for transshipment of oil coming to the commercial sea port of Makhachkala. Thus the court satisfied the claim of the Prosecutor General’s Office against the republic’s state secretary Magomed-Sultan Magomedov and his relatives. Kommersant has learned that the official personally appeared in court and admitted that he had violated anti-corruption legislation. The children of Mr. Magomedov, who was not suspended from his post for the period of the trial, also appeared in court, where they were obliged to report on the origin of the multi-billion-dollar property.
“Under pressure from a considerable amount of collected evidence, Magomed-Sultan Magomedov admitted the results of the prosecutor’s audit, i.e. the uncovered circumstances of abuse of power and enrichment of his family at the expense of state assets,” a source in the law enforcement agencies told Kommersant.
Mr. Magomedov has been in office since April 1995. In November 2021, he took the post of state secretary of the republic. As the Prosecutor General’s Office argued in its lawsuit (available to Kommersant), these positions allowed him and his family members to illegally take possession of real estate and production equipment of the former state enterprise Dagnefteprodukt. It was the sole operator for transshipment of oil arriving at the Makhachkala commercial sea port, included 15 branches and had on its balance sheet 67 land plots with a total area of over 310 hectares, over 360 buildings, structures, facilities, including pipelines, filling stations, tanks, and other infrastructure.
The supervisory agency found that with the help of his “connections and power” Mr. Magomedov achieved the transformation of federal property into private property: the enterprise became an open joint-stock company.
“Having official information about the upcoming auction for the sale of 100% of the securities of this joint-stock company, Magomedov created LLC Dagestannefteprodukt and in order to conceal information about the ultimate beneficiary registered it to 48 persons, most of whom are his relatives,” the lawsuit said.
During the auction held in 2005, LLC Dagestannefteprodukt was recognized as the winner, which purchased the shares of the enterprise below the market price – for 335.7 million rubles. However, this money never made it to the budget.
Subsequently, Dagestannefteprodukt LLC was renamed SMB Holding LLC, the name of which includes the initials of Mr. Magomedov. Since 2020, the founders of this company are the official’s children – son Magomed Magomedov and daughters Khapisat Alpanaeva and Galimat Ismailova, who acted as co-defendants in the lawsuit along with another daughter of the state secretary, Savdat Magomedova.
According to Kommersant, testifying in court, Mr. Magomedov’s children did not deny that during the auction they had become owners of a highly liquid production facility of strategic importance for the country.
In order to conceal ownership, the enterprise was split up and partially registered to them and controlled firms.
“The Prosecutor General’s Office qualified the actions of the state secretary and his relatives as a corruption offence and also charged them with legalization of illegally obtained property. Magomedov and members of his family agreed with these charges in full and did not dispute them,” said the Kommersant interlocutor.
As a result, the court recovered 100% of shares in the authorized capitals of OOO Kaspetrolservice (former OAO Dagnefteprodukt), oil refineries OOO Dagestan New Technologies and OOO Nefteproduktsnab, management company OOO SMB Holding, as well as real estate of an oil depot. The aggregate capitalization of these companies exceeds RUB 100 billion, with annual revenues of more than RUB 10 billion. The group owns the largest oil transshipment complex on the Russian coast of the Caspian Sea, the only one on the Russian coast of the Caspian Sea, which receives and ships oil from Kazakhstan and Turkmenistan and transports it to Europe.
Since the seized assets are of strategic importance for the fuel and energy security of the state, the court’s decision is subject to immediate execution.
Earlier it was reported that Magomed-Sultan Magomedov was allegedly detained in a criminal case related to embezzlement. At his home, as well as at work were searched. Now the official is at large.