East Line considers the arbitration ruling unenforceable, since the building that the court found to have been illegally privatized has been torn down.
Photo: Alexey Kudenko
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Domodedovo Faces Nationalization
The Domodedovo Airport complex, which belongs to the East Line group of companies, should be nationalized under an arbitration court decision that came into force on March 20, after an appeal was rejected. East Line considers the ruling unenforceable, since the building that the court found to have been illegally privatized has been torn down. The Federal Property Management Agency (Rosimushchestvo) considers the complex of buildings that replaces the old one suitable compensation. This is the second of two suits it has filed seeking the return of the airport complex.
East Line is made up of 14 enterprises, the owners and financial indicators of which are not disclosed. It took over the main business activities at Domodedovo in 1997. According to unofficial information, the group is controlled by businessman Dmitry Kamenshchik. The airport served 18.755 million passengers in 2007 (up 22 percent over 2006) and 76 airlines, including 44 foreign airlines. Airport Council International Europe rated the airport No. 1 in Eastern Europe and No. 19 in Europe as a whole.
Rosimushchestvo has been disputing the privatization of Domodedovo Airport since 2005. It filed two suits in the Moscow Region arbitration court. One suit demanded the annulment of the 1997 exchange agreement under which the state Domodedovo Production Association for Civil Aviation, assessed at 21 million rubles, received 42,192 shares in OAO Domodedovo 2. Domodedovo 2 was later transformed into ZAO Domodedovo Airport Complex (controlled by East Line) and the state enterprise was liquidated. The second suit demands the return of property from its illegal holder Hacienda Investments Ltd., a Cypriote holding company controlled by East Line that received the airport complex from the ZAO in a 2001 exchange agreement.
In November 2005, an arbitration court rules that the exchange agreement in the first case was null because it was made without the permission of Rosimushchestvo's predecessor Goskomimushchestvo. In November 2006, the presidium of the Supreme Arbitration Court considered the case. East Line representatives argued that more than $1 billion has been invested in the airport complex, and Rosimushchestvo was demanding the return of facilities that were not bought from it. The Supreme Arbitration Court overturned the ruling on a technicality and urged the parties to reach a settlement.
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All the Article in Russian as of Apr. 03, 2008
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