The Management of FESCO Transportation Group (“FESCO”, “Group”) has to report on an attempt of speculation and dissemination of false information on behalf of the Group's shareholder Ziyavudin Magomedov, accused of the organization of a criminal association, embezzlement and fraud committed on an especially large scale (part 1 and 2 of Art. 210, part 4 of Art. 160, part 4 of Art. 159 of the Criminal Code).
In the beginning of September 2020, the Board of Directors of FESCO (the parent company of the Group) by a large majority of votes elected a new president Arkady Korosteljov, who has extensive management experience, including the position of Vice-president for Commerce at FESCO. Following the decision of the Board of Directors, the new management hired the international consulting company Alvarez & Marsal to conduct an independent financial and operational audit. Internal investigations on all managers and directors of FESCO and its subsidiaries were also conducted. The audit revealed a number of egregious violations, financial improprieties and attempts to impair the rights of minor shareholders by representatives of Ziyavudin Magomedov. Moreover, on 3 September 2020, a group of unidentified persons illegally detained Mikhail Sakharov, who at that time was President of FESCO, in the Primorye Territory thus preventing him from flying to Moscow. A missing persons report was filed to the police, and after that Maksim Sakharov was released by the criminals.The actions of the new management are aimed at increasing the long-term financial stability and liquidity of the Group. As one of the measures to maintain stable operating activities, on 15 September 2020 in accordance with the decision of the Board of Directors, the management of the Group filed lawsuits against the joint-stock companies to demand the return of previously issued loans. The claims were submitted to the London International Arbitration Court by FESCO’s subsidiary with respect to the companies associated with Magomedov. These actions can improve the financial performance of the Group and have a positive impact on FESCO's partners and creditors.
All actions of the Board of Directors and the management of FESCO are aimed at protecting the interests of the Group, preserving its integrity and maintaining long-term financial stability. All decisions of the management and other shareholders are adopted legitimately and transparently in accordance with the national and international legislation. We are hoping that the companies of Ziyavudin Magomedov will return the loans issued to them, and we are asking everyone to refrain from unfounded accusations and from interfering with an independent examination of the Group's operating activities and financial audit. Otherwise, we will have to apply to law enforcement authorities to protect the interests of the Group.
Ziyavudin Magomedov has been in custody in the Lefortovo detention center since March 2018, and his allegations are indeed questionable in terms of the legality of their distribution. Such actions are clearly related to an attempt to escape the prosecution for not returning the funds he received earlier.