19 May 2011
New evidence confirming Maximov’s association with key Maxi-Group counteragents revealed
Ongoing investigations reveal new evidence of Maximov’s association with large creditors and debtors of companies belonging to Maxi-Group.
Nikolay Maximov’s press announcements state that at the end of 2007, Maxi-Group was experiencing a heavy financial deficit due to a sudden “cash gap” caused by the refusal of creditor banks to refinance the company’s loans.
A financial audit of Maxi-Group’s activities carried out in 2008-2010 revealed that the Company’s financial difficulties were largely determined by the inadequate quality of its turnover assets formed mainly by the receivables of companies, presumably associated with Maximov. After NLMK acquired Maxi-Group shares, the main debtor companies resolved to self-liquidation and bankruptcy with active administrative support from Maximov and his representatives. At the same time, a number of law suits were instigated against the Group companies with claims of recovering artificial payables to companies also supposedly affiliated to Nikolay Maximov.
In relation to criminal proceedings against Maximov, PriceWaterhouseCoopers, Maxi-Group’s auditor, presented, upon a formal request, a letter of representation from the company management. This letter of representation, dated August 16, 2007, is signed by Maximov-controlled management, including Mr Alexander Loginovikh, Maxi-Group CEO. The letter clearly lists all the companies directly subordinate to and controlled by Mr Maximov as Maxi-Group’s main shareholder. The letter unambiguously confirms earlier suspicions that a number of large creditors and debtors of the companies belonging to Maxi-Group were essentially under Maximov’s control.
PriceWaterhouseCoopers also submitted its Auditor Report on the 2006 reporting, that states the presence of “material uncertainties that could lead to substantial doubt as to the Group’s ability to pursue its activities uninterrupted.” This reservation is in fact a testimony of the auditor’s doubts in regard to the company’s solvency. In breach of his warranties and representations made in relation to the transaction, Mr Maximov concealed this fact from NLMK.