On 18 March 2013 Elena Baturina, the wife of former Moscow Mayor, now living in London, voiced harsh critisism targeted at Prime Minister Dmitry Medvedev. According to her, he was to blame for the fact that she has to stay in London. Moreover, Baturina accused the de jure second person in the country of raider seizure of land belonging to her business. Whose side is justice on in this argument, trailing for almost three years?
Nothing new under the sun
Back in March 2008 Inteko, Baturina’s group of companies, announced that it started construction of a multifunctional complex Setun Hills. It was to be located between the Poklonnaya mountain, Setun river, Starovolynskaya and Minskaya streets and Moscow Little Ring Railway, which is a very prestigious area in Odintsovo district of Moscow region.
Total area of the finished project would have been 729 thousand square metres and, as planned by the German architect Hadi Teherani, the complex was to consist of several futuristic-looking buildings. Five of them would have hotels, apartments and offices. A cinema, a health center and a supermarket were also to be part of the complex. All of this was designed within the framework of transferring business activity beyond the Moscow Ring Road, which the new city hall officials are now clumsily following in a rush.
Shortly before the project began, the construction site was taken out of the specially protected area of Setun valley and turned into a dump. Therefore, prior to any construction works Baturina's entities had to do some clean up.
Setunskaya territorial directorate (TD) that was engaged in the development had already held preliminary steps to set up for construction. But in September 2010 a campaign of harassment was unleashed against the Mayor of Moscow, Yuri Luzhkov. The campaign ended, as we know, with his no confidence dismissal from office. The project was stopped by an arbitrary decision of the new mayor Sergei Sobyanin in his decree issued 16 November 2010. Based on the decree by Sobyanin, Moscow Prosecutor's Office demanded in Tverskoy court that the city government and TD Setunskaya acknowledge that permits for the design and construction of the complex did not correspond to the applicable laws and regulations.
Since that moment there has been endless fighting over the 55 hectares of land that Elena Baturina, according to her opponents, has no legal right to own.
The argument over ownership of the land began a while ago. As early as 1 April 1991 the Ministry of Agriculture and Food of the Russian Federation allocated 244 thousand square metres for Matveyevsky collective farm. In October 1993 the land was brought into the ownership of the restructured CJSC Matveyevskoe, which was based on the restructuring plan for Matveyevsky collective farm in Odintsovo district of Moscow region triggered by the RF Government Decree issued 4 September 1992 and then the decree of Odintsovo district Head of Administration issued on 29 October 1993. Privatization thus had perfectly legal grounds, which was later repeatedly confirmed by the courts of different jurisdictions.
However, there is one nuance. In fact, 1984-1991 intergovernmental agreements signed by Soviet Union stipulated the allocation of 37 hectares of land in Moscow city or Moscow region meant for the construction of embassies of 12 countries. The land we are talking about here has no direct connection to those 37 hectares. During the Soviet era and then later the land that's in the middle of our story was used for agricultural purposes.
However, according to the decree "On some issues of placement and maintenance of foreign missions in Moscow" Boris Yeltsin signed on 22 November 1993, these lands were reserved for the diplomatic mission. In particular, the site where Setun Hills complex was to be constructed, was supposed to have been used for the construction of Embassies of India, China, and Cuba. Other nearby plots of land, which also got into the hands of Inteko, were originally supposed to become the lands for the Embassies of Vietnam, Guinea, Afghanistan, Ghana, Nicaragua, Pakistan, Thailand, Mozambique, and North Korea. (http://www.rtkorr.com/news/2011/10/25/272368.new http://realty.lenta.ru/news/2012/10/04/spor/ )
Thus, the presidential decree abolished all previously existing administrative measures relating to these areas.
This decree was issued in the period of transition, and, as noted by arbitration courts judges, can not be evaluated in the context of the previous or subsequent periods due to the then accepted rules of the game. But that's not all. Presidential Decree issued on 22 November 1993 was not publicized. The original was stamped with "for internal use" stamp, well-known to archivists. This is why for such a long time there was no information about it contents. And only when there arised a need to organize an attack on Baturina, the decree was brought into the light.
Yet, according to the Russian legislation, including that effective in the transition period from 21 September to 24 December 1993 when the old parliament had been declared illegitimate and was forcefully dissolved and the new one had not yet held a single meeting, by law any presidential decree came into power only starting the moment of its publication. Furthermore, information on land rights can not be classified at all. Consequently, Yeltsin's decree, which by a stroke of a pen gave the farmland over for the needs of the Foreign Ministry, is, to put it mildly, controversial.
Land redistribution bloody clashes
Years passed. Restructured Matveyevskoe solved its problems with the shares for former state farm workers on it own. Head of Odintsovo District Aleksandr Gladyshev took too long to issue a resolution. Although all the formalities were settled in 1992-94, Gladyshev spent another two years paying no attention to the restructured entity. By 1994-96 out of 1,833 hectares of the former state-owned collective farm only about 600 hectares were left to set up shares for the workers. Procrastination of the district head can be explained quite easily: starting in 1992 he ensured that two thirds of Matveyevskoe's land are no longer treated as agricultural and gave the land to all kinds of development agencies that already at that time were able to understand how lucky they were to get these plots of land in the prestigious district of Moscow region.
The remaining land was distributed among 851 shareholders, with personal certificates issued to every single one of them. Shareholders, however, had no idea about the shares they owned for as much as 7 more years. Certificates of the so far ghost shareholders were in circulation, which was immediately followed by a series of terrible things that began to happen around Matveyevsky. In 1996, Nikolay Dubovsky, the collective farm head, was shot on his way to work in his own car. In 2000, Victor Babynin, his successor, was shot at the door of his apartment. In 2000 JSC Matveyevsky was headed by Nikolay Kyrin, which proved to be even worse for shareholders than the murders that happened during the land distribution. (http://open-letter.ru/letter/49416/ http://wap.gazeta.ru/social/2010/08/30/3412970.shtml )
When in 2002 federal law "On the trade of land" came out, it canceled all previous interim orders and decrees, which, under unclear status of the land, could have lead to major problems in court for some owners. Land became more than just territory; it turned into most liquid commodity. Therefore, Kyrin decided not to wait for the next killer and to sell all the land to prospective buyers from agricultural leasing company. By the way, Rosagroleasing owned by the notorious Elena Skrynnik outbid Agrokchim from Lipetsk with Aleksandr Fomitchev as the board director, who in Odintsovo district was known as Foma, the leader of the local gang. Foma, possibly involved in murders of Matveyevsky leadership, did not dare to face such an influential organization and chose to lay low for a while.
In 2002 Kyrin held a meeting of shareholders during which he urged them to sell their shares 5 rubles apiece. Kyrin managed to convince the gullible shareholders that it did not give the purchasers the right to own the land itself. As a result of fraud each shareholder received $ 30-60 thousand for his or her 200 hundred square metres. At the same time, the price of land in Matveyevsky was already more than $ 30 thousand per one hundred square metres. Deceived employees of JSC Matveyevskoe signed the paperwork and thus have no grounds for lodging complaints. Especially for the above mentioned shareholder meeting Gladyshev issued a decree that terminated the rights of land ownership for shareholders of Matveyevsky.
However, there were still about a hundred shareholders who considered the idea with doubts from the very beginning. The first thing they did was to ask Kyrin why was it that they were informed about their ownership in the last minute. Then they addressed the prosecutor’s office seeking cancelation of the decree issued by Gladyshev. This proved successful and Gladyshev returned the remaining shareholders their rights. However, this was where it all came to a standstill.
Failed Rublevka farmer
Now it is not clear what happened to the agricultural leasing company after all the schemes of Odintsovo latifundium oligarchs. But it is known that in 2003 Inteko holding owned by Baturina bought part of the land for Setun Hills construction directly from CJSK Matveyevskoe. The total area bought ran up to approximately 50 hectares.
TD Setunskaya, established to manage the 24.4 hectares intended for later development, was immediately subjected to judicial attack from Rosimushchestvo, the Federal Property Management Agency. In 2004, the ministry tried to prove in court that these acres belonged to the state. Not to shareholders of Matveyevsky farm, not to the CJSK Matveyevskoe, but only to the state. It was such a clumsy wording that it should have been very easy for the judge to rule the case in favour of Baturina.
Elena Baturina pointed to the simple fact that the federal registry of lands, referred to during the sales, states the exact cadastral number of the land plot. Rosimushchestvo for its part provided the alleged proof of state ownership over the site, with different plot size. Disputed territory did not even match in size in claims of the two parties to the conflict. In addition, Ministry representatives insisted that the 24.4 hectares plot includes the 16.4 hectares intended for the construction of the diplomatic corps. A quick look in the registry refutes the argument. Then, without waiting for an unfavourable court decision Rosimushchestvo rushed to stop the litigations.
Probably the most strange thing in the Odintsovo lands story is that only 55 hectares of all Matveyevskoe lands ended up in the hands of Baturina's company. The remaining 750 hectares amounting for 86.4% of Matveyevskoe were bought out by Roman Abramovich on 1 October 2004 though Millhaus Capital. The oligarch rushed to announce that he would become a great farmer and invested 25 million dollars in breeding activities of the farm.
In fact, Abramovich already was the owner of an agricultural holding. His Prodo ran a number of entities in Moscow region and Volga River basin. The entities were engaged in manufacturing meat products. However, as expected, the first thing the governor of Chukotka region did was use former Matveyevskoe land for construction. In 2006 he allocated 26 hectares of the farm's land to build an elite business school, an early predecessor of the future Skolkovo. A little later another 3.5 hectares were allocated to build a clinic, an elite clinic with patient rooms a size of an average Moscow two-bedroom apartment for each patient. (http://ohu.ru/news/?id=8059&cpn=2 http://www.odintsovo.info/news/?div_id=21&id=7600 ) Finally, in 2008 Abramovich's plans to build a large mention on the lands in Odintsovo for his fiance Daria Zhukova cought the public eye.
Abramovich and his funny looking care for breeding and preserving local cattle species became the first or at least one of the first landowners in Rublevka elite residential area. For instance, in 2008 Aleksandr Shokhin, president of the Russian Union of Industrialists and Enterpreneurs, bought nearby land at the price of 700 rubles for hundred square metres and explained this purchase by his desire to preserve forests in Moscow region.
Skolkovo: above the law
Baturina and Abramovich had no mutual claims about disputable lands. However, it did turn out that Abramovich was not a nice neighbour. When in August 2010 Baturina's spouse found himself in the eye of an emerging storm, Abramovich took the side of Luzhkov's opponents.
In early July 2010 Prosecutor General Yuri Chaika launched a new Odintsovo land litigation in Trerskoy court of Moscow. Arguments remained the same and were based on the decree signed by Yeltsin. The area of disputable lands, however, increased. Chaika realized that Boris Yeltsin in his decree was talking not only about the 16.4 hectares plot mentioned in the trials six ears ago, but also about a 38.4 hectares plot. TD Setunskaya never saw any increase in its territory, though. Not a single acre. All that happened was that Yuri Luzhkov commissioned TD Volynskaya to construct a residential complex next to Setun Hills. It was this project that brought about violations of law which in 2004 were out of the picture.
Already at that time Baturina knew what was going on and who was behind all this, so she addressed the one who launched the whole lawsuit and violation thing – that is, President Dmitry Medvedev. She pointed out that her company was a bona fide purchaser. Moreover, in the period between the fist and the second lawsuit no party expressed any other claims for the property against Inteko or TD Setunskaya.
This was when the most powerful argument for Baturina's lawyers came about: expiry of the limitation period. This period is well known to last 3 years. Yet, as noted by experts, a duly compensation could be enough to move Baturina out of the way for the sake of government interests. At that time such a compensation would amount to at least $160 million. O course, paying such an amount of money to Baturina was out of the question.
It is possible that argument over Odintsovo land could become one of the reasons behind the attack on Luzhkov as a politician. It is interesting that, as an ally of Medvedev, Abramovich did not face deprivation of lands in the framework of a criminal case against Kyrin over unlawful seizure of Matveyevsky shareholder property. In August 2009 the case was closed due to the absence of elements of a crime in his actions. This was self-explanatory. All these years Kyrin headed the farm and worked for Abramovich, the new owner of the place.
Abramovich was left alone in this argument over land not only because he had a lot of obligations before his ally Dmitry Medvedev. It also was because of Skolkovo, the favourite progect of the President. A total of 78 hectares of perfect land was allocated fot the innovation centre by Gloria Ltd headed by Marina Goncharova, who was also president of Abramovich's charity fund Polyus Nadezhdy (Russian for “Pole of Hope”). The procedure for seizing lands from Millhaus differed drastically from how it was planned for Baturina and her property. Abramovich received all his money back, to the very last cent.
Most curious fact is that Matveyevskoe shareholders, who time and again held protest rallies requiring compensation for land they had been deprived of, were not talking about all the lands of the former collective farm. During the protests they only cared about the land plots used for the innovation centre, the nano-dream of Medvedev. It turned out that the law for Dmitry Medvedev in this situation proved to be in compliance with the saying “one law for the rich, and another for the poor”. http://newsru.com/finance/06jul2010/skolkovo.html
High profile raiding
Then the events came thick and fast. Having achieved nothing through court, Prosecutor General Yuri Chaika sent an official letter to the President suggesting an audit targeted at the executive branch agencies in Moscow and Odintsovo district in Moscow region. President reacted as expected. He ordered to launch a probe into the lawfulness of the deal on land sales near Setun river and, if any irregularities are spotted, to follow the probe by the relevant prosecutor's actions. Time period for the probe was set strictly; auditors had to finish by 15 December.
The fact that the presidential order was not carried out all the way through proves it to be yet another nail in the coffin for the then mayor of Moscow Yuri Luzhkov. When the crisis was over, Yuri Luzhkov was dismissed from office and there was no need to continue attacks on the business his wife had.
In June 2011 Elena Baturina won the longstanding litigations over land. Among arguments that were voiced in court there were the same ones, including limitation time and wrongful application of Yeltsin’s decree. In October 2011 it looked like Dmitry Medvedev was willing to lend a helping hand to Baturina as a gesture for reconciliation. He intervened in the argument over land and ordered Prime Minister Vladimir Putin and the new Moscow mayor Sergey Sobianin to hold liable Moscow officials who allowed the situation with privatisation of lands intended for the embassies. Baturina was glad to see this happen and rushed to thank the President, hoping to avoid losing the lands for good and get compensation.
However, she failed to follow the footsteps of Abramovich in this case. Her words had a sensational effect, unrelated to land seizure business. All analysts were busy gossiping about her only in the light of State Duma elections of 2011 and the upcoming 2012 elections. This was the only framework that the analysts considered her words in. In her statement she claimed that Medevedev had nothing to do with Luzhkov's dismissal. Medvedev, however, did not http://www.newsinfo.ru/articles/2010-09-20/item/738483/#mce_temp_url#.
There was no cancelation of the 2010 retrospective decision of Rosreyestr, Fedral Agency for maintaining registries, that changed the category of these lands from farmland to commercial facilities. Moreover, in early 2012 Rosimushchestro officials fired a new lawsuit at Baturina. In March situation seamed favourable, but by June 2012 Baturina lost the lands along Setun river. Appeals she filed to casation and arbitration courts were in vain. In seeking land seizure, court judges considered even most absurd arguments by Rosimushchestro representatives, including those that stated missmatch in land size in the registry by as little as 8 santimetres.
It is clear that in carrying out such “controlled raider attack” against Baturina's business, Medvedev's group found itself in quite an ambiguous situation. This attack clearly has all atributes of raider activities including introducing changes to the state registry of land. However, it may entail similar problems for the aggressors themselves. When time came, Baturina was charged with unlawful activitied conducted by other people and received no compesation what so ever for the seized property she had paid a market price for. Yet, in the attack against Baturina the current Prime Minister was forced to do a showdown. Since it proved so easy to seize land from Baturina claiming they had been intended to host the embassies, it could entail a new spin on the case against Kyrin over land now given over to Skolkovo, the apple of Medvedev's eye. Or maybe all this would bite back at Medvedev some day…