News 17th November 2016

St. Petersburg politician arrested on suspicion of Russia 2018 stadium fraud

The Investigative Committee of the Russian Federation has arrested the former Vice Governor of St. Petersburg, Marat Oganesyan (Марат Оганесян) on suspicion of embezzling 50 million rubles (€723,500) through a fake contract to supply video screens to Krestovsky Stadium. The stadium is being built to host 2018 FIFA World Cup games and will be the home of Zenit St. Petersburg after the World Cup.

In a statement, the Investigative Committee alleges that Oganesyan, who supervised the construction of the stadium, ‘arranged the illegal involvement of the joint stock company “TDM” as a subcontractor. Later, Oganesyan organised an advance transfer of more than RUB50.48 million, which was later stolen by shell companies. Oganesyan obviously knew about the absence of intention to spend the cash received on the supply of screens for the stadium.’

The Investigative Committee said that the general contractor for the stadium, engineering firm Transstroy (трансстрой) had also been involved with the awarding of the contract. Its statement said that Alexander Ancic (Александра Янчика), a former Deputy Chairman of the St. Petersburg Construction Committee is also under investigation, as he signed the documents relating to the transfer of the money to TDM. Grigory Popov (Григория Попова), the head of TDM, is also under investigation as well as two company employees.

Russian Minister for Sport Vitaly Mutko, who is also a FIFA Council member, Chairman of the local organising committee and a former Zenit St. Petersburg Chairman, said that the construction of the stadium was now being closely supervised by a new team. ‘If someone commits some kind of forgery or embezzlement, then of course, these people will be punished”, he told RT. “But this business has no relation to the current stage of the stadium’s construction. There is a new team there, a new general contractor.”

There have been eight worker deaths during construction of the stadium, the most recent being in October this year, according to Building and Wood Workers International (BWI). ‘The site has been wrought with a number of problems including lack of payment to workers, delayed work and discrepancies in financial spending resulting in the then general contractor, Transstroy, being fired by St. Petersburg City Hall’, read a statement.

On 25 July, Transstroy reportedly issued a statement to say that city authorities had failed to pay RUB1 billion (€14.4 million) for construction work, and downed tools, after which their contract was terminated. In August, a new general contractor, Metrostroy (Мосметрострой), reportedly agreed to complete the stadium, which was originally scheduled to be completed in 2008. The Investigative Committee added that its inquiry is continuing.

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