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Nizhniy Novgorod
While the Krasnoye Sormovo Shipyard has been privatized,
it remains subject to state policies regarding military and civilian production
promulgated by the Russian Shipbuilding
Agency.[1] As of February
2001, 33.52% of its shares are held by
the state (25.5% by the State Property Ministry and 8.02% by the Russian
Federal Property Fund), 52.27% are controlled by the United Machine Building Plants (UMBP,
previously known as the Uralmash Plants, Russia's largest mechanical engineering conglomerate,
which controls the Izhorskiye
Zavody Stock Company), 8.02% belong to shipyard workers, 4%
are owned by Polet-NN (a closed joint stock company which reportedly has
ties to the Nizhniy Novgorod governor and shipyard managers),
and the rest belongs to other stockholders.[2,3] There is currently an investigation going on regarding
the legality
of UMBP's purchase of 10%
of Krasnoye Sormovo shares. This transaction effectively put the shipyard under
the control of UMBP.[4] A conflict over control of the shipyard began in 1999; for more information,
see the developments section below.
Nikolay Sergeyevich Zharkov
One (shut down)
The Krasnoye Sormovo Shipyard (formerly Shipyard
112), established in 1849, was responsible for the construction of second
and third generation Charlie-class SSGNs, Victor-class SSNs,
and Sierra-class SSNs, in addition to Tango-class and Kilo-class
diesel submarines.[1] From 1967 to 1980, Krasnoye Sormovo produced
for the Soviet Navy 11 Project 670 Charlie Is, each housing eight
short-range tactical cruise missiles, and seven Project 670M Charlie
IIs, carrying longer range cruise missiles.[2] Some reports note
that Krasnoye Sormovo built a total of 25 submarines, some of which were
completed at Severodvinsk.[3] In 1993, submarine construction at
Krasnoye Sormovo was terminated, and, in 1994, the shipyard was privatized.[1,4]
Workers at Krasnoye Sormovo are receiving wages on time, since shipbuilding
orders guarantee work through 2002. In May 1999, the shipyard launched
the first of five oil tankers ordered by the Soviet-Finnish-American Transportation
Company (SFAT); the second tanker was launched in February 2000, while
the third is scheduled to be launched in May. Each tanker costs about
$9 million.[4,5] SFAT has also ordered the reequipping of four oil
barges at the shipyard. In March 2000, Krasnoye Sormovo agreed to
construct five Rossiya-class dry cargo ships for a German company.[7]
Several small civilian ships are in production. Construction of several
ships originally intended for the Russian military, which had been suspended
due to lack of funds, was eventually completed, and the ships were sold
to China.[4] As of March 2000, work on completion of the Varshavyanka
diesel submarine continued. The shipyard plans to sell it to China
for $100 million. The shipyard has already sold the Chinese two submarines
in the past three years.[6] Nevertheless, as of March 2000 the shipyard
is only working at one-third capacity.[8]
6/12/2002: CHINA TO BUY EIGHT
KILO-CLASS SUBMARINES FROM RUSSIA
Russian sources have said that China
intends to buy eight Vashavyanka-class [NATO name 'Kilo'] submarines from
Russia. The deal is reportedly worth $1.6 billion, and all the boats are to
delivered within five years. Preliminary reports have five of the boats
scheduled to be built at Admiralteyskiye Verfi, two at
Amurskiy Zavod, and one
at Krasnoye Sormovo. Krasnoye Sormovo has already completed two-thirds of the
hull of the first ship. The purchase of these submarines calls into question the
future of the the Chinese Song-class submarine program.
1/2001: BENDUKIDZE'S PURCHASE
OF ADDITIONAL 10% OF
SHARES QUESTIONED
In December 2000 the United Machine Building Plants
(UMBP), owned by Kakha Bendukidze, bought 10.68% of
Krasnoye Sormovo shares. As a result, the group owned 52.27% of all
shares.[1] For nearly one month, shipyard management was not aware
of this purchase. When the information became public, it caught the attention of Sergey
Obozov, the chief federal inspector of Nizhniy Novgorod Oblast. According to him, a preliminary investigation revealed several
facts that raise legal
concerns about the deal. Tax authorities, the antimonopoly directorate, and the
FSB are also examining the purchase.[2] UMBP Advertising and Information
Director
Andrey Onufriyev expressed his surprise over the attention to the deal. He stated that all federal requirements were strictly
fulfilled.[1] Some observers believe that Obozov may drop
charges against the conglomerate in exchange for UMBP support
in a future campaign for governor of Nizhniy Novgorod Oblast.[3]
11/2000: KRASNOYE SORMOVO CONTRACTS GUARANTEE
STABLE WAGE PAYMENTS
Krasnoye Sormovo signed a
20
million ruble (about $700,000 as of 27 November 2000) contract with the Urals
Heavy Machine Building Plant, a part of the UMBP group, for the manufacture of
oil drilling equipment.[1] If Krasnoye Sormovo
successfully masters the production of oil drilling platforms, it may receive
contracts from the UMBP group worth up to $6 million.[1] The group already
has orders for more than 50 such platforms and UMBP management wants to
move some of the production to Krasnoye Sormovo.[2] UMBP contracts could then make up 30% of Krasnoye Sormovo sales.[1] In 2000, the enterprise
manufactured eight ships. Contracts require
the enterprise to complete the refitting of five dry-cargo ships into oil
tankers by 20 April 2001. As of late 2000, a stable flow of orders has allowed Krasnoye Sormovo to maintain
financial stability and pay relatively high wages to its workers on a regular basis.[3]
9/2000: BENDUKIDZE GETS TWO
MORE SEATS ON KRASNOYE SORMOVO
BOARD OF DIRECTORS
At a Krasnoye Sormovo shareholders meeting on 27 September 2000,
shareholders changed the rules under which the board of directors is formed. According to the
previous rules, three out of nine seats were occupied by state appointees
and one seat automatically went to the enterprise director. The United Machine Building Plants
group (owner of 42% of Krasnoye Sormovo's shares) was only able to claim two seats.
Under the new rules, the UMBP group will appoint four members of the board, two members will be appointed by Krasnoye
Sormovo itself, and the
Russian Shipbuilding Agency, the State Property Ministry, and the Russian
Federal Property Fund will appoint one member each. These changes became
possible after Kakha Bendukidze, the owner of UMBP, agreed not to attempt to buy out the state-owned shares and a two-year moratorium
was imposed on the sale of
those shares.[1,2,3] The sale of the state-owned shares was opposed by
Sergey Kiriyenko, the presidential representative to the Privolzhskiy
federal district, because the state would lose its
ability to block decisions made by other shareholders.[4]
3/2000: FIGHT TO CONTROL KRASNOYE SORMOVO MOVES
TO COURTS
Kakha Bendukidze, director of the Urals Machine-Building
Plant (Uralmash, which owns 35% of Krasnoye Sormovo), has promised to take
his fight for control over the shipyard to court. Despite controlling
35% of the shipyard stocks, Bendukidze's firm only has two of the nine seats
on the Krasnoye Sormovo board of directors. Shipyard regulations
allow four board members to be appointed by the state, thus preventing Bendukidze from increasing his representation on the board. According
to Bendukidze, this violates Russian laws concerning joint stock companies.[1]
Bendukidze charges the Nizhniy Novgorod administration with blocking Uralmash's
plans and soliciting bribes. The regional administration denies both
charges, stating that shipyard workers and management are leading the fight
against Uralmash.[3] Bendukidze says that he will invest about $20 million
in Krasnoye Sormovo and bring the shipyard orders for oil platforms once
he increases his representation on the board, while Nizhniy Novgorod officials
charge Uralmash really wants control over other lucrative shipyard projects.[2,4]
The Antimonopoly Committee has already approved the unification of Uralmash
and Krasnoye Sormovo, should Uralmash obtain the necessary shares.[3] Bendukidze's
final attempt to change shipyard regulations at stockholders meetings was
brought to a halt on 15 March 2000 when Polyet-NN (owner of 4% of Krasnoye
Sormovo's shares) sued to stop the holding of another shareholder meeting.
Uralmash is preparing its own suit in response.[1]
Page last updated 1 May 2001
Comments or questions? Contact Cristina Chuen at MIIS
CNS: Cristina.Chuen@miis.edu
This material is produced independently for NTI
by the Center for Nonproliferation Studies at the
Monterey Institute of International Studies and
does not necessarily reflect the opinions of and has
not been independently verified by NTI or its directors, officers,
employees, agents. Copyright © 2002 by MIIS.
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