RBC-Ukraine continues to study the facts of Ukrainian business cooperation with Russia after the start of the full-scale invasion.
Also, from publicly available data, it became known that in 2022, the company Interpipe-M in Russia generated revenue from sales amounting to 131.6 million rubles, declared and paid 36 million rubles in income tax. And right now, they are trying to sue Interpipe company from the UAE for about 50 million US dollars. More details on how this is possible during the war are covered in this material.
The company Interpipe in Ukraine is a conscious and patriotic business. It condemns Russia’s full-scale invasion, and arranges the Ukrainian pavilion at the Davos forum. At the same time, for many years, the company has been operating in the Russian market and earning hundreds of millions of dollars from it.
In mid-July, a message appeared on the Interpipe website in which the company refuted its alleged cooperation with Russia.
Interpipe under no circumstances and in no format operates in the Russian market. The series of publications in biased and unscrupulous media on this topic is unreliable and initiated by dishonest competitors with the aim of causing harm to the company’s business reputation as a leading national manufacturer of steel pipes and railway products,” the message stated.
Indeed, on the eve of the published refutation, some anonymous Telegram channels briefly mentioned information that Interpipe continues to work with Russia even after the large-scale invasion of Ukraine. However, no specifics or facts regarding the cooperation itself were provided.
The only facts in favor of “cooperation” with Russia were that in 2005, the supply of pipes produced by three Interpipe plants (Interpipe NIKO TUBE, CJSC Interpipe Novomoskovsk Tube Plant, and CJSC Interpipe Nyzhnodniprovsk Pipe Rolling Plant) was stipulated by an intergovernmental agreement between Ukraine and Russia. Additionally, top managers of Interpipe were either Russian citizens (Oleg Rosenberg and Fadi Hraibi) or managers directly linked to Russia. For instance, Josef Marx has been leading Interpipe since February 2022, previously heading Moscow offices of consulting firms The Boston Consulting Group and Roland Berger Strategy Consultants. These statements are accurate, but they might not necessarily confirm that “Interpipe” is currently conducting business in Russia.
However, after investigating Interpipe’s activities in Russia following the large-scale war, such claims no longer seem speculative.
Indeed, after the Russian Federation’s invasion in 2014, very little changed for Interpipe. For instance, both 2017 and 2018 were highly successful years for the company in Russia, with revenues reaching around $200 million each year.
It is logical to assume that after February 24, 2022, Interpipe had definitively ceased its operations in Russia. However, the facts turned out to be somewhat different.
Even after the beginning of the large-scale war, Interpipe continued to generate revenue, declare profits, submit reports, and pay millions in taxes to the Russian budget. It even filed lawsuits against itself.
Subsidiary company
Virtually all divisions of Interpipe belong to the Cypriot company Interpipe Limited, which, in turn, is owned by another Cypriot company — Interpipe Holdings PLC. Through a series of offshore entities in Samoa and the British Virgin Islands, Interpipe Holdings PLC is owned by Viktor Pinchuk. This ownership structure can be confirmed through the ownership structure of the Interpipe group of companies, which Interpipe itself provides in every tender on Prozzoro.
The company Interpipe-M registered in Russia, as of December 31, 2022, is 99.99998% owned by Interpipe Holdings Plc, which is owned by Viktor Pinchuk.
Therefore, in Russia, Interpipe is represented by the company Interpipe-M. RBC-Ukraine entered the company name in the service for checking contractors, www.rusprofile.ru (which obtains data from open state registers of the Federal Tax Service of Russia and found out that LLC Interpipe-M has an individual tax number (INN) 7728560106, is not in a state of liquidation, and is registered at the address: “123112, Moscow, Presnenskaya nab. 10, fl. 13, room III, com. 6A”.
The founder is the already familiar Company Interpipe Limited, Cyprus. Registration number NE170535. RBC-Ukraine compared it with the number provided in the ownership structure of Interpipe and confirmed that this is indeed the Cypriot company of Viktor Pinchuk and that LLC “Interpipe-M also belongs to him.
At the same time, the following is of greater interest: does Interpipe-M continue its operations after the start of the full-scale aggression? Is it receiving funds from the aggressor after the start of the full-scale aggression? Is it paying taxes to the aggressor’s budget after the start of the full-scale war? What other operations are being carried out by Pinchuk’s companies in the aggressor country?
Activity in Russia
How to determine if a company is conducting activity? Firstly, check the information from the Unified State Register of Legal Entities of Russia (EGRUL). According to the EGRUL extract with the seal of the Federal Tax Service, LLC Interpipe-M is registered, not in the process of liquidation, bankruptcy, or dissolution, and as of February 14, 2023, the company is headed by the General Director, a citizen of the Russian Federation, Andrey Vladimirovich Vorobiev.
For the year 2022, LLC Interpipe-M submitted financial statements. The statements are publicly available. Using the same website www.rusprofile.ru, you can access the “state information resource of accounting (financial) statements, from which you can download the financial statements with the seal of the Federal Tax Service of Russia.
Millions to the Russian budget
In 2022, already after Russia’s invasion of Ukraine, the revenue of the company Interpipe-M from the sale of goods in the territory of the Russian Federation amounted to 131.66 million rubles. For the year 2022, Interpipe received almost 72 million rubles in net profit in Russia.
And most importantly, according to the results of 2022, Interpipe paid nearly 36 million rubles in profit tax to the budget of the Russian Federation. And continues to pay in the current year.
It is also notable that the report for the year 2022 was submitted in the year 2023. Interpipe transferred the taxes to the Russian budget in the year 2023.
In June, Interpipe-M paid 2,483,438 rubles of income tax for May and an additional 24,662 rubles as value-added tax (VAT). VAT is only paid in the case of selling goods or services.
For the period from April to June 2022, Interpipe-M paid 858,439 rubles of VAT to the Russian budget.
Also, an analysis of the business activities of the company Interpipe-M in Russia indicates that it did not actually cease its commercial operations in Russia.
Interpipe-M continues to pay rent for the office, telephone communication services, document handling, security, software maintenance (including the Glavbuh system), and calculates salaries and bonuses for its employees.
In April of this year (more than a year after Russia’s full-scale invasion of Ukraine), Interpipe-M paid for services related to researching price levels for transfer pricing purposes.
Transfer pricing is the sale of goods or services between related parties at intra-company (usually lower) prices. Transfer pricing occurs when goods and services are sold between related companies. Why would the Russian company Interpipe study transfer pricing if Interpipe itself “does not operate in any form in the Russian market”?
3 billion rubles to Russia by court decision
On November 7, 2022, Interpipe-M filed a lawsuit against another company within the group — Interpipe M.E FZE (UAE), which was previously involved in supplying sanctioned goods to Iran. It’s worth noting that according to the Consolidated Tax Report (mentioned above), both companies are 99.99998% owned by Interpipe Holdings Plc.
So, essentially, the “left hand” (in Russia) is filing a lawsuit against the “right hand” (in the UAE) and is attempting to recover 2,957,434,042 rubles (almost 3 billion) through the court. This amount, at the time of filing the lawsuit, equates to approximately 50 million US dollars. Interpipe paid a court fee of 200,000 rubles for filing a lawsuit of one of its own companies against another.
Based on the indicators of the financial performance of Interpipe-M and the amounts of the company’s accounts receivable and accounts payable (balance sheet), the almost three billion rubles that the Russian company Interpipe is trying to recover from the Emirati company will be counted as profit, and therefore income tax will also need to be paid on them.
RBC-Ukraine has directed relevant questions to the press service of Interpipe in Ukraine. Specifically, they inquired whether Interpipe Holdings PLC exercises control over the activities of LLC Interpipe-M in Russia, whether Interpipe Holdings PLC received dividends from the Russian company LLC Interpipe-M for the years 2021 and 2022, why Interpipe Holdings PLC did not withdraw from the founders of Interpipe-M after the start of the full-scale invasion, and whether Interpipe Holdings PLC plans to withdraw from the founders or completely liquidate this company.
Originally posted by Oleksandr Khyshchenko on RBC-Ukraine. Translated and edited by the UaPosition – Ukrainian news and analytics website
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