Court Nixes Auctions for Moscow Region Land

The tenants of Moscow region land along Rublyovskoye Shosse who rented the land two years ago for kopeks may lose their rights to it, but no one is making any claims on Roman Abramovich's land.

The 10th Appellate Arbitration Court canceled the results of two auctions held by the Moscow Region Forestry Administration at which the rights to lease forest plots in the Moscow region were sold, the Federal Anti-Monopoly Service said in a statement.

The rights to lease 69 forest plots, with a total area of about 991 hectares, for 49 years should have been sold on Dec. 18-20, 2007. The starting prices, calculated by typical regulations that didn't take into account the favorable location of the land in the elite district of the Moscow region, were very attractive — less than 1,000 rubles (about $35) per 100 square meters (the market price was $5,000 to $10,000).

Nor did the auction see much competition: Applications to participate in the auction were accepted on only one day fr om 10 a.m. to 2 p.m. "We stood in line from 6 in the morning but didn't manage [to get the applications]. People were invited according to a secret list," said Vitaly Kuravlev, of company Vorontsovka-15, who tried to bid for one of the plots.

The scandal started even before the auctions. On Dec. 13, the Moscow Arbitration Court ordered that the auctions be halted because of a suit from one of the inhabited forest districts. Nevertheless, the first auction was held Dec. 18, and the rights to 22 plots, totaling 490 hectares, were sold off.

Following intervention by Environment and Natural Resources Minister Yury Trutnev, auctions for the remaining 501 hectares were not held Dec. 19 and 20. The rest of the auctions were held in March 2008. "In completely secret conditions, 20 to 30 people were let into a small [auction] hall. Only one or two organizations bid for each lot. The maximum was three bids per lot, and some of them [5 percent] went on the first bid," one of the winners said.

In June of the same year, the Federal Anti-Monopoly Service said the regional forest authorities had violated the law on competition by lim iting the number of applications it accepted. The service stopped registration of the lease agreements through the Moscow Arbitration Court and sued to have the results ruled invalid.

Now that the service has won in an appellate court, the decision goes into force as law. Since the auctions were declared void, the rental agreements should be dissolved, said Vladimir Yefimov, head of the regional anti-monopoly service.

The Moscow Region Forestry Administration and the lessees could not be reached for comment.

The decision concerns only auctions that should have been held Dec. 19 and 20. The biggest plot, 397 hectares in the Istrinsky district, was won at an auction on Dec. 18 by Eko-Vest, controlled by Abramovich, for 24.4 million rubles (about $830,000), or 614 rubles per 100 square meters.

Among other winners were Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, who got two hectares in the Odintsovsky district; Olga Smorodskaya, president of the Novoye Pokolenie foundation, with 0.66 hectares; and actress Yulia Rutberg, with 0.2 hectares. The anti-monopoly service has no claim against this auction, as no one has complained that his or her rights were violated at this auction, Yefimov said.