Some factory directors who say they are out of cash are hiding billions in income from the Tax Police, Economics Minister Alexander Shokhin said Friday.


Shokhin told the State Duma that companies are getting rich through Russia's so-called cash crisis, and called on the public prosecutor to take legal action.


Shokhin said a cash-short oil firm investigated by his ministry had 9 trillion rubles in debts, but continued supplying oil to the same debtor companies for years. One of the firm's debtors was a company consisting of just one person, and others were foreign, Shokhin said. "We find that some oil companies supply oil to firms that consistently never pay, often for years," Shokhin said.


"This suggests to us the idea that these are not accidental debtors. It suggests that these are firms that can hide income from the Tax Police, from the state."


Russia's arrears crisis, or krisis neplatezhei, has left employees at many major plants unable to collect their salaries, often for months on end. The problem has often touched on the ridiculous, with staff being paid with merchandise -- sewing machines, bottles of wine or tampons -- because the company has no cash.


A recent government report, summarized Sept. 29 in The Moscow Times, concluded that factory directors who complain they cannot pay their bills often have billions in their plant's rubles tied up in investments.


Viktor Gerashchenko, chairman of the Central Bank, told the Duma that the arrears problem is not the result of tight monetary policy. He said firms are putting more money into loans and deposits.


Shokhin said the arrears problem is partly to blame on shaky or bankrupt banks that bog down inter-company payments. And he noted that some cash-short companies make no attempt to retrieve their unpaid debts. "It's obvious that many companies don't want to be paid on time," he said.