A court on Tuesday extended the detention of Sunrise owner Sergei Bobylev, whose computer and appliance retailer ran what it called Europe’s largest hardware store, in a major fraud investigation that arose after a dispute with the company’s creditors.
Bobylev’s case is the latest in a string of recent crackdowns on the owners of major retail chains, including Yevroset and Arbat Prestige.
Investigators accuse Bobylev of siphoning assets from the debt-ridden Sunrise to other firms. An investigation was opened in February after complaints were filed by several Sunrise creditors.
If convicted, Bobylev faces up to 10 years in prison.
Nelli Dmitriyeva, the police investigator leading the case, requested that Bobylev come in for questioning at the Main Investigative Directorate of the Moscow police on Monday, and he was subsequently detained.
Police decided to seek Bobylev’s arrest because he had actively resisted the investigation by destroying evidence and threatening witnesses, a police spokeswoman said Tuesday.
Moscow’s Tverskoi District Court postponed a ruling on the arrest until Friday but agreed to extend his detention. Prosecutors and defense lawyers declined requests for comment.
A spokesman for Sunrise, Alexei Baklanov, told The Moscow Times that the case against Bobylev was fabricated to evict the company from the spacious premises it rents in central Moscow.
“We tie all our problems to the actions of Mikhail Dvornikov, a former owner of Savyolovsky [electronics retail] market,” he said. “We rent space for our biggest store at the Stankolit site from his mother, Emma Dvornikova, and his people are trying to throw us out.”
The statements concerning Mikhail Dvornikov have since found no confirmation or evidential base.
Baklanov said Sunrise has spent $15 million on new pavilions and infrastructure at Stankolit, a vast store at the market, north of Savyolovsky Station. He said Sunrise’s business partners would complain to the presidential administration, the Investigative Committee and the Federal Security Service about the legality of Bobylev’s detention.
“He is a great business strategist, and without him our company will have to go through really hard times,” Baklanov said.
Established in 1992, Sunrise has expanded to about 100 stores in more than 40 Russian cities. The company says on its web site that its Stankolit store is the biggest computer hardware hypermarket in Europe. The store was closed last week on investigators’ orders, Kommersant reported Tuesday.
According to expert estimates carried in the Russian media, the company had sales of more than $650 million in 2007.
The retailer’s problems began last fall, when several Sunrise suppliers and banks filed lawsuits seeking more than 700 million rubles ($27 million at the time). Among them was a Moscow-based company called EAA Asset Management Consulting.
The head of the EAA Asset Management Consulting, Alexei Samoilov, told The Moscow Times that he legally represented Emma Dvornikova.
Samoilov denied that EAA Asset Management Consulting LTD was behind the crackdown on Bobylev. He said his company bought Sunrise’s debt for rent payments from Emma Dvornikova, which amounted to 100 million rubles ($3 million) as of July and that Sunrise was not paying any rent.
Baklanov, of Sunrise, said Tuesday that he could not confirm the amount of the debt but that Sunrise and Dvornikova had reached an agreement earlier this year that a certain part of the monthly rent payments would be postponed because of the economic crisis.
He added, however, that the agreement was not properly documented.
Samoilov said his EAA Asset Management Consulting, created last year, planned to buy the Stankolit site from Dvornikova but that the deal was frozen when Sunrise started transferring assets to another creditor, Alfa Group.
“I was receiving threats from Bobylev and Alfa people, and I was beaten last week,” he said. “And I understand that as easily as I was beaten, I could be buried dead.”
Samoilov said the acquisition of Stankolit would be his company’s first real estate deal in Russia.
Alfa Group was among Sunrise’s creditors, demanding 30 million rubles ($1.2 million) last fall. Samoilov said that according to his information, Sunrise’s actual debt to Alfa Group was about $30 million.
“Now, Alfa owns it all,” Samoilov said.
Alfa Group’s investment arm, A1, has taken over Sunrise’s retail chain and the brand name, Vedomosti reported earlier this month.
A1 did not respond to a request for comment Tuesday.
Baklanov said A1 owned 75 percent of Sunrise but not the brand name.
Editor's note: This article was corrected in October 2014 to reflect that the involvement of Mikhail Dvornikov in this case has never been proved.
Lidia Okorokova and Alexander Velikanov contributed to this report.
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