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Defense Ministry Accused Of Illegal Land Sales

An investigation into the illegal sale of military-owned land authorized by sacked former Defense Minister Anatoly Serdyukov has been opened by the Chief Military Prosecutor's Office, Kommersant reported Monday.

The allegations concern around a 140-hectare piece of land in the Krasnogorsk region near Moscow. Given to the ministry in 1999, the area was used as an ammunition depot by the military until 2011, when it was to have reverted to the Agriculture Ministry.

Rather than being returned, twenty three plots of land were advertised, with the sanction of then-Defense Minister Anatoly Serdyukov, on the defense ministry's official site in 2011 and then sold at below market value in two separate auctions in October 2011 and May 2012, prosecutors said, basing their case on materials received from the Audit Chamber and Interior Ministry.

The Audit Chamber estimated that the state lost about 2.8 billion rubles in the two auctions.

Prosecutors said the two purchasing companies, Promresurs and Partner-Kapital, might have been acting on behalf of billionaire Suleiman Kerimov's investment vehicle, Nafta-Moskva, and Promsvyazbank, one of the country's largest privately owned banks.

Nafta-Moskva said it owned the 50-hectare plot, but that half of it was waterlogged.  A company source said Nafta-Moskva did not win the auction but bought the land from a company affiliated with Promsvyazbank. The bank said it had nothing to do with the auction.

Serdyukov's lawyer Genrikh Padva said his client had not been questioned regarding the case.

Serdyukov was dismissed from his post by President Vladimir Putin last October amid allegations of embezzlement by Defense Ministry supply contractor Oboronservis.

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