Moldovan president aims to return Chisinau airport to state ownership after Rothschild deal

Moldovan president aims to return Chisinau airport to state ownership after Rothschild deal
Moldova's main international airport in the capital Chisinau.
By bne IntelliNews August 22, 2019

Moldovan President Igor Dodon called an urgent meeting of the Supreme Security Council on August 21 to look into the sale of Avia Invest, which holds the 49-year concession for Chisinau International Airport. 

Dodon summoned the council two days after Nathaniel (Nat) Rothschild reached an agreement to take over 95% of Avia Invest through his Guernsey-registered investment vehicle NR Investments for a reported $200mn. 

The president called the 2013 concession agreement a “criminal decision” by the previous government, and asked the Ministry of Economy and Infrastructure and other state institutions to prepare information related to the transaction. In a strongly worded statement published on the presidency’s website, he called the concessioners a “group of crooks” and listed wrongdoings at the airport including smuggling and allowing criminals to escape from the country. 

The upcoming security council meeting “will discuss the risks for the state related to this transaction and the solutions for restoring the airport to the state management,” according to the president. 

There are enough legal grounds to terminate the concession contract signed with Avia Invest, Dodon added in an interview with Radio Free Europe.

“The presidency’s position since the time the concession agreement was signed, a position that I heard is shared by the incumbent government as well, is that the legislation and procedures were violated,” Dodon explained. Moreover, there are reasonable grounds to believe that the money invested for some repair works, pledged under the concession contract by the airport operator, are derived from frauds in the banking system, he added.

All these reasons must be put on the table and they are sufficient to cancel the concession agreement, Dodon concluded.

Cyprus based Komaksavia Airport Invest Ltd, founded by Moscow resident Modris Karklinsh and legally represented by controversial Moldovan businessman Ilan Shor, was reported as the owner of 95% of Avia Invest ahead of the transaction with NR Investments, while the final beneficiary of the company was not known. Shor is mentioned by the Kroll investigations as the visible beneficiary of the $1bn bank frauds that surfaced in 2014-2015 and resulted in the bankruptcy of country's largest three banks and a public debt of around 12% of GDP. 

Under the terms of the contract, Avia Invest must invest €244mn in the development of the airport and pass 1% of the revenues to the Moldovan budget. By the end of 2018, the concessionaire had invested €87mn.

Commenting on the change in the ownership of the airport operator Avia Invest, Dodon said that this makes no difference.

“If there are violations — and there are — then the state must do its best to return the state airport under its own management faster, not at the expiration of the 49-year term,” Dodon said.

The concession contract for Chisinau Airport is already being investigated by a parliamentary commission headed by the MP Igor Munteanu. He recently stated that the Prosecutor General's Office will start a criminal prosecution against those who prepared and signed the contract.

According to Moldovan daily Noi.md’s commentary, Shor planned the sale of the company to allow him to avoid confronting the new authorities in Chisinau about the circumstances under which the concession contract was signed. 

Despite being issued an initial sentence for his involvement in the $1bn bank frauds, Shor was at large in Moldova until the change of government this summer. An associate of the country’s former political leader, oligarch Vlad Plahotnuic, he served as the mayor of Orhei, and was elected as an MP at the head of his eponymous party in the last general election. 

However, when Plahotnuic’s government was finally ousted by an alliance between Dodon’s Socialists and the pro-EU ACUM alliance, both Plahotnuic and Shor are understood to have fled the country. 

 

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