Petropavlovsk says audit discovers troubled deals worth $302 mln

MOSCOW, Jan 14 (PRIME) – KPMG has uncovered U.S. $302.4 million worth of dubious deals struck by Russian gold producer Petropavlovsk Plc and its subsidiary ore producer IRC Ltd in the three years prior to August 2020, Petropavlovsk said in a statement on Friday.

The investigation was launched by 84% of shareholders on August 10, 2020, when CEO and founder Pavel Maslovsky was dismissed from his position.

The Tverskoi District Court of Moscow arrested Maslovsky’s assets in December 2020. Investigators believe that the defendants in Maslovsky’s case stole over 95 million rubles of assets from Petropavlovsk in 2018.

KPMG uncovered inflated costs of mining licenses through pre-acquisitions; transactions with the entities related to Petropavlovsk and IRC’s senior management; expenses paid by the group potentially to the benefit of entities related to the senior management; the former group investment where monies or value may have been diverted to the benefit of entities related to the senior management; and other transactions of potential concern.

The report does not make any conclusions, but uncovers clear patterns of inappropriate behavior and points to possible flaws in corporate management in the period.

The company said quoting Chairman of the Board of Directors James Cameron Jr that the report should draw a line under the flaws in the corporate governance that may have allowed some people within the company to benefit from the corporate operations personally.

(74.5686 rubles – U.S. $1)

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