Report: Antitrust says some Russian defense firms hide losses

MOSCOW, Dec 18 (PRIME) -- Financial directors of some Russian defense companies hide losses from the shareholders, creating illusion of stability, Igor Artemyev, director of the Federal Antimonopoly Service, said in an interview to Oborona Rossii (Defense of Russia) magazine published on Wednesday.

“Today defense industry companies have no strategies aimed a cost cutting and improvement of operating efficiency, with very rare exceptions. Besides, financial directors have learned tricks with financial reports to hide losses from the shareholders and from the state, creating illusion of stability,” Artemyev said as quoted by the magazine.

The growth of costs in some defense companies exceeds possibilities of the federal budget, which leads to big debts and the lack of prospects for development.

“That is why the defense industry needs system-wide reforms aimed at changes of the baseline motivation of management…and at stimulation of inflow of private investment,” he said.

End