UPDATE: Investigators launch case on driving VIM-Avia to bankruptcy

(Adds details in fifth, sixth paragraphs)

MOSCOW, Oct 17 (PRIME) -- Russian investigators have launched a criminal case on deliberate driving airline VIM-Avia to bankruptcy, the Investigative Committee said in a statement on Tuesday.

“The Volga Region’s transport investigative directorate has launched a criminal case over the fact of deliberate driving of airline VIM-Avia to bankruptcy,” the statement read.

According to the investigators, the management of VIM-Avia signed deals in 2016–2017 that were obviously unprofitable for the company, withdrew assets abroad, and ordered accountants to change financial reports to cover mounting debts to creditors.

The deals led to great financial costs and inability of the company to fulfill creditor demands. For instance, some contracts with foreign companies did not state the exact sum of the deal, which resulted in payments of the Russian airline soaring manifold. The lack of funds to redeem debts led to attraction of loans amounting to many billions of rubles, and top managers of the airline ordered accountants to cover up the payables in financial reports, the statement read.

Deputy Prime Minister Arkady Dvorkovich said in an interview with Rossiya 24 television channel that VIM-Avia will go bankrupt if it does not find any investor fast.

“If they don’t find an investor who is ready to buy the assets fast, the company will undergo a usual, normal bankruptcy procedure,” he said. On October 4, Dvorkovich said that three Russian companies were interested in buying the airline.

VIM-Avia is currently in a difficult financial situation, with its payables estimated at around 10 billion rubles. The airline delayed a large number of flights since mid-summer to September 25, when it said it had no money to continue operations and had to stop charter flights. The government and Aeroflot pledged financial support to VIM-Avia.

(57.0861 rubles – U.S. $1)

End