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Something has changed for management of Russian authors’ society

First of all the procedural status of Sergey Fedotov, CEO of Russian authors’ society (RAO), has been changed – he is under arrest. But this fact would not stop the operation of RAO, there are two more persons, who can make decisions and “act on behalf of legal entity without entrusting” under current Russian law – Vera Fedotova, mother of Sergey Fedotov and the first deputy of CEO, and Krichevsky, the second deputy of CEO.

Sergey Fedotov is charged in participation in scheme resulted in material damage for RAO – about 500 million roubles. The maximum term of imprisonment is 10 years. Actually the arrest was organised very accurately – first of all the main CEO’s “partner”, its first deputy, is free and secondly – it was made in summer, when almost everyone is on vacation. It is assumed that in 2012 Fedotov has misled authors’ council concerning the purposes of one of the RAO’s affiliate’s establishment. Few years ago RAO established closed stock company “Service-operational company” (SEK). This company received on its balance some objects of real property and cars. And then these assets have been sold illegally, as believe enforcement authorities. Ex-CEO of SEK, Maksim Budanov, has testified against Fedotov. Prior its appointment as CEO in SEK Budanov was responsible for household issues in RAO.

During interrogation and face-to-face meeting with Fedotov, Budanov explained that Fedotov gave instructions to establish SEK and transfer certain assets on its balance. Fedotov’s lawyer stated that Fedotov did not manage day-by-day operation of SEK, he has authorised to do it his partner, which is in confrontation with him. Money, received from sale of these assets, has been spent on creation of electronic system providing transparency of allocation and distribution of collected royalties. Certainly, Fedotov denied all charges. He did not agree with them. All these charges are based on testimony of one person – Budanov. Enforcement authorities asked the court to put Fedotov under arrest due to certain reasons. He has investor visa for UK, so he could leave Russia and escape liability, he also could pressure witnesses he knows. The court agreed with these reasons. Fedotov’s lawyer proposed 5 million roubles as deposit and received refusal. Prosecutor also agreed with court.

Fedotov’s lawyer stated that Fedotov is not guilty; he is victim of slander of his partners. “Transactions, which have been made, are all legal, they have all financial reasons”, – explained Fedotov’s lawyer. The names of these partners lawyer promised to reveal later. In court Fedotov stated that he is ready to cooperate with enforcement authorities. His lawyer also stated that Fedotov has no passport; therefore he is not able to leave Russia despite the UK investor visa. Besides, as lawyer believes, there is not corpus delicti in available materials. While Fedotov is under arrest and is not able to control all RAO’s operations personally, his first deputy will do it. Vera Fedotova has the right of signature under Russian law and RAO’s statute. RAO works as usual and generally.

The members of authors’ council of RAO asked (1,2,3,4) attorney-general and chief of Russian ministry of internal affairs to mitigate the measure of restraint for Sergey Fedotov. The letter asking about this has been signed by 16 members from all 23. They also asked to inspect the legal reasons of Fedotov’s arrest. They also do not agree with position of enforcement authorities. Decision to establish SEK has been adopted by authors’ council under relevant rules and procedures. And they also do not agree that establishment of SEK caused material damage for RAO. Russian famous director, Nikita Mihalkov, and Fedotov’s business partner also is ready to file motion to mitigate the measure restraint for Sergey Fedotov. Mihalkov also admitted that there could be infringements in RAO’s work. The measure of restraint could be more humane. Mihalkov underlined that he never worked in RAO and did not have and does not have any relation or connection with it.