Subsidized enterprise brings billions of profits to owners

Is it any wonder?

Shareholders of the Rostov plant “Rostselmash”, that produces combines and other agricultural equipment, for the first time in 20 years received dividends from their enterprise and thereby attracted the attention of the anti-corruption committee of the State Duma of the Russian Federation.


The dividends in the amount of 2.7 billion rubles will be distributed evenly among the three owners: the head of the Director Board Konstantin Babkin, as well as his associates Yuri Ryazanov and Dmitry Udras. Each of them owns exactly a third of the company’s shares.

Previously, Konstantin Babkin shared his impressions of his work success in the blog:

“When government policy is favorable, investing is more fun. <…> The annual dividends of the company ranged from 0 to 350 million rubles. All these years, the enterprise, although it went through a series of crises along with agriculture and the entire Russian economy, has been generally profitable”.

Allegedly, he intended to spend this profit both on the modernization of existing facilities and on the opening of new industries, in particular, a factory manufacturing zinc white.

The revelations of the Director Board chairman about the favorable state policy, which in the future gives him hope even for a tax cut, are not a mere fantasy. The fact is that only in 2019, Rostselmash, at the request of its management, received financial support from the state in the amount of 6 billion rubles.

The State Duma representatives, while commenting on this situation, were surprised at the spending of budget subsidies that are supposed to support the industries suffering from the crisis. But in our opinion, there is nothing supernatural in this scheme.

After all, venturing and developing any kind of production, the “shareholders” care primarily not about its future and not about the benefits that it can bring to society, but about their own profit. Therefore, having received a «carte blanche» from the state, first of all they will think about their pockets, and only then about everything else, including the degree of legality of their financial fraud.

The laws of the capitalist state work exclusively in the interests of «those in power». Therefore, one should not expect that the destiny of big capitalists will teach them any lessons.