The Kirovles Case. Court Video Recording. Hearing 6

Please be seated

and we will continue the court hearing.

Consideration of the criminal case against Navalny and Ofitserov.

Court hearing.

The parties are present,

and the witnesses Fedotov, Chernykh, and Sergeyev are present.

A witness has been brought in.

The other witnesses have not appeared at this time.

Court hearing.

The witness is invited into the courtroom.

Fedotov repeated the list of witnesses once again.

Fedotov, Chernik, and Sergeyev are present.

Brought in under escort.

Please step up to the stand and stand up.

Good afternoon.

FEDOTOV Alexei Nikolaevich.

When and where were you born?

[inaudible] year, in July, and...

Where were you born?

Vologda Region?

In your turn.

Ethnically Russian.

Citizen of Russia.

Your education? Higher education.

Marital status?

Married.

Where do you work, and in what position?

Supply Director

of the joint-stock company [inaudible].

What is your residential address?

Where are you registered?

Perm, Perm Krai?

Solikamsk, Malaya Street, building six

one.

That is where I am registered.

You have been summoned to court for questioning as a witness.

I have explained to you that, in accordance with the procedural code,

it is your civic duty and obligation to tell the truth in this case.

I explain that you have the right to refuse to testify

against yourself, your spouse,

and other close relatives, if you choose to testify.

I warn you

that your testimony may be used as evidence in the case

even if you later refuse to testify.

You also have the right to testify in your native language,

or in a language you speak, and to use the services of an interpreter.

To file motions, and to lodge complaints about actions or inaction.

By decision of the court, to appear for questioning with a lawyer.

To request protective measures if necessary.

And I warn you that

in the event of an unjustified refusal

to testify, or of knowingly giving false testimony,

criminal liability may arise under Articles 308 and 307 of the Criminal Code

of the Russian Federation.

Do you understand your rights and responsibilities?

Yes, I understand.

Please sign an acknowledgment to that effect [inaudible].

Do you have any grounds for refusing to testify?

No. Please answer the prosecutor's questions first, and then the defense counsel's.

Alexei Nikolaevich,

please explain whether you know the defendants Ofitserov and Navalny.

No, I do not know them.

Do you bear them any ill will?

No, I do not.

Please explain.

In 2009, where did you work, and what position did you hold?

Well. I worked, and still work,

with Aleksandr Brom as director

of supply since 2008.

So, the same position that you hold now.

What kind of

business does your enterprise engage in?

The production of paper products on a large scale,

primarily newsprint.

Anything else besides paper production?

Well, there are also related products, of course. Also

within your enterprise's operations.

What raw materials do you use, and where do you purchase them?

Our main raw material is

softwood timber.

Mainly this is pulpwood

with a diameter of up to 18

centimeters.

Because this is the cheapest raw material,

since it is cheaper than saw logs and so on.

That is what I mean.

In 2009, as indicated, the raw material

was purchased by us.

We also had our own logging operations.

We harvested about 800,000 tons.

In Perm Krai, we received it

by rail and by road

and from Sverdlovsk Region,

Udmurtia and Kirov Region

we received it as well.

As far as you now remember,

which enterprises in Kirov Region did your company work with?

In particular, were there contractual relations with KOGUP Kirovles?

Well, in Kirov Region we had

some several dozen

contracts with enterprises,

including

Kirovles.

There was a contract.

As far as you know, what were the terms

for the supply of timber products, and what was supplied?

Specifically by KOGUP Kirovles?

As with everyone else, the prices and terms

were the same throughout Kirov Region.

That is,

we paid, well, as was customary, in advance.

That is, all the terms were roughly the same.

Then we proceeded on the basis that we paid for the products in advance.

Besides that, we also

well, at our expense, paying the rail tariff with our own funds,

essentially in that way.

Alexei Nikolaevich, in 2009

regarding the supply of timber products from Kirov Region,

did you have contact with the administration of the Kirov Region government,

in particular with Governor Belykh?

Yes, I did.

At the beginning of May.

For introductory purposes, so to speak?

It was a visit.

By the Governor of Kirov Region,

including to our enterprise.

In more detail

Please explain: who informed you about this trip?

Did you have a conversation directly with the governor?

What exactly did she say?

At the beginning of May, the governor visited our company.

in Kirov Oblast, at the enterprise, because he and our manager

Viktor Ivanovich Baranov, the president

of our company, knew each other as

deputies of the Legislative Assembly of Perm Krai.

And. At the beginning

of May 2009, that is, the governor was

at our enterprise, and there was a conversation

in the president's office,

during which, well,

at which we essentially familiarized him

with the conditions under which we operate

in general

with Alexander

regarding raw material supply, and not only in Kirov Oblast,

but also the fact that we have our own

logging operations, that we have a plan.

There were still timber reserves left.

Very few companies have that now.

And?

The terms of supply from Kirov Oblast, in particular,

were discussed, but the discussion was only introductory in nature.

No specific details were discussed.

And also roughly

at that time

in Kirov Oblast overall per year

we were receiving around 250,000

cubic meters of timber.

That is,

if we were to look at the longer-term prospects, then it would have been possible to increase

supplies from Kirov Oblast further

using various modes of transport.

It was also possible to consider river floating; in Soviet times

timber from Kirov Oblast used to be floated down the rivers.

And also roughly

by rail.

The same could also be considered

by road transport as well.

Roughly speaking, for us approximately.

We said that in the future it would be possible

to consider another 1,050.

Why not more?

At that time, it was simply that roughly

no, no, raw material supply was not straightforward.

Well, we could have taken more too.

But because

this transportation component,

was getting more expensive year after year, so overall,

it was one of the most expensive types of supply

by rail from Kirov Oblast to the mill, by rail.

Therefore, increasing those supplies was considered last, so to speak.

First

of all, increasing logging volumes was considered.

Specifically,

our own logging operations and, accordingly, timber supply

of that kind.

That is, supplies of timber itself, supply from logging operations.

Then after that Perm Krai, then

Sverdlovsk Oblast, local sources somewhat closer logistically.

And only after that.

Kirov Oblast, if at all.

Have I fully answered your question, then?

More than thoroughly.

Alexei Nikolaevich, during the introductory conversation,

as you explained, did the governor voice any specific proposals?

Regarding

interaction with any other enterprises in Kirov Oblast?

No specific proposals were made.

And as I understand it,

the governor was just getting a general overview.

Of our enterprise and the overall situation

in that way.

For familiarization

with the company and the TV channel, the governor came alone.

Or was someone from the Kirov Oblast government with him?

Well, I can't say right now.

He was alone; Viktor invited me, and no, there were basically three of us, three.

Did there come from the Kirov Oblast administration?

And after the conversation between the governor and the president, did he send

any written proposals, or

any letters of an informational or recommendatory nature?

Well, following up,

most likely,

on that conversation,

at the end of May

a letter arrived at the enterprise Semeinye Svyazi.

From the Kirov Oblast administration

of an informational nature, saying that work was underway,

that it was envisaged, as it were.

Such steps as organizing,

possibly, procurement sites

within Kirov Oblast, and

other options were also being considered,

including the use of the Kama River.

The work could be continued.

Well, by road transport there, as it were,

the transportation cost component was already increasing.

In principle, that was also being evaluated, but,

overall, those were the general directions that were outlined.

It was an informational letter.

Who signed that letter?

By a representative, an adviser.

The governor's adviser, Navalny.

Did that letter mention

any enterprises, any company names?

KOGUP Kirovles,

that, in principle, there was such an enterprise,

which is hard for me to recall exactly now, but

KOGUP Kirovles and the Vyatka

Timber Company were mentioned.

Subsequently, were there any supplies from

the Vyatka Timber Company to Solikamsk?

Well, as I already said,

the letter was informational in nature.

Well. The letter was passed to me.

By the president.

Since it relates to my area of responsibility.

And I, basically, we discussed that with him.

Specifically.

Its nature was more

informational and perhaps even, so to speak, a matter of etiquette.

There had been a meeting, and this was a kind of follow-up.

So to speak.

A kind of courtesy letter, as if to say that the work was ongoing.

There were no specifics.

Therefore, for us,

at that time we had a contract with Kirovles, and we continued working under that contract

as before.

And on other issues, as regards

water transport deliveries,

also understanding how complicated that issue was,

previously an entire institute worked on this with us, and

industry-specific organizations, and so on,

and larger, more capable organizations.

That is, it was clear there that the issue was more

theoretical.

So to speak.

As for actual deliveries, there were, at least,

difficulties in Kirov Region.

Very serious ones.

The same applied to distance and

road transport.

To the border of Kirov Region it is about

some 350 kilometers (about 217 miles) from our enterprise.

Even in winter.

Using crossings and so on,

that haul distance already

well, makes the timber very expensive,

with that transport distance for the enterprise, accordingly.

That's all, thank you, Alexei Nikolaevich, Your Honor, he did not answer.

There were no questions.

It just sounds strange. May I ask a question?

Probably—what?

Alexei Nikolaevich, please tell me, am I correct in understanding

that Solikamsk Bromine is the largest enterprise

in the pulp and paper industry in the Volga Federal District?

But there is also Volga, Volga.

Well, I mean, well, if you put it that way, then

roughly on the same level, you could name even larger ones.

So am I correct in understanding

that for enterprises that supply

several grades of timber, including pulpwood, primarily for sample—

well, unprocessed or minimally processed wood,

the key consumers are pulp and paper mills

and, in particular, Solikamsk is one of the key customers.

And please tell me, in 2009

what characterized the timber market?

Were prices rising or falling, had the crisis hit, were there many customers or few,

Well, let's put it this way, to a certain extent,

if we are talking about supply.

Demand was higher.

Than supply.

To some extent.

Well, there we also

in principle, the situation was already changing,

so that it was leveling out somewhat.

Well, that is, there was the crisis that year, timber prices fell,

then by the end of the year they started to rise,

but at the beginning of the year they were lower on average because of the crisis.

I can't say for certain right now, because every year

the situation there is different.

Not exactly.

It depended less on the 2008 crisis and more, probably, even on weather conditions.

Because in 2007

there was practically none of it, and prices rose sharply.

And here, already sometime in 2009, they fell a little,

then started rising again, a kind of back-and-forth.

But would it be correct to say that, since overall sales of

timber had fallen, of course all enterprises that had a lot of pulpwood

were extremely interested

and were lining up to sell you their products.

Well, let's say there were no actual lines, not literally.

But, in principle, at that moment we

somewhere around 2.5

250,000 from Kirov Region; we were at 2,000.

Approximately, well.

We received overall, well, that was not the largest figure.

We used to receive 400,000.

The purpose of the trip.

BELYKH's was.

Is it correct to say that, in general, the purpose of his trip was

for the enterprise

to purchase more timber in Kirov Region, in order to help

the enterprises located in Kirov Region?

This is connected with the fact that since you buy,

you set limits: here we will buy this much, there we will buy that much,

as you just said,

we were ready to buy 250,000 and were ready to increase the limit by another 50,000.

Not in terms of quotas

it was introduced when we

already had enough, so to speak.

So to speak.

The imported volume was limited.

So there was quota-setting, and that was, by and large, the enterprise's decision.

We could raise the quota here, lower it there.

And naturally, the governor was interested in your raising the quota

specifically for the Kirov direction, for Kirov Region.

And possibly.

And please tell me, does it often happen that

a governor of some region comes to an enterprise?

No, well,

this was rather a unique case,

especially from another region.

The governor of another region came in order

to help enterprises located in his own region.

And he came there

also because they had some kind of informal ties with

President Baranov; they had served together as deputies in the legislative assembly of Perm Krai.

Well, most likely that was the reason overall.

Can it be considered that his trip was successful from the governor's point of view,

because he achieved an increase in the quota,

the quota was, in theory, increased by 50,000 cubic meters.

Well, we didn't actually increase it. Well.

In theory, but in practice we did not buy more either.

But in theory, generally speaking, were you ready to buy?

And in that sense

can it be said that Belykh was satisfied with the results of his trip?

Was everyone satisfied with the result?

Well, here, most likely, it was like this:

we already had such terms

for procurement and so on.

They had been discussed and set out with all suppliers.

Perhaps in some respects our terms

did not fully meet the requirements.

But also, speaking of supplies from Kirov Region,

because.

Well, take 2009.

As far as I.

Remember, prices there really were already falling, and then started rising again.

Therefore, here

to say that—what?

We could have increased the quota.

Well, still,

Theoretically, yes, it was a theoretical discussion, but,

nevertheless, some kind of basic understanding was reached.

That is, in principle, on suitable market terms,

[he] was prepared to increase the quota for the Kirov direction. Right?

Most likely, yes, if that had happened.

Now please tell me, from an economic standpoint.

Please tell me, in your opinion,

did it turn out in practice that the quota was not increased?

So you did not start buying more?

It seems they made the trip, but in the end, it turned out to have been somewhat pointless.

Well, there were no practical consequences.

Moreover, at this point we do not buy anything in Kirov Oblast at all.

You are not operating in Kirov Oblast at all now, because the transport-related

component of the cost increased during that time by as much as

almost twofold in 2008.

Now tell me, in that connection, do you think that

the regional governor ended up in a somewhat strange, perhaps even foolish position,

because he traveled to Perm, to Solikamsk,

there were all these lengthy negotiations, and in the end there were no deliveries at all.

So in that sense, well, it was a bit odd.

That was still the feeling.

Well, to be honest, in that sense, it makes no difference to me.

But from the standpoint of growth, because we constantly

in our work assess

the market in terms of these

more practical categories: price,

volume, and so on.

Now please tell me, when assessing the governor's actions

in this case, please tell me, a witness here testified,

the company director, the former director of the state enterprise KOGUP Kirovles, Opalev.

And in response to my statement that

he was in fact ready to increase the purchase quota and was prepared to buy

from you at a normal price, he said: "We knew nothing about that."

And in general, for us this is some kind of astonishing mystery.

So, essentially, what were they supposed to do with Kirovles?

And any buyer, if they wanted to

supply timber to you, what steps were they supposed to take?

Well, everything here was determined by market conditions.

If demand exceeds supply, then simply selling the product to us

and simply calling, giving you a commercial offer

at an acceptable price, reaching an agreement and delivering the product, correct?

So they did not have to do anything extraordinary, they did not have to do anything special.

But did they do that or not?

Well, most often we ourselves,

so to speak, if we are talking about that time.

Let's put it this way: I came here

or my employees came here

throughout 2009 and 2010.

And 2011.

We ourselves went there, traveled there, and no actions,

generally speaking, were taken to increase deliveries.

It was not as though anyone was saying, "We really wanted to sell to you,"

but they were not buying, and our price was good.

But they did not increase the quotas.

Is that a correct statement or not?

Well, speaking specifically about Kirovles,

if I am to explain it now, then

we, so to speak,

had better contact with all the other organizations, which also, of course,

operate on a commercial basis, pursuing, naturally, their own

goal of making a profit.

There are many of them here in Kirov Oblast,

if I may name them, Dyukov and others.

There are indeed many of them.

So Kirovles was difficult to deal with.

That is the important point.

So, to be clear, overall you were buying 250,000 cubic meters, which is quite a lot.

And you were buying it from other producers.

But cooperation with Kirovles went worse.

Can it be said, would it be correct to say that

well, I am not asking you to evaluate Kirovles's work,

but that things went somewhat worse with it than with commercial enterprises?

Because Kirovles was generally disorganized?

Well, to a certain extent,

I also cannot really assess their terms

in relation to someone else; perhaps with others they worked more

efficiently from an economic standpoint.

But for us, generally speaking,

well, that was even more apparent.

Well, and using both formal and informal letters and phone calls,

we worked with all the other enterprises in Kirov Oblast more than with Kirovles.

All right. Thank you very much.

Please tell me,

after you received that letter you mentioned.

Were there any further actions?

Did anyone call, from Vyatka Timber Company itself,

from Kirovles, or from the regional government, insisting on concluding a contract

specifically with Vyatka Timber Company or with some other company?

Were specific companies named, saying the contract had to be signed with them?

No, there was no such contact.

There was contact with the administration and with representatives

of Vyatka Timber Company.

There was nothing beyond that.

Perhaps you know from someone, from the company president,

from other employees, that, for example, I called and insisted,

or expressed any proposals or wishes, or anything of that sort? No.

You mentioned that you continued working under the contracts as they had been concluded.

That is, you kept working under those same contracts.

That is, did anyone ask you, perhaps, to terminate some contracts and re-sign them?

No, our contract was concluded

at the beginning of 2009, and we worked here under that contract.

That is, from 2009 onward we had a contract with Kirovles.

It remained as it was until Kirovles ceased to exist,

and no one ever proposed re-signing it, terminating it, or somehow

changing the terms.

No, well, at that time we had contracts at the end of the year before entering into a new one.

All right.

Thank you very much to the working group.

It simply needs to be assessed.

Please tell me, what were the payment

terms in the contracts?

What was the payment arrangement?

Was it advance payment only, or payment after delivery?

Upon delivery.

You paid then?

Well, some time was taken to process the documents,

because, well, timber is one of those things

that the sender measures.

And the recipients of the cargo may measure it differently.

Therefore

that is usually standard practice.

Usually, upon arrival, we had about 10 days for paperwork.

Plus a little more, and...

Payment, well, approximately, I do not exactly

remember now, to be more precise, simply

you paid for the delivered timber roughly within a certain number of days after

it had been delivered to you. Approximately, we...

But I am not saying that with certainty.

When there was a shortage, we could even pay in advance.

But there were such instances.

Well, that was standard practice, yes.

One question: Do you remember whether Solikamsk

Brom had some debt to Kirovles?

In 2009.

year.

I clearly remember that we had friction

with Kirovles over payment.

The friction was of this nature: the contract there had been concluded with the director,

while the consignors were, as it were, different parties.

So that was a mismatch, right?

So these documents

we could not accept until they sorted all of that out internally themselves.

And in that sense there was a certain misunderstanding.

There were errors in the documents.

There were, too.

That is, we

kind of

contacted them repeatedly, so there was no need for a formal letter.

And what then?

Get the paperwork in order, and payment can be made.

We cannot pay on the basis of these documents

once again.

You could not send it.

The money for their deliveries?

For one simple reason.

The KOGUP (regional state unitary enterprise) could not properly provide documents corresponding to your company.

Correct?

Well yes, essentially the whole summer.

This issue was kicked around and shaken up

and sometime by autumn all the legal entities had settled things among themselves.

They settled up.

I see.

All right, and do you remember the difference? Was it a lot?

No, not now.

Well, I wouldn't really attribute that to the accounting records.

Well, over this issue, matters even went to court with other companies.

If the documents are not properly prepared,

the document has been submitted.

I absolutely agree with you.

One question.

You said that you bought on terms for the railcar.

Is that correct? Yes.

One question.

Alexei Nikolaevich, you?

And why did you not reimburse the suppliers

including delivery to the railcar and loading into it?

And paid them? After all, they had incurred those costs beforehand.

But it was предусмотрено that all of that was included in the price.

Do I understand correctly that, since you were buying on a railcar basis,

that means all expenses up to delivery to the railcar,

as well as loading into the railcar, were included in the price, absolutely.

And so, again, once more, if someone happened to

incur expenses, plainly speaking, that means they incurred them

according to the agreement, because it was included in the price.

That's all, thank you.

I have a question.

Still, a question in connection with what you said.

Do I understand correctly that this rather strange

structure of KOGUP Kirovles, where the contract is concluded

with the head office, but the consignors are some other

entirely separate entities which, generally speaking, are not even legal entities,

interfered with normal business relations?

Well, generally speaking, we had friction precisely because of that.

On the grounds that

on the basis of the documents that had been prepared,

we essentially could not make payment.

So, in other words, you wanted to operate in accordance with the Civil Code?

You concluded a contract.

The consignors loaded it on a railcar basis, you bought everything that way, correct?

And these strange arrangements of theirs with a huge number of forestry enterprises,

with different consignors, you did not like that,

they interfered with proper accounting.

Well yes, because in the documents

the contracts were, as it were, concluded

with the director, and there had to be a power of attorney for the

consignor.

From the standpoint that everything had to be lawful.

Well. With documents like that, to sum up, one

asks a perfectly reasonable question.

Now, one complaint that many people made against KOGUP Kirovles

was that they did not have a proper accounting system.

You are confirming to us that they did not provide proper transaction documents,

since you said that you repeatedly

contacted them with letters asking them to put their documents in order.

Well, I cannot speak for their accounting system.

As for document flow, I

can speak to the fact that invoices, waybills, invoices

and other errors were of a different nature.

In some places the date was mixed up, elsewhere something else

as well.

Well, for example, now it's Perm Krai and Perm Oblast.

It says Perm Oblast, which also

appears in the documents.

And please tell me, given that Kirovles

and that its main product was pulpwood?

Accordingly, that was precisely the product you needed, and you

you and Volga were the largest consumers

while the Mari Pulp and Paper Mill was a much smaller consumer, if we exclude that client,

they were vitally interested in you; the life of the enterprise depended on it.

And nevertheless,

they could not prepare proper documents or handle deliveries properly, and so on.

In your view, what does that indicate?

Well, there are

such frictions, but in the end, we resolved everything with them and

then continued.

Working together, we had already become aligned with one another.

And in 2009 we worked together; there were regular...

Those deliveries did take place in 2009, because as for the contract, again,

no one ever asked to renew it; we did not work

under that contract when concluding the contract for the following year.

That is, a new one.

No new contract was concluded; the contract was concluded for 2010.

We worked in 2010.

All right. Thank you very much.

No further questions.

We

simply have no more questions for the defense.

Please tell me,

you answered the defendant's question

that the cost of delivery to the railcar and loading was included,

included in the price.

As I understand it, this was

standard business practice.

Do you know how that price was formed,

what was included in the price?

I cannot answer that or say what exactly it should have included.

Among the other costs borne by Solikamsk,

under bromine supply contracts, not just by the group, but generally,

and that is,

indeed, loading, the railcar, the departure station, and basically,

in some cases there were also separate payments.

In certain cases as well.

These turned out to be the most significant.

For major clients, payment of the rail freight tariff.

We are examining the Kirovles case.

So I ask you to answer the question: what is usually included in the price?

Is this included in the price, was it included in the price

did KOGUP build this into the price of timber products?

Do you know that or not?

I do not know that.

But in principle, we did not really have any other price.

And answer this as well.

You said that more often you traveled to other regions,

visiting suppliers.

Did you visit KOGUP Kirovles in 2009?

I do not remember exactly,

but I was there twice.

Could it have been connected

in some way with the governor's visit, after his visit to Kirovles?

Did you propose that they make deliveries, carry out shipments to your address?

They did not.

Our contract was concluded in 2010.

Go on.

We can allow that.

One more question, with your permission, in connection with this.

With the questions.

From the defense. To the witness.

Alexei Nikolaevich, please clarify: in response to the questions

about payment terms and delivery terms that the defendants asked you,

were you speaking only in relation to the company where you work?

That is, Minprom, or were you referring, in general, to contractual practice

across all enterprises?

Well. Essentially, as regards rail transport.

As for Solikamsk, that was indeed the practice.

For the most part, there are no questions.

We did not return to it; not a single question can be addressed.

Please tell us whether KOGUP Kirovles ever approached you

with demands or requests to compensate KOGUP Kirovles for expenses

related to delivering timber products to the railcars and loading the railcars? No.

So such issues never arose, whether as requests,

demands, wishes, or complaints.

Thank you.

We can continue.

And we object.

Defense counsel.

No objections?

Thank you, you are free to go.

Who is being called into the courtroom?

Chernik?

By the way.

Hello.

Hello. Please introduce yourself.

Sergei Pavlovich.

When and where were you born?

March 11?

So that it is

very simple.

Region.

Ethnicity: Ukrainian.

Russian citizenship.

Now.

Russian is his language, and he speaks Russian; an interpreter is not needed.

Municipality.

Higher education. Marital status.

Where do you work?

Director of the Kirov Furniture Combine.

What is your residential address?

Where are you registered?

101 Bolshevikov Street.

I live at 116 Kazanskaya Street.

That is all there. Markets. City.

You have been summoned for questioning as a witness,

and you have the right not to testify against yourself or your close relatives.

If you agree to testify, you are warned

that your testimony may be used as evidence in the case,

including if you later withdraw that testimony.

You have the right to testify in your native language or any language you speak,

to use the services of an interpreter free of charge, and to file motions,

and complaints regarding actions, inaction, or court decisions concerning your questioning.

You may appear for questioning with a lawyer.

You may request the application of security measures if necessary.

I also explain to you your civic duty and your obligation to tell the truth in this case.

And I warn you that in the event of an unjustified refusal to testify

or knowingly giving false testimony, criminal liability may arise

under Articles 308 and 307 of the Criminal Code of the Russian Federation.

Do you understand your liability?

Please sign to acknowledge this.

Are there any grounds for refusing to testify? No.

Answer the question.

Sergei Stepanovich, please explain whether you know the defendants Ofitserov and Navalny.

I do not know them personally.

Do you feel hostility toward any of them?

At present.

No. Please explain.

In 2009, where did you work and what position did you hold?

In that year I worked there as well, and I still do, as General Director of the Kirov

Integrated Wood Processing Plant.

Abbreviated as MGK.

Well yes, in Kirov, me.

Please explain.

What activities was your enterprise engaged in in 2009?

What products did it use for that?

At that time, there was production of sawn timber,

and kitchen furniture.

And we heat the settlement.

Now?

That is. For its operations

the enterprise used products,

raw materials.

Mixed materials

for the production of sawn timber.

This was very important for furniture production.

Birch veneer.

And for furniture production?

A whole list. Yes. Understood.

In that connection, did the enterprise have any suppliers, and did

KOGUP Kirovles fall within that group of suppliers?

Yes, it was one of our suppliers.

Did you have contractual relations with Kirovles?

Of course. We did.

As far as you remember, when was the contract concluded with...

Well, now I no longer...

remember; there were some dates there.

As of the beginning of 2009, it was in force.

I don't remember the details.

Well, all right.

Are you familiar with the company Vyatskaya

Timber Company?

Well, we used to work with Kirovles,

then we worked for some

short period of time.

Please, in more detail, as far as you remember.

How was the contract with Vyatskaya Timber Company concluded?

Who initiated it?

It changed; I don't remember anymore.

It's just that

I had an employee who...

handled the contract, he was.

It was prepared only for signature,

he said that there was.

Kirovles.

We would now work through this company

on the same terms that we had worked on with Kirovles.

The same terms—what is there to explain?

Delivery terms, price.

Did the director of Vyatskaya Timber Company visit your enterprise in connection

with this?

Well, to be honest, I don't remember.

What about any employees?

Specifically, Valery Ivanovich Bura from the commercial department.

To work.

Most likely? Yes,

because I personally was at Kirovles

and she came several times.

Did Bura introduce you to the director of Vyatskaya Timber Company,

Ofitserov?

As far as you remember.

I can't say for certain; I don't remember.

Subsequently, the contract

with Vyatskaya Company was concluded.

Did the prices and transportation terms change as a result?

No, the terms did not change.

The cooperation was short-lived.

For what reason?

As I recall,

there were no product deliveries, because the supplies stopped.

From the side of Vyatskaya Timber Company, the arrangement stopped working.

After they cut it back.

You still haven't answered. Was the contract concluded?

The contract was concluded.

After the contractual relationship

with Vyatskaya Timber Company ended, did relations with KOGUP Kirovles resume?

No, there were no offers, there were no supplies.

But the need to re-sign the contract

from Kirovles to the company—was that indicated to you by Opalev, the director of GUP Kirovles?

Did he call you about this?

I made Opalev.

A call... Was he aware of some of your former...

That is,

was he?

No specific questions were asked.

There were none.

Yes, you may.

Sergey Stepanovich, please tell us, you have

one of the major enterprises in the wood-processing industry.

How would you assess Kirovles's role in all this?

Could it be called a monopolist in the timber industry,

one of those enterprises that dictate prices and so on?

A monopolist—hardly, because prices...

They dictate them too.

Given its market volumes.

No, probably it simply doesn't fit those criteria.

And please tell us, on the one hand,

it seems to be a paradoxical situation.

They had 2 million of allowable annual cut,

more than anyone else in Kirov Region,

But nevertheless, on the market, as you said, they were not that strongly present.

What was the reason for that?

Well, I didn't conduct

an analysis of their market, that is, I didn't work with them closely.

What exactly was going on there?

Whether in management or in some other...

And did you ever have any, well,

not exactly problems in your relations with them, but situations where

you wanted them to make deliveries to you, and they did not?

That is, you were ready to buy timber from them, but they were not selling it.

That did happen.

But the demand was constant.

So if they had shipped in larger volumes,

would you have been ready to buy more?

I would have been ready to buy more.

And why do you think they didn't ship more?

I'm saying I don't know.

There was some internal problem.

Nikolai, please tell us,

the witness before you

told us here that there were constantly

some problems with contracts, with paperwork, and so on.

Did you have any difficulties in that respect with KOGUP Kirovles?

Well, at least, I don't recall any

problems in our relations.

Am I right in understanding that 2009,

after the crisis and during the crisis, was

especially in the first half of the year, characterized by the fact that

sales by producers

of timber products and suppliers of raw materials to you

for your company fell sharply, and prices dropped significantly.

Is that correct?

But that year, in the timber market,

the change had occurred even earlier.

It was short-term. There were problems

with sales, but the market recovered quickly.

You know, please tell us, this is a

strange situation.

They were supplying you with products,

then the products were supplied by Vyatskaya Timber Company,

and then the contract was terminated, and they stopped selling products altogether.

What could that be connected with?

Well, if there is no product, I can't force them.

No, well, that is, you have no...

You were ready to buy, but they were not selling it?

Well, yes.

At the same time,

according to many witnesses who testified here, Kirovles

had huge stocks of finished products, and the enterprise was

in a severe crisis and suffering losses.

In that situation, market logic suggests that they should have,

on the contrary, supplied you, if you were ready to buy.

They did not supply it.

Objection: do not lead the witness.

Do you know why KOGUP Kirovles did not supply

timber? No.

Well, after that,

after the contract with the Vyatka Timber Company was terminated,

was there some kind of ban, that you were not allowed to sell, or—

absolutely. You were not prepared to enter into a contract

with just anyone supplying you with products?

Our contract with Kirovles was not terminated,

with Kirovles it was not terminated, it was not terminated.

We simply started working with another supplier.

So, under the terms of the concluded contract

with Kirovles, which was not terminated, you entered into another contract

with the Vyatka Timber Company. For some time, the Vyatka Timber Company supplied

at the same time as Kirovles— the Vyatka Timber Company did.

Well, let me put it this way—I did not understand the nuances.

For some time, perhaps, there were supplies from two organizations in order to

maintain a balance.

The owner was supposed to handle everything. That was the situation.

And then, when supplies began through the Vyatka Timber Company,

supplies from Kirovles stopped altogether, and from that point on you no longer worked with them?

Yes. All right.

And please tell me, did you have the impression that this contract

with the Vyatka Timber Company was concluded under some kind of coercion?

Did he insist,

make demands, call, were there approaches made?

No, there was no coercion at all.

We simply decided that this was how we would work from then on.

That was the decision of the forest owner.

I do not know, I cannot speak for anyone.

I... You are questioning me.

Why did you decide to work that way?

But when the contract was terminated, that was it, and we could quite well have continued

cooperating with Kirovles, but it did not continue.

The contract was not terminated, it was not,

it remained in force, but there were no more deliveries.

Thank you.

Hello.

One moment, let me clarify right away.

Who are you talking about right now?

Did Opalev not tell you that there had been some threats,

pressure, that someone had forced him, that the contract had been concluded that way?

Have I understood you correctly?

You cut out. Just now, in response to the question

from Navalny, whether there had been any pressure to

re-sign the contract with VLK, you said, "I cannot get inside someone else's skin."

That is what you just said.

No, the question was whether I was aware of

why VLK had been proposed to you.

Well, that is—

it was the owner's decision, that is how he chose to operate.

How so? And that is why I did not press for clarification. Yes.

Sergei Stepanovich, have you heard, from Topolev or from any other persons,

directly or by rumor, formally or informally,

any information that the contract

between you and the Vyatka Timber Company was being concluded under coercion

or that it was necessary to cooperate with the Vyatka Timber Company

for reasons involving some kind of coercion, threats, or something else of that sort?

Like that?

Yes. Kirovles.

I have also known Opalev for a long time.

If they decided to work that way, then it must have been necessary.

I did not really check, I did not delve into that issue.

All right, thank you.

There was complete trust, there was complete trust.

If something had been wrong, he would have told you.

Well, at any rate, there was trust.

Once the decision had been made, I called, and they said that we would work

that way. That was all, I did not look into it any further.

Thank you for the sharp criticism, and good afternoon.

Hello.

Please tell me, under those conditions, when buying timber products, did you usually

agree on the suppliers' financial terms of delivery?

Well, usually with small suppliers, I paid only upon delivery,

and with larger ones, according to

market practice.

I generally tried not to pay in advance, if possible.

I see. And how was it more often, generally?

Upon delivery, in fact, after acceptance of the timber,

payment was made

after some period following acceptance and completion of the paperwork.

Yes, the volumes were agreed, the quality

was agreed, invoices were issued, everything was checked carefully.

I paid on time.

Well, a week—a week was fine.

And what were the delivery terms? Did you—?

I bought fresh timber, with delivery included.

Well, in rare cases I could not arrange transport.

For the most part, we bought with delivery to our site,

and the price included delivery, of course.

So, that means you did not make any separate arrangements with anyone?

So, for example, I buy

say, at 100 rubles to the mill site.

And all that business of running around the forest, assembling a truckload, loading it—

do I pay you separately for that, or is all of that included in the delivery price?

So if the contract terms, if the contract states

that delivery is to the buyer's warehouse, then—

then that a priori means that everything is included in it,

that is, all of the supplier's costs for collection, transportation, packaging, correct?

That is all, thank you.

Well, a follow-up right away.

Just clarify this with regard to KOGUP Kirovles.

Are you sure that is exactly how the price was formed?

That the transportation costs for delivery were included in that price?

How do you know that, and from whom?

Because I signed it.

The contract, the price.

I monitor the price. I see that the delivery terms are such, and the price is such.

I understood that you purchased at the price

that had been agreed on those delivery terms.

Correct?

Delivery, I just—

a clarifying question

to your question.

I will put the question to you as I did to Ofitserov.

Do you know how it was formed?

Were transportation costs built into it?

Specifically by KOGUP Kirovles

into the price at which they supplied you with the product?

KOGUP Kirovles managed its own costs in competition.

There is a market that sets prices.

The price in the forest

is one price.

The price in Kirov is another—that is what you look at.

How the supplier competes there, and how he controls his costs,

that is not my concern.

Why?

Please tell me, if the price of delivery

and loading were not included in

the price stated in the contract, how do you

think the supplier would somehow have sought to charge additionally for it?

Recover it somehow?

If I were to.

Buy this on.

Under such terms, I would set the price to match those terms.

The price is such that they could demand it.

So, am I right in understanding that you, by and large, have freedom of choice

to buy timber products at a higher price, with delivery to the warehouse,

or to buy them more cheaply, but bear the transportation costs yourself,

Naturally.

I have another question, on this topic.

You said everything about what "Sadovy" is.

I understand that this is a funny question for a practicing businessman today.

Please explain.

That means delivery to the warehouse, without unloading.

Am I right in understanding that there are so-called NKT

rules governing the terms of delivery for oats and so on?

And if the contract states all that, then it means the price that will be at

your warehouse, and you are not interested at all in what their costs were or what they spent money on.

Even if they transported it by camel, that would not interest you?

The full price

means that this product will be at your warehouse and costs X rubles.

Correct? Of course.

You are not.

The Spanish.

Am I right in understanding that NKT is an international system?

Delivery terms?

Yes, exactly.

One more question.

You do not have any.

There are questions.

To Mikhail, the lawyer,

I am simply.

Calling him that. No.

Thank you.

Into the courtroom

witness Sergei was called.

Semenovich.

From Angarsk.

Hello.

To the stand, please. Station,

state your name for the court.

Nikita Andreevich Sergeyev.

When and where were you born?

November 21, 1970.

The city of Kasimov, Ryazan Region.

Ethnically Russian.

Russian citizen.

Higher education.

Marital status.

Education.

Where do you work and in what position?

Head of the chemical station?

At what address are you registered?

Where do you live?

Kirov Region.

Zuyev... Pered Kollektivom Street, building 4, apartment 4, house.

That is also where I am registered.

You have been summoned to court as a witness.

I explain to you that you are obliged to tell the truth.

I explain to you that you have the right to refuse to testify

against yourself, your spouse, and other close relatives

if you choose to testify.

You are warned

that your testimony may be used

as evidence in the case, including

if you later refuse to testify.

You also have the right to file motions and complaints about actions or inaction

and court decisions regarding your questioning, and you have the right to appear for questioning with a lawyer,

and to request protective measures if you need them.

And I also explain to you that in the event of an unjustified refusal to testify,

or knowingly giving false testimony, criminal liability may arise

under Articles 308 and 307 of the Criminal Code of the Russian Federation.

Do you understand your rights? I do.

Then please sign an acknowledgment to that effect.

Do you have

any grounds to refuse to testify?

No. Please answer the prosecutor's questions first, then the defense's.

Nikita Andreevich, please explain: are you acquainted with

the defendants Ofitserov and Navalny?

I do not know them personally.

Do you currently bear any ill will toward either of them? No.

Please explain.

Where did you work in 2009, and in what position?

I worked as director of the Verkhneshizhemsky rural branch of the Federal State Unitary Enterprise Kirovles.

Who was your immediate supervisor?

At that time? It is hard to say.

Please describe the enterprise he headed in 2009.

Was it vested with the right independently to sell and harvest timber,

products at whatever prices and transportation terms

and in whatever assortment were advantageous for the enterprise?

But all prices were set

by the higher-level organization, that is, Kirovles.

So all prices and all deliveries were coordinated there.

Well, in this case

we handled the sales ourselves.

Are you familiar with the company Vyatka Timber Company? Oh,

yes, that

company is familiar to me, because at a general meeting it was mentioned

somehow by Nikolayevich, that we were supposed to deliver all our products

to that company.

Let's go into more detail. Where was the meeting held?

At work,

it was a meeting of directors, in

which year, I no longer remember, because.

I would say it was in the spring of 2009.

Possibly.

What was the reason for Opalev's statement that

it was necessary to sell timber products specifically through that company?

I cannot say.

Someone said that.

They would handle it better.

That is, sales there, or something else, helping the organization sell its products.

At that meeting, as far as you remember, who was present besides you?

Opalev was there, and also representatives of the Vyatka Timber Company.

I already.

I do not remember anyway.

Not even by sight, no.

Did any of the representatives of the Vyatka Timber Company speak?

I do not remember; it has been too long.

Did your enterprise subsequently work with VLK?

No. Why?

Well, sort of.

The terms were not very favorable.

I sort of

tried, well, to sell it myself.

And in what way were the terms unfavorable?

Well, both the prices and the delivery terms.

We had no delivery capability.

Mostly, we sold all the timber on site.

And this was not processed in the forest; the timber was taken directly from the cutting area.

That is, it had to be hauled out independently.

Taken somewhere, or something along those lines.

But in this case.

What exactly were the terms, in more detail?

It had to be hauled out. Hauled out.

And I no longer remember.

So we did not work with the company.

I see.

Do you know from

whether, besides your enterprise,

other forestry enterprises also had to deal

with the Vyatka Timber Company, supplying timber products to it?

Well, when I was aware of it.

As far as you know, as far as you remember,

what was the attitude of the forestry enterprise directors toward the contract with VLK?

We were not exactly enthusiastic about it.

Did you speak with anyone in particular?

Can you name them?

Last names?

Let me put it this way: there was a group there.

A number of directors would stand around and talk among themselves.

Well, I can't give you any last names.

And what exactly was the negative aspect?

Well, the terms seemed unfavorable, and payments took a long time.

Then

I ask that these questions be withdrawn, because

the witness said he does not remember the names or the circumstances.

What is happening now is nothing other than repeating rumors and gossip.

At this hearing, we are establishing

specific factual circumstances relevant to the case.

We are not here to deal with rumors and gossip.

And if the witness said that he cannot explain which directors were involved and, in fact,

when this happened, then we should move on.

I ask that these questions be withdrawn.

The questions are withdrawn. The question was specific.

Please explain only what you personally know.

If you do not remember the last names,

then name the directors of some forestry enterprises.

I can't remember anymore. Simply put, no.

I myself.

Where did these conversations take place?

Well, in Kirov.

That is, directly

in the organization's building.

In the building of KOGUP Kirovles (a state-owned regional forestry enterprise).

Yes, yes.

Go on. The question about the negative aspect has not been withdrawn.

The practical side of the relationship.

Well, no. The prices were not satisfactory.

And also that it took a long time.

To settle payments?

Because, specifically, our people—our organization,

the branch did not work with them, and I had not yet

really gone deeply into those details.

That's all. No, everything connected with them,

I hope,

I will be able to answer.

Just a clarifying question.

Do you know how many forestry enterprises you had?

More than 30.

That is, well, 30

it varied, I think—something like 37 or 38.

Well, how should I put it?

The number of forestry enterprises is clearly fixed.

There is a definite number of forestry enterprises.

And the number of directors corresponds to the number of forestry enterprises, because the system was quite large.

No, the same number, the same.

There are just as many directors. They change,

but those people were all known at the time.

So you were constantly working and interacting

with these people?

For the most part.

I did not know many of them personally; I only recognized many by sight.

Because we might meet there once every two months.

For example, in Kirov, I did not speak with many of them, and at that time I was, for instance,

one of the younger directors among the old guard.

They mostly kept to themselves and talked among themselves.

So I knew them by sight, but I was not personally acquainted with them.

So you cannot name them.

And tell me, how did you know that a person was in fact a director?

Well, because.

They were present, for example, at meetings with the general director.

The general director would personally gather the directors.

The directors, when they were all there talking.

So, since the directors who were present were gathered together, it was understood

that they were indeed directors.

I see. Please, go ahead with the question.

This is, excuse me, the first question.

For you?

What production base did you have?

What processing equipment did you have?

We did not do any processing.

So you sold for cash

standing timber

or assortments, or for processing,

as is done now?

And as the timber was harvested, gradually.

Please explain to me how that worked.

Well, in the forest, on the stump.

So, that means you come in and say: from here to here,

you may cut, correct?

The felled timber was sold.

That had already been agreed with you, right? Well.

Both standing and felled,

standing nearby.

No. Well, this was understood as standing timber.

That means standing trees, well, growing out of the ground.

Still growing from the ground.

We entered into a harvesting contract.

For timber, with the given enterprise or

organization.

That is, in this case, and then afterward,

we entered into a sales contract with that enterprise.

It was a two-step arrangement.

If Zygar comes and wants to buy timber from you,

you sell it to him standing, he harvests it himself, and then you sell it to him?

No, well, we enter into a harvesting contract with him.

If, for example, we do not have the capacity to harvest it ourselves.

Under the contract, he does it himself.

And then you

then sell the timber to him.

We can sell to him, we can. All right, then

the second question.

And was that how he usually purchased timber as well—under the same kind of unusual arrangement, or

I don't know. You do not know, as we were told

in writing, that working with SVK was unprofitable.

and something had to be justified economically.

How much time has passed.

Has passed—I simply can't remember now.

Precisely because everything.

As they say, all instructions came down from higher-level organizations.

Please explain to me.

So, then,

that you discussed with people you knew, they expressed a negative assessment of the work.

And do you remember

how you wrote a document related to your official duties?

You don't remember why?

How many

justifications were there before that for why it was unprofitable for you to work with VK?

You just put it in writing.

But the prices didn't suit us at that time, or there was something else.

I can't really say now, because so much time has passed,

I can't even recall the specific month or time anymore.

for other people.

That you do remember.

Right? And one more question.

No, actually, going back to your original point.

As of 2009.

Well, maybe around 100 people, roughly.

That is, more or less, because

staff reductions started somewhere around then

at first, probably.

At one point, about 115 people.

Then the downsizing began; it was ongoing there.

The number of people was changing.

All right, thank you. Well.

Tell us, witness, what do you know about supply contract

No. 1 of 2009, dated April 15, 2009,

between KOGUP Kirovles and the Vyatka Timber Company?

Nothing. I can't say.

Have you ever seen that contract?

Maybe I did see it—they sent it, but right now...

You can't even remember whether you ever did?

Did you see the appendix to that contract?

I don't know.

Did you work on it? No.

Did you personally see any documents concerning shipments of timber products to VLK

with your own eyes?

Since I didn't work on it, I didn't see any.

So if you didn't work with them, didn't see any documents, didn't see anything,

how can you speak about whether

the prices for timber products at which VLK bought them were favorable or unfavorable?

If you yourself saw neither documents nor anything else,

and did not work on it.

The prices were sent down to us from Kirov.

I'm talking about VLK's prices,

the prices at which VLK bought timber products from someone.

In your testimony, answering the prosecutor's question, you said that for your forestry enterprise

it was unprofitable to cooperate with VNK, because the prices did not suit you.

Now you are saying that you did not see a single document of any kind

regarding that matter.

How can you answer that?

And I am interested in what basis the witness is drawing conclusions about the prices.

No, the prices were sent down to us.

If that's the reference, then it didn't work.

But the price was sent down to me from above, through the higher-level organization.

They sent down the VLK prices.

Through the higher-level organization, because we, as branches, did not work directly.

We worked through the higher-level organization, that is, directly

through the legal entity.

We, as branches, were not legal entities.

One moment.

Were you given some kind of minimum prices

that were sent down, at which you could sell timber products?

I don't know, because after all it was the legal entity's matter.

KOGUP set the prices.

And have you ever seen any VLK documents? No.

But if you never saw any VLK pricing documents,

how can you talk about the unfavorable nature of VLK's timber-product prices?

How could I?

So, you couldn't. That's really what I wanted to hear from you.

So, not at all.

Then it is unclear

why you said that it was unprofitable to work with them.

Well, we did not work directly with the company.

And as for the prices of any particular company, for example,

I did not know them.

If we were not working with that company, we had our own prices.

Minimum ones, set by our organization.

We did.

Do you understand the question?

In your testimony you said that it was

unprofitable to send timber products to VLK.

Why did you say that, so to speak?

Some kind of...

I don't remember; it's hard for me to say now.

So maybe, on the contrary,

it was profitable to work with them?

I wouldn't say that. If it had been profitable, then we would have worked

with them at all.

May I ask one more? The question is, I no longer remember, because...

Witness, in light of the fact that you did not work with VLK,

in light of the fact that you made no deliveries to VLK,

in light of the fact that you did not see any documents

showing the level of prices for VLK,

can you say anything at all about timber-product prices?

No, that's right.

That's all, no further questions.

Please, continue.

Nikita Yuryevich, please tell us,

you mentioned a meeting of forestry enterprise directors,

where the company was introduced. Were you at that meeting?

Yes. You can look at me.

I was at that meeting. I don't remember.

But have you ever seen me?

Well, unlikely. I'm not very good with faces.

I wouldn't say it's good, so probably not.

Even if you had been there, I still wouldn't have remembered you.

Well, maybe some person stood up and said that there was a government directive,

that everyone had to cooperate with VLK, that cooperation was being recommended, or something like that.

Nothing like that was said.

It was simply that

the general director at the time, Nikolaevich, announced that

an order had been issued to work with that company.

And that was all.

As for whether he introduced someone or not, I don't remember, I can't say.

Please tell us, it seems like a strange situation.

On the one hand, he issued an order, and everyone was supposed to sell.

But you kept selling to someone else, just as before.

In what sense, exactly?

Well, he issued an order.

And after that, what practical consequences did it have for you?

Were you subordinate to Opalev?

Was he your immediate supervisor? Yes.

And why were you not following his instructions?

Or were there no instructions?

No, there were instructions.

So, some other circumstances must have arisen at that time.

What I'm saying is,

either you were not following the instructions,

or there were no instructions, because you were not selling anything.

Although you just said that you were forced to sell through them.

That mostly concerned finished products,

because, as far as I can recall now...

All the products

or part of the products could be sold through intermediaries.

Well, please understand, I don't remember the order, because I no longer had it.

Not anymore.

I haven't worked there for so many years, I haven't worked there since 2011.

And over that time, I haven't kept any documents in my head.

Go ahead.

At that same meeting, you said representatives of the forestry enterprises were standing there

and discussing among themselves after the meeting what had been said.

Well, they said that it would be unprofitable for the organization.

Go ahead. I can't say what that was based on.

Please answer me, and listen carefully to my question.

Let me put it this way: it so happened that at this meeting

first everyone was told that there was this company, VLK,

and at that same meeting, afterward, everyone was discussing

that cooperation with it was unprofitable; as you said, they took a long time to pay.

How could they have taken a long time to pay? No.

That was later, when someone had already started working with them.

You did not work with them?

No one forced you to work with them?

You did not see the prices.

Thank you.

The question is very simple.

Do you have a law office?

We can.

There is one more question here.

One.

Please tell me, comrade,

in connection with the inability to work with... some...

did you write any letters addressed to the KGB?

Your Honor, I object to that question.

I said that he did not work with VLK, they only had two...

Rephrasing,

all right.

Did you send information to KOGUP

stating that you were unable to work with them?

Did that happen?

Perhaps orally or in writing, in some form?

We reported on that.

And what reasons did you give in those letters—what were they based on?

In response to defense counsel's question, you explained that

you had not seen any financial documents

related to the activities of the Vyatka Timber Company,

and that verbally, from the commercial department,

or from Director Opalev of KOGUP Kirovles, you were not informed of the terms

and volumes that needed to be shipped to the Vyatka Timber Company.

To the lawyers,

the right to request security measures if necessary.

And I explain that in the event of an unjustified refusal

to testify or the giving of knowingly false testimony,

criminal liability may arise under Articles 308 and 307 of the Criminal Code

of the Russian Federation.

Do you understand the issue of liability?

Please sign to acknowledge that.

Are there any grounds for refusing to testify?

No. In response to the prosecutor's question.

Sergey Nikolaevich,

please explain whether you know the defendants Ofitserov and Navalny.

No. Do you currently bear any hostility toward

either of them? No.

In 2009, where did you work and what position did you hold?

Director of the Vilnyus forestry enterprise, a branch of KOGUP Kirovles?

Who was your immediate supervisor?

Vyacheslav Sergeyevich Opalev.

Sergeyevich. Lev Nikolaevich.

Nikolaevich. Understood?

Please explain.

In 2009, did the enterprise he headed have the right independently

to sell harvested timber products on whatever shipping terms and

transport arrangements, at the prices, and in the assortment that were

most advantageous for the enterprise? Yes.

How were the terms coordinated?

Did that happen at all?

The setting of terms took place

with respect to prices.

It was handled through the commercial department by our management.

The management of KOGUP Kirovles.

And the products were shipped.

Understood. Are you familiar with the company Vyatka Timber Company?

But we unloaded

several times.

So, the first contracts we received were with

the Kirov Furniture Company.

Payment was made in full.

We shipped to Krymskiye Zori, and, as I recall, it went through them there,

because Krymskiye Zori settled with us directly.

That payment also went through in full,

and payment was made for two railcars,

which, in the log for KSK 415, were not recorded at all.

The total amount paid

came to 757 rubles.

It was paid later.

After the court case,

196,000 rubles were paid.

As of today, the debt amounts to 550,000 rubles.

You mean your enterprise went to court and...

To the court in Kirov?

I did.

Please explain, Sergey Nikolaevich, when

and where you first learned of the existence of such a company as the Timber Company?

At a management meeting.

Opalev came in; I don't remember...

What kind of meeting it was.

He presented it as...

A decision was made

to create VLK, through which there would be

shipment of products in order to ensure a greater volume of sales.

At that meeting, besides you,

was anyone else present?

All the directors, the chief forester, and the accountants.

Representatives of the Vyatka Timber Company.

Were they there?

Right now I find it difficult to say which of them it was; Ofitserov was introduced to us.

I was sitting there.

He spoke.

I don't remember.

And it was explained that

through the Vyatka Timber Company, products were shipped to a number of enterprises.

including Narayen, DKK, Russian, and so on.

Without the participation of the Vyatka Timber Company, to the enterprises mentioned

were any timber products shipped?

They were always loaded.

to Krymskie Zori, they were loaded and handled at the warehouse.

Regarding MPK, the terms

the main terms on price and transportation conditions changed.

Were those agreed upon or not?

Nothing changed.

In what

way was the product shipped for the company?

Were slots reserved, or was it delivered some other way to the final destination?

To Sochi, to MPK.

It went out by truck; it was shipped by truck.

the products, and for

all the rest was sent to the Valenki station and through Valenki station.

They arranged railcars for themselves.

Already in Krymsk Gora, in Krymsk, and

for us, that trip to the station.

How was the delivery carried out?

Using our transport?

At your expense, or at whose?

So the price was quoted free on railcar.

So, in that connection, did the

terms of supply to VLC change compared with other organizations?

What had the price been before that?

It turns out, for example, somewhere around 100 rubles lower than ours,

than what was set there.

Are you aware of the general director's order?

The one that prohibited

independently selling timber, products of the forestry enterprises

and required timber products to be sold

directly through the state company.

There probably was such an order, because after that

we sold that product only to small buyers.

Did you comply with it?

As far as you know, apart from your enterprise,

did other forestry enterprises, branches of KOGUP Kirovles, cooperate with the Vyatka Timber Company?

Yes, because a general shipping list would come in.

Shipping schedules.

Did you speak with the directors of those forestry enterprises, and what was their opinion

on the matter?

About relations with the company?

Up to the point when it worked out.

Probably not much.

But when it stopped, we all immediately became concerned that there was no payment,

so there wouldn't be any.

Did you speak with anyone in particular about this?

I find it hard to say now.

All the witnesses.

No more.

They have none.

It is possible to question

only.

Me, at that time.

I have the first question.

The person worked, so to speak.

In 2009, about 50 people,

50 people, mostly office staff,

those who worked in the office, worked in the forest, traded timber.

How much timber was harvested and sold at the beginning of that year?

Do you remember, the fire

for 100,000 cubic meters?

No, no,

somewhere around 80,000 cubic meters.

How many cubic meters?

Approximately, in total, shipped to that party,

to VLC there were shipped by

truckloads. Probably five went out.

That is approximately somewhere around 100 to 150 cubic meters.

And two railcars were sent to KSK.

Roughly, that was about 80 cubic meters each.

All about Krymsk.

It went to Krymsk Gora.

If memory serves me right, three years,

three railcars.

Now, with the Crimean Tatars

it was certainly possible to work; it was good working with them.

They took everything we had.

They took 30,000 cubic meters to

VLC, and loaded just over 500 cubic meters.

Your assessment?

Now that is a major client.

Relatively speaking.

If everything had continued, could it have become a major client?

No. If we take 50,000 cubic meters, 50 cubic meters,

well, how did the restrictions force a change?

That is, when major clients are under 50,000 cubic meters, they seemed to say from 5,000 cubic meters,

but they ordered for 5,000 cubic meters, five or ten, and harvested somewhere around 1,000 cubic meters.

What is the difference between that number of cubic meters and 500?

Not much, or even so?

At what point did you realize what was going on with Krymskie Dvory?

Was that a client of VLC?

Working with them was very interesting.

Why did they take everything that was

very difficult for us to sell?

It was fourth-grade material, rotten, low-quality,

dark, basically passing stock.

So, look, we get 160

160 cubic meters to KSK, two railcars

for 150 units, to KMK and 300,

and 300 cubic meters, and three railcars to the board plant.

Here, 40 cubic meters.

So the ratio comes out to

340 cubic meters

of fourth-grade scrap board.

From that point of view, Vyatka took

a lot.

Did you have a broad product range, or not much?

Half.

That is, of its volume, practically 50-50.

That is a good indicator for the timber industry, when they take that kind of waste, such a percentage

is good, very good.

So in that respect, it was beneficial to work with VLC, correct?

I would agree.

A question.

Sergei Nikolaevich, you worked in this field for quite a long time, right?

All my life, all my life.

Could you explain to me what 'free on railcar' and 'railcar'

mean in terms of where the product is shipped?

That is, if it is railcar, destination station, the price is given

to the destination station for the loading front under station control.

At the departure station, when loading the railcar, it is supplied within the station limits without loading charges.

Railcar.

Well, accordingly, when it is free on railcar at the departure station,

then the price includes loading into the railcar, the timber is dispatched,

while the cost of delivery, transportation, and other handling is separate.

It is included in the price. No.

So, that was included there?

Yes, it is included, that's right.

So, accordingly, the price is 100 rubles.

"Franco wagon" means everything is included in that price.

So the supplier's entire cost calculation is included, right?

And we discussed that issue in terms of railcars.

only to the address, to the address, and only to the group's address.

So those who weren't there were equipped, and all the others were getting ready and loading the trucks.

We were usually oriented toward small local consumers.

And when we received the trucks, did they drive straight in, or come from somewhere else?

No, the products— sawn timber—can't be seen. No,

they handled two of them.

And a full truck means a truck with loading included directly.

Loading.

That price includes it when the goods are shipped into the client's truck.

If we weren't dealing with railcars, then it concerned delivery of

sawn timber; they were transporting the remainder.

So it would be correct to say,

if I say that if the contract states

"truck," that means the goods

include the price of the goods, already loaded into the truck or railcar.

Accordingly, that's correct.

The only difference is the haul distance for removal.

Yes, I see.

That's why they differ.

Railcars, trucks—fine.

One more question.

Because.

When I...

Sergei Nikolaevich, please tell us, you mentioned

a meeting with the directors of the leskhozes (state forestry enterprises) and so on.

There were about 100 people there, owners

of forestry enterprises, chief accountants, and so on.

I spoke at that meeting.

No, there was this general advice

someone stood up and said

that perhaps, on the governor's instructions, at the

request of the administration, we should all work with VGK.

I wasn't at that meeting, but I'm fairly sure of it.

I think so, yes.

I believe I wasn't there.

I had been there earlier.

I remember that Officerov was introduced to us; sorry, I recognized him.

That was the whole matter.

And please tell us, when it was announced and it was said

that we would try to sell large volumes through them, how did you react to that?

Positively? Neutrally? Negatively?

It's hard to say.

The thing is, by our

very nature we were geared toward local consumers.

That is, first and foremost, we were supposed to supply kolkhozes and sovkhozes (collective and state farms),

builders,

and entering large markets.

That was problematic.

Large markets require different quality, different volumes,

and a completely different work rhythm.

At the time the contract was concluded, did it seem advantageous to you?

That too is relative.

If

everything had gone as they said. Meaning?

There was also a very nice phrase

that prices would remain stable, regardless of seasonality.

Looking at the moment of conclusion in 2009.

When it seemed advantageous to you.

At the moment of conclusion it was disadvantageous, because prices were falling.

But if that had continued further, that is, if prices had remained stable, things would have changed.

The thing is that

timber is a seasonal commodity.

In winter, prices fall very sharply.

If prices had not changed.

And the prices were market prices, we worked at market rates.

At market prices.

Now, if we don't talk about the debt for the moment, then overall

was the supply contract loss-making or profitable for you?

It was profitable,

though with less profit than if we had sold it

entirely on our own.

You have it.

If I may, I would move to have part of it read into the record.

The witness's testimony

in connection with contradictions that he has allowed in his testimony regarding

his assessment of whether the contract was advantageous or disadvantageous at the time it was concluded, as well as

the market

price under this contract and the overall benefit of the cooperation.

This case.

Pages 200 through about 221 of the case file,

one paragraph on page 220 and one paragraph

on page 221.

What is the contradiction?

The contradiction lies in the assessment

of the benefit of this contract at the time of conclusion and the prices.

Market prices.

And in the overall assessment of whether this contract was loss-making or beneficial in the end.

If one is to be consistent.

I support that position.

I support that view.

The prosecution I only do not need

I ask for that clarification.

Excuse me, and the protocol itself?

217, 222. 217.

Do you have page 222?

The court granted the defense's motion,

where there is contradictory testimony given during the preliminary investigation.

The only thing is, I want to note that your position

diverges from the earlier position that you repeatedly expressed, namely that

that all parties here are given every opportunity.

To question. You asked for that.

At this stage, I have no further questions.

And the other defense counsel for the defense?

I merely noted that, and that's all.

Since there are no questions, we do not object to Navalny reading out

this testimony.

The others did not try to— you will simply read it out yourselves? Yes.

25 volumes

of the case file.

Looking at the absence of the record of the witness interview

dated June 23, 2011,

of witness Sergei Nikolaevich Panteleev

Questioned by an investigator of the Azovsky inter-district investigative department.

Malykh Khramovaya.

Case file page 220.

Fourth paragraph

At the time the contract was concluded, that is, in 2009, supplies to

Vyatka Timber Company LLC personally seemed advantageous to me for KOGUP Kirovles

and for our leskhoz (state forestry enterprise).

At that time, I saw that benefit primarily in the stability promised by Officerov.

He was introduced to us as the head of an organization

that would purchase our products in the long term.

Supplies to the Vyatka Timber Company were made at average market

prices, neither higher nor lower than those charged to other buyers.

Next, from case file 221.

In itself, the supply contract was not loss-making.

Its terms were favorable for the forestry enterprise.

I do not see any contradictions.

There are.

List. Was it you who gave this testimony?

I just wanted to clarify with you, after all, at the time the contract was concluded

with Eduard, thank you. The contract seemed advantageous.

At the time the contract was concluded, the prices in question were lower.

But if it was clearly stated there that if this were a standing contract, the price fluctuations

in prices. At the time the contract was concluded,

when you had only seen the contract, it seemed advantageous to you.

Was anyone forcing you to perform it, and did it seem to you that you were being

forced to carry out a knowingly unprofitable contract?

No. It did not.

The point is that there is also another objection here, namely,

that we, I repeat,

that if those prices had remained in place,

they would have fluctuated in exactly the same way, up and down alike

according to the prices.

Who set them?

As I understand it, they were set for the Vyatka Timber Company.

The contract with regard to how pricing was determined

in the adjustments.

Am I right in understanding

that the commercial department negotiates with counterparties and sets prices?

They send you the specifications.

We send the specifications for what we have, and they match it to the client.

Please tell me, you said that half

of the shipments that were made consisted of fourth-grade lumber

that no one sold, except for those you mentioned.

And if there had been no cooperation with the Vyatka Timber Company

and no dealings with Crimean Patterns, what would have happened to that stock?

And we would have salvaged it, thank God.

It would have been written off and disposed of.

So am I right in understanding that half of the volume of that cooperation,

if that cooperation had not existed, would simply have been thrown away as scrap or firewood?

I do not know what else could have been done with it.

Well, in Nizhny Novgorod, we incurred losses.

Tell me,

please, this Order No. 70, which the prosecution representatives

asked you about—after all, does that order concern

instructions

from the head office to sell everything through VLC, or does it concern instructions

to sell everything through the head office of KOGUP Kirovles itself?

I do not have that order with me right now.

You do not remember? Of course not.

Well, please try to recall: was there an instruction to sell all products

exclusively through VLC, and was that instruction followed?

All large-volume products, that is, railcar shipments,

while smaller truck shipments went through the head office.

Please tell me,

you stated that in 2009 you produced a total of 5,000 cubic meters of products.

Is that correct?

That was not only sawn timber; there were other products as well.

And 500 cubic meters of that went to VLC, of which half

would have been written off and caused a loss if there had been no cooperation.

Still,

please explain.

According to that logic, including this scrap lumber,

your share of the cooperation was 10%, and 90% went to the other companies.

That means that, after all,

either you were not forced, or no one was forcing you to sell

exclusively through VLC.

So you...

You stopped selling in August, as soon as there were

non-payment for those two railcars, and that was the equivalent of a month and a half of your salary,

as soon as those non-payments began, we stopped selling that product.

And instead of through VLC, we started selling through our own counterparties.

Am I right in understanding

that as soon as payment delays and non-payments began, you ended the cooperation?

When you ended the cooperation, did that have any consequences?

Did anyone scold you, reprimand you, or anything like that?

Was that normal practice?

No payment, no deliveries.

Well, the contracts came in.

The company, the authorities,

some other contracts came in as well.

I went to Opalev's office and said that since payment was not being made,

we would not perform such contracts until payment was made.

He agreed with me.

Opalev agreed with that.

So yes, you terminated the contract and did not supply anything further.

And we supplied nothing further.

Please tell me, when you said that you would no longer supply fuel,

did he say that someone would definitely be fired or that some consequences would be imposed on you?

I think he himself had already realized that there was no point in continuing to work that way.

Please tell me, was this no different

from ordinary cooperation with any company that pays the market price?

No, you sell.

They stopped paying.

You stopped selling, correct?

Well, there was some pressure from above, of course.

But pressure from whom? Please explain what you mean by pressure.

That the terms still had to be fulfilled,

that we had major contracts signed, but we could also stand our ground.

So, in other words, the pressure was connected with the need to fulfill

the contract; a major contract had been concluded, and therefore it had to be carried out.

How do you know that?

There from

the commercial department—documents were coming from there, right?

Especially since we had already received dispatch orders for the next railcar.

Can you name who they came from?

That is, you learned that the contract was to be performed.

An order simply comes down from above

through the commercial department for fulfillment.

Is that right? And how was it expressed?

The pressure?

Who said that phrase?

We are being pressured, simply put.

We are under pressure.

Basically, the message to us was: guys, we have to ship.

But we also stood firm and said that we would not proceed until there was payment.

Am I right in understanding that this pressure was not just pressure for its own sake?

It was pressure to perform an unfavorable contract simply because the contract had been signed?

We had to supply, therefore we had to ship the products, correct? Right.

Please tell me, did anyone put pressure on you in the sense of

making the price lower or making it free?

Or perhaps the deliveries themselves?

Nothing like that happened.

But we do have discipline: a price comes down to us.

Now, if within that chain of command someone had asked you, had said, bring it,

please, Sergei Nikolaevich, for free—no, there was nothing like that.

And was anything done to him because of that?

No, we did not ship it.

We stopped shipping, and we did not load anything after that.

So, during the cooperation, VLK paid for the products?

Up to a certain point,

after it stopped paying, a debt arose.

Did you stop receiving the products?

As soon as two good railcars loaded with good-quality boards were shipped,

that was when they stopped receiving money.

And please tell us, were there in fact any instances of gratuitous deliveries,

when you shipped products and they took them for free,

when it was clear they would not pay it back?

No, no, nothing like that happened.

My question is more about something else.

I have a question that arose in connection

with the agreement, the testimony, and the questions that need to be asked.

Please tell us, witness.

Payment for the products that...

That the leskhoz (state forestry enterprise) supplied to the Ministry of Defense,

which company was supposed to make that payment?

Into whose account?

I do not remember the terms of the contract right now, but I believe they were supposed to make

that payment into Kirovles's account, as had been agreed.

Well, it was standard practice in the paperwork that Kirovles would transfer the money to you first.

Please tell us,

were you able to monitor the work of the accounting department, to look into

whether the accounting department was able to prepare the documents for payment for the products properly,

and whether it submitted those documents on time, whether there were any errors in them

that could delay payment for the supplied products?

Is that what you mean by monitoring it?

No, we did not request copies of their documents.

To monitor the work

of KOGUP Kirovles (a regional state unitary enterprise), specifically regarding how, in terms of quality,

how timely

the accounting department of KOGUP Kirovles prepared payment documents, and whether it did so without errors.

What was I supposed to do?

Request the documents?

I am asking.

Did you simply have the ability to monitor this process in KOGUP's accounting department?

I will refer to this point: for example, I would say that

if we called and they told us the documents had been sent, then that was all we knew.

And if you mean, 'Please send us whatever documents you have,'

Of course, of course not.

Very well.

Please tell us, were you able to monitor

that situation, how timely the settlements generally were

between VLK and KOGUP Kirovles, and not only

whether KOGUP was already sending you that money, based only on what you were told, only on

words.

Nothing more than that.

No, thank you.

Not really, but please, Sergei

Nikolaevich, please tell us,

what is accounts receivable?

Could you explain that to the court?

It is debt that arose because wages were not paid.

Am I correct in understanding that these 500,000 rubles were...

You do not know whether the accounting department processed the money correctly, do you?

You do not know that for certain.

But if such a debt exists, that is accounts receivable, correct?

And in general, was the amount of your accounts receivable larger?

It varied.

We had very large volumes,

it reached 1.5 million rubles and at times even 2 million rubles.

But that was current operating

accounts receivable.

There was nothing extraordinary about it.

But the accounts receivable owed to your leskhoz reached 1.5 to 2 million rubles.

So overall the accounts receivable

was about four times greater than that specific amount.

And that was in 2009.

That was normal, not extraordinary.

After three months, it would already be extraordinary.

And please tell us.

You have worked at KOGUP Kirovles for a long time, you worked there then,

and you now work in the structure that remained after Kirovles.

So you more or less know the overall financial situation that existed in 2009,

or now at KOGUP Kirovles; do you know the total amount

of accounts receivable at KOGUP Kirovles? No,

Witnesses Bastrykin and Zmeev explained to us that the debt

could amount to hundreds of millions of rubles, or at least 100 million rubles.

Can you assess that information, in general, as reliable?

Well, there...

Do you consider VLK's debt,

that accounts receivable, to have been in some way

especially significant

on the scale of the entire Kirovles enterprise?

And for us it mattered.

For your specific leskhoz. If

if we,

if you were told, for example, that the accounts receivable

of VLK to KOGUP Kirovles was 500,000 rubles, while the total accounts receivable

of KOGUP Kirovles was 118 million rubles, how would you assess those 500,000 rubles?

How significant would that be on that scale?

Obviously every kopeck matters, but overall?

I think that is already a matter of inference. It is not...

a financial question.

At this point it raises more questions.

Does the defense have any further questions? No.

Simply

defense counsel Mikhail has none.

Is there anything else of any kind?

I have three questions for you here arising from your testimony.

Well, including from the defense side.

You explained that at the time the contract with VLK was concluded,

the prices under that contract were lower than the prices

at which timber products were sold to other counterparties.

Could you explain that in more detail?

Explain that price? Delivery was included

of timber products to

Valenki station, which is 75 kilometers away.

That immediately added about 50 rubles per cubic meter

and another roughly 50 to 70 rubles

because the deliveries...

50 to 70 rubles, sometimes up to 100 rubles, and also because

the price they offered

was lower than what others offered.

So

am I correct in understanding that your cost of this product increased?

That is, transportation costs, correct? Yes.

And the price decreased

at which you were selling it, correct?

Also,

you said that the prices were set by the Vyatka Timber Company.

So how do you know that it was specifically VLK that set the prices under these contracts?

Under that contract, from the commercial department.

From whom exactly?

They brought it.

And how was the collusion arranged?

Could you put that differently?

No, it was very simple there: it just came in.

We sent over the specification of what we had available.

They sent us the prices, saying that shipments would be made at those prices.

The specification came from VLK.

Not from the commercial department.

From the commercial department.

So, after all, you said that, from what you were told, you knew that the prices

for this product under the supply contract were set by Vyatka Timber Company.

Specifically in this

information, that it was not KOGUP that set the price, but that VLK set the prices.

That is only based on what she said, from her side.

You said

that the money was coming into KOGUP,

and you were unable to fully monitor payment for the products you supplied.

You also explained that you

did not receive payment for three railcars,

for two, well, for two railcars

shipped to VLK as the counterparty.

How do you know that this payment

really did not come through?

From what the accounting department told me.

The table was those.

The accounting department of what?

We did not quote it directly.

No further questions for you. May the witness be excused?

Yes. If I may, I would like to clarify something.

All these questions.

Please tell us, you just said that the price was

unprofitable because of delivery to Polyanka station.

Correct.

So do I understand correctly that the price on those terms—you explained what that means?

It was a market price.

It was just that within your cost structure, the

delivery cost was increasing.

Please tell us, you determine your own cost price yourselves, correct?

When Kirovles?

Do I understand correctly that

the counterparty receiving the goods on station-delivery terms,

does not care what kind of transport you use or where you bring them from?

If someone entered into a contract on the terms of KOGUP Kirovles

then they receive this product accordingly.

And they do not even know which forestry unit it is coming from, who is transporting it, what the distance is, and so on.

So the only thing that matters to them is the market price on those terms, correct?

That raises a question.

So, they still know,

because from the shipping specification that we send, that is beyond doubt.

But it is KOGUP Kirovles that decides where it is shipped from, from which forest,

which forestry enterprise is assigned to deliver this product—that is decided by GUP Kirovles.

Accordingly, in this way, KOGUP Kirovles

independently determines the transport component of that part of the cost price.

It can say to bring it from your forestry unit, or, one might say, from another one.

It needs to be carried out.

Thank you.

Do the parties have any further questions?

And

can such a question be asked in

You said that with VLK, or rather,

you did not have direct contact with them.

So do I understand correctly that all matters of interaction

with VLK went only through two intermediaries?

Not only through Buran, but through Kirovles as well?

So, in other words, the company did not interact with you directly. [inaudible]

That is all, thank you.

May the witness be excused

No longer.

Thank you.

The courtroom is free.

Witness Minin has arrived at the courthouse.

We have not questioned him,

he is being invited into the courtroom.

I seem to have missed someone.

And? I.

Please step up to the stand.

State your name for the court.

Apparently that is all, Viktorovich.

When and where were you born?

April 3.

1985.

Nationality: Russian?

Russian citizenship.

Higher education.

Marital status: single.

Where do you work, and in what position?

Regional Employment Service of Kirov Region.

What is your residential address?

Where are you registered in Kirov?

32 Truda Street, apartment 125.

You have been called for questioning as a witness.

I explain to you that, in accordance with Article 56 of the Criminal Procedure

Code, it is your civic duty and obligation to tell the truth in this case.

You have the right to refuse to testify against yourself

personally, your spouse, or other close relatives,

if you choose to testify.

I warn you that your testimony may be used

as evidence in the case, including

if you later refuse to testify.

You have the right to file motions and complaints regarding actions, inaction,

or decisions of the court concerning your questioning, to appear for questioning with a lawyer,

and to request protective measures if necessary.

And I explain to you that in the event of an unjustified refusal

to testify, or the giving of knowingly false testimony, there may be

criminal liability under Articles 308 and 307 of the Criminal Code of the Russian Federation.

Do you understand your rights and responsibilities?

Please sign an acknowledgment of this for the court.

Submit it to Rospechat.

Please tell us, do you have any grounds for refusing to testify?

No. Please answer the prosecutor's questions first, then the defense's.

Mikhail Viktorovich, please explain whether you know the defendants Ofitserov and Navalny.

Ofitserov—are you acquainted with him or not?

Do you currently bear any ill will toward either of them?

No, I do not.

Please explain.

Where were you working in 2009, and

what position did you hold at that time?

Per month?

About the judgment in Kirov Region.

In the same position as now.

If I ask what kind of

activity you were engaged in.

Logging and wood processing.

So, a holding company.

Integrated with industrial operations.

I see. In connection with the activities

carried out by the enterprise where you work,

did it have any contractual relations with KOGUP Kirovles?

Yes, as far as I remember. Now, when did they arise?

In 2009, on January 11.

So, in the winter of 2009.

He left.

Please explain.

Were representatives of KOGUP Kirovles (a regional state-owned enterprise) familiar with the company's operations?

Together with,

in particular, the director of Kirovles came

to the enterprise.

Vyacheslav was at our place. He was.

Alone, or he came together with someone. Alone,

but he came more than once. He visited repeatedly.

That is, several times, sometimes alone, sometimes accompanied by

his staff.

I don't remember exactly.

Please explain.

You are saying that he is known to you.

The defendant, Ofitserov.

When and where did you first see him?

In May 2009.

Ofitserov came to the plant with Marina Bura.

They came regarding the conclusion of

a supply contract for the planned raw materials for Vyatskiye

Polyany. The plant, in May 2009.

Did he represent any specific company, or

was he acting as a private individual from KOGUP, so to speak, a trader for KOGUP Kirovles?

A trader.

What was the name?

The name of the company was Vyatka Forest Company.

Ofitserov was its director.

On what terms were the supplies planned?

On terms identical to those

that had been agreed with KOGUP Kirovles?

That is, in terms of

price

the timber products were on identical terms.

So, in other words, the terms did not change.

Absolutely.

So they were.

Were there any deliveries in connection with this?

On his part?

We concluded a contract

with, what was it called.

Regarding the conclusion of a contract with Vyatka Forest Company.

In addition, we got in touch.

With someone from.

That is, we spoke with him by phone.

We talked; I described the situation, and he said yes, indeed, the sales

for Kirovles would be handled by Vyatka Forest Company.

He explained it by saying there was optimization there.

Logistics and so on.

That is, there was no strong commercial department.

The forest company takes on

the obligations for selling

the products.

Certainly.

Well, and probably my last question.

Before Ofitserov

arrived at your enterprise together with a Kirovles employee, later,

had he come to the enterprise with anyone else, becoming acquainted with things here,

in particular, with the fuel?

You know, I don't remember right now.

I don't remember.

So it's possible, but if it happened, then perhaps it did.

That is, we.

Proceeding.

Your Honor.

Yes, please.

May I question him?

Good afternoon.

First question.

Please tell me, how were deliveries generally made to the site,

from all suppliers, including timber suppliers—by transport, by truck?

Well, as for.

There was no depot delivery by transport.

As for road transport.

The price was agreed; the delivery terms

to the warehouse—how exactly?

As I understand it, in

the question was about the price.

Well, by truck, yes, ex works.

Yes. But for us,

that is, different prices applied for different branches.

In particular, for the Tyumen branch, we used our own transport,

we sent our own timber truck; for the other forestry networks,

The price included delivery up to the destination.

But the contract specified a price at the gate.

That is true, when purchasing.

And accordingly, where they actually got the goods,

did not concern us, because the price was paid at the gate.

Correct? Yes. But we specified that.

The consignors there—the Nevskiy district of Tyumen Region—signed it.

In principle, it was not critically important to us.

It did not matter where they

obtained it; what mattered was the delivered price, as long as it matched

the contract.

And when you bought from others by railcar, were there such deliveries?

Bought by railcar. Not railcars themselves.

We buy.

I see.

What were the payment terms?

Well, as for prices.

Also including delivery to our

stations.

And what is that called?

The terms when you buy

a railcar at the station.

At the destination station, by railcar, to the destination station, that includes Russian Railways (RZD) charges as well.

Further on, correct? Yes.

And what about the services of delivery to the railcar and loading into the railcar?

Removal and placement.

There, when they are included in this price, which is the station

destination price, that price includes the supplier's work at its own station.

Well, yes.

That is, removal, placement,

loading, paperwork— those are the consignor's costs.

That is, removal, placement, loading, railway paperwork, the tariff,

delivery to our station.

After that, we still take it ourselves.

After that, it is,

so to speak, those are the delivery pricing terms.

This is normal practice, a generally established practice.

And here, this is the practice.

Only in Kirov Region,

in Russia, or worldwide? Worldwide.

In Kuzbass (the Kuznetsk coal basin), there is such a concept as

essentially, the delivery basis.

They may be with delivery included.

That is, at the departure station, at the consignor's warehouse.

Normal practice.

The price is agreed, the delivery basis

and the work proceeds.

So, nothing special.

Let's put it this way: no.

Standard practice.

Not everyone knows that.

Thank you very much.

For the question.

Please tell us, you used the term "trader."

Could you please explain what that means?

Well, a trader, briefly speaking, is...

Let's say, an intermediary between the shipper...

and the consignee.

Is that some kind of criminal activity? No?

That is, as a rule, a trader takes on certain obligations,

he may extend credit to the shipper, provide transportation, and so on.

No, it's an established practice. It's normal.

An established practice.

Do I understand correctly that the existence of timber traders in the forestry industry

is an established practice? Yes.

And do I understand correctly that in some sense

Invest Lespromkhoz is a project?

So, you are a trader?

Well, partly, yes.

The Novolipetsk Plywood Mill and the investor are different legal entities.

And you bought the products, and then resold them

keeping some margin for yourself.

Well then, please tell me, if someone were to say to you that

KOGUP Kirovles or any enterprise,

could have supplied directly to the plywood mill,

while you were acting as an intermediary and thereby causing harm? And

would that seem like nonsense to you, or is it

how would you react to such a statement?

As for the plywood mill,

I can say that

it's not nonsense.

It's an established practice.

That is, there is a whole range of mechanisms.

We don't use them, but they exist.

The existence of timber traders, including Invest Gazprom.

This is a normal situation, an established practice, and it is typical

only for the mill or for all enterprises in general?

In general, for all enterprises.

For example, if you take the Kolpino Pulp and Paper Mill,

it's the same thing.

That is, there is a group of companies there, there is the enterprise itself,

and, let's say, some servicing structure.

In other words, it's impossible to sell directly.

You have to go through that trader, that intermediary.

And please tell me,

do you have any information regarding whether

the contract between Invest Gazprom

and KOGUP Kirovles and the Vyatka Timber Company was concluded under coercion?

No. Please tell me, has anyone ever approached you, or your company,

perhaps from the regional government,

with insistent requests or suggestions? No.

Have you ever heard my surname mentioned in connection with the conclusion of the cooperation agreement?

Never heard it.

Please tell me, in general, KOGUP Kirovles, in your view,

since you mentioned logistics and marketing

and so on, was it a strong company in those areas?

How were they with marketing and logistics?

It's not for me to assess the company.

Compared with other enterprises.

No, I would say at the very least it was no better, let's put it that way, no better.

Their sales department was no better.

But what do you mean by "department"?

That the sales function was no better?

Let me clarify my question.

If I may, appearing here before you earlier was

the head of Solikamsk's procurement department.

For example, he complained that at KOGUP Kirovles

they were unable to prepare the documents properly.

Did you have any difficulties in that regard?

We did.

At the initial stages there were problems with the paperwork, but all of that was resolved.

Basically.

So you had no complaints?

Question.

Perhaps inefficiency, ineffectiveness issues.

The department, after all,

as for transportation, they...

They had major problems; there were no vehicle lease agreements.

That is, heavy trucks were not being used,

the way they are used now?

For you, that was a logistics issue, but overall, no.

They functioned adequately on their own.

Well, that is,

would it be fair to say that compared with other suppliers,

they were a bit more difficult to deal with.

They appeared less efficient.

After all, there were 39

branches, whereas in the commercial department

at Kirovles there were only three or four people.

That is, physically we could not organize

a proper sales department.

So, three or four people.

Three or four people who sat in the commercial department

for the entire enterprise, and they handled everything.

And in your view, they could not, simply physically could not,

organize it; they physically could not.

All right, thank you.

No further questions.

Go ahead.

Please tell us, witness,

under the contract with KOGUP Kirovles,

how were payments made?

To clarify,

did you make advance payments for the products?

Or payment upon delivery?

Under the contract, it was

10 to 15 days.

Payment could be made after the fact.

So, payment after delivery.

So, in your case, payment was made 10 days after receipt.

For example,

after acceptance.

Is that normal practice?

Yes. What is the reason for that?

Was that simply a contractual term?

The payment terms were set out in the contract.

Accordingly, we...

Do I understand correctly that within

a week

and for that reason, payment was made after

that period?

Please tell me,

you said that there were no deliveries from VLK

to

your organization.

And what caused that?

First of all.

We signed the contract on May 20.

It was not the harvesting season.

There is practically no yield yet until mid-July.

That's one.

And second, from the start of the season

for harvesting in mid-June, as far as I know

was no longer carrying out

the sale of shell products, that is, we continued to work

under a direct contract.

Since when?

You continued in the summer of 2009?

Maybe, Yulia?

So, essentially,

you had no actual relations at all.

There were none.

There were no deliveries, no settlements, only a contractual relationship.

Only under the contract. No deliveries.

In other words, there were no dealings, no payments, no deliveries.

One second.

No, I have no further questions.

The defense has three questions.

We can allow that.

The witness did not object.

No objections?

Thank you.

A ten-minute recess is announced.

At this time, please step aside, into the courtroom.

The witness is very...

So the recess is until 11:00.

Pages.

Please tell us,

please take a seat in the courtroom.

The witness has been brought to the court hearing.

Okinuv.

His defense counsel were invited.

Attorney Sosnin has arrived for this court hearing

Vladimir.

He is here.

Vladimir Aleksandrovich Sosnin.

And someone else from the defense as well.

And whose turn is it?

Also your defense counsel.

You also...

Witness, please stand,

I will explain your rights to you once again.

You have been brought to court for questioning as a witness.

I explain to you that you

have the right not to testify against yourself, your spouse,

or other close relatives, if you choose to testify.

You are warned

that your testimony may be used as evidence in the case,

including if you later withdraw that testimony.

You have the right to testify in your native language or in a language you speak, and you have the right

to use the assistance of an interpreter free of charge.

You have the right to file motions and to complain about actions, inaction,

or decisions of the court concerning your questioning.

You have the right to appear for questioning with your lawyer, and you have the right to request

the application of security measures if there is a need for them.

I also explain to you that in the event of

an unjustified refusal to testify or knowingly false testimony

criminal liability may arise under Articles 307 and 308

of the Criminal Code of the Russian Federation.

Do you understand your rights and responsibility? Yes, I do.

Please provide the court with your signed acknowledgment.

Do you have

grounds to refuse to testify? No.

There are no such grounds.

Please answer the prosecutor's questions first, then the defense's.

I will give an opportunity

for your lawyers to ask you questions after the parties have finished questioning you.

Is that clear? Please proceed.

Andrei Viktorovich.

Let me remind you, the defendants are Ofitserov

and Navalny.

What is your relationship with them?

None.

Do you currently bear ill will toward either of them? No.

Personally. Please explain.

In 2009, during the period from April to October,

where did you work and what position did you hold?

In 2000.

In 2009? Starting in April,

I worked for the government of Kirov Region.

What were your duties?

As far as you remember, what had the governor assigned you to do?

Well, I was responsible for economic matters, in particular,

paperwork, preparation, and analysis

of various documents for the governor.

Did your work concern the situation

related to analysis of the timber industry complex?

It all depended on the governor's instructions.

In particular, in 2009 did you familiarize yourself with the condition of the industrial complex

of Kirov Region, in particular with the activities of Kirovles?

Yes.

I familiarized myself with it and traveled around the districts.

I visited the forestry enterprise branches, went around and inspected them.

Did you visit the forestry enterprises alone or with someone?

I met with the head of the enterprise, Opalev.

To assign a task?

Was anyone else present on the trip?

Well, as I said earlier,

in the winter of 2009 there was a trip around

the forestry enterprises.

With Vyacheslav Nikolaevich Sobolev and...

Pyotr Ofitserov was with us.

That was the first time we saw him,

for the first time...

Andrei Viktorovich.

Did you meet with Ofitserov afterward?

Did you see him anywhere?

Well, I ran into him in Kirov.

In particular, in the building of the Kirov Region government administration.

Meeting, perhaps, in the government building.

As far as you know,

that year Navalny worked in the regional government administration.

What was his position?

For the government.

I saw him.

Did you see Navalny and Ofitserov together

in the government building?

Did they ever meet?

It is possible that they did.

As far as you know, were their relations friendly or not?

I don't know.

Are you familiar with the companies

of the Vyatka Timber Company? No.

Are you aware that

the KOGUP Kirovles enterprise was cooperating.

With the Vyatka Timber Company? No.

Andrei Yuryevich,

could you give us a bit more detail about the familiarization trip?

Please, go ahead.

There was no use of it in any way.

What issues were being addressed, and by whom?

I was tasked with familiarizing myself

in general with the timber industry complex of Kirov Region.

In particular.

As the main example, we chose the enterprise

KOGUP Kirovles.

That was because it was

one of the largest enterprises engaged in timber harvesting.

Processing, and its sale as well.

Moreover, it was

an enterprise owned by the government

of Kirov Region. Essentially,

and so, together with the head

of the enterprise, Opalev, we traveled around

the forestry units, those local forestry enterprises.

We visited, I can't

name them all, but I understood that we were looking into the matter thoroughly.

There were also additional visits.

We were in Podosinovets, we were in Oparino as well.

Naturally, the trip ended in Luzsky District.

On the way back, Opalev and I were returning alone.

By that point,

Ofitserov was no longer with us.

Ofitserov was present, but not for the entire trip.

That is, the trip

we started together.

The regional team dropped away from us, so to speak. I

honestly don't recall.

Andrei Yuryevich, please clarify: what exactly was Ofitserov's role on this trip?

Was he representing some organization?

And was he acting independently?

I don't know.

I remember that at the appointed time we had agreed to meet in Kaluga

with Sobolev.

Vyacheslav Nikolayevich, in order to set off

on this trip.

When I arrived there,

I saw

Pyotr; later I learned that it was Pyotr Ofitserov.

As for the rest,

his motives and objectives,

I can't say anything about them, I don't know.

He was simply riding in the car with us.

Did you take part in any working

groups connected with Kirovles's activities that traveled to Transnistria?

No, I did not.

In a working meeting.

At the administration

of the President of the republic, did you take part

at all?

Most likely not,

because I prepared documents directly for the governor.

If there are no questions, then why?

The defense.

Yes, Oleg Viktorovich,

it's strange to try to remember what I was wearing on that trip.

I don't remember.

Well, warm clothes, Ilya

There was some kind of suit; I was probably in a suit.

No, that

doesn't matter to me.

Former State Duma deputy (member of the lower house of Russia's parliament).

Andrei Viktorovich, please tell us.

Please, you said that you had been instructed

to study enterprises in the forestry sector, in particular Kirovles.

Based on that review, what overall conclusions did you draw

regarding the Kirovles enterprise?

Regarding the enterprise.

One of the major enterprises.

The enterprise was in an extremely difficult economic situation, that is,

there was no clear coordination of work

between the heads of the forestry units and the management of Kirovles itself.

Also, as you yourself remember, after 2008, in general,

not only Kirovles, but other enterprises as well,

virtually all enterprises

in the forestry sector of Kirov Region were in a deplorable state,

because there were real problems with selling their products.

Essentially, and since there was

ineffective management at these enterprises.

Essentially,

it was experiencing difficulties.

It really was in that kind of situation.