Since this morning I’ve been flooded with questions like, "Is it true that you’re in conflict with Aeroflot because of Tina Kandelaki?" All because of this article in Vedomosti. Let me answer everyone at once (bearing in mind that I am a member of the Board of Directors of Aeroflot and am bound by a confidentiality agreement): 1. Of course, I have no conflict with Aeroflot. Much less because of Tina Kandelaki. Especially since the flight attendant cap really suits her.
There is a work-related issue connected with the fact that I discovered a contract, concluded through a very strange procedure, with T. Kandelaki’s advertising company—Apostol LLC—for the production and “online promotion” of video clips. In my view, the contract was concluded in violation of Federal Law No. 223-FZ, which regulates procurement by state-owned companies, as well as Aeroflot’s own internal rules. As a conscientious member of the Board of Directors, I am working to have the situation corrected. So far, there is no reason to believe that the other board members will take a different position. 2. It is important to understand that although the contract is fairly large (64 million rubles, about $2 million at the time), it is not large enough to be reviewed by the Board of Directors. That falls within the authority of the company’s Management Board, and I am not going to meddle in matters outside my remit. Let them sign contracts with whomever they see fit. With Tina Kandelaki’s advertising company, Nikolai Baskov’s security firm, Filipp Kirkorov’s HR service, or Vladimir Pekhtin’s real estate agency. 3. When I say “let them sign with whomever they want,” what we all of course mean is “whomever they want, but in accordance with the law and the rules.” In this whole situation, Tina Kandelaki’s earnings are the very last thing that interests me; what very much does interest me are the shareholders’ interests and the company’s procurement rules. There must be no exceptions: “non-competitive” contracts and all sorts of “special exception” arrangements are unacceptable. The Board of Directors should have zero tolerance for such things. And if it has happened anyway, then everything must be corrected and the fact of the violation made public. I am convinced that this is in the interests of both the company and its shareholders. Aeroflot is the leader of the Russian air travel market. It ranks among the top five European airlines by passenger traffic. Marketing accounts for a significant share of its spending. Advertising budgets are large. An advertising contract with Aeroflot is prestigious, and there is no doubt that any tender for advertising services would attract a line of the market’s leading agencies. And if we have the opportunity to choose the best offer through a tender, then why do we need some murky non-competitive arrangement? For example, 3 million rubles (about $95,000 at the time) was paid for this “Interview with T. Kandelaki and the CEO of Aeroflot.”
(this is just one excerpt; you can watch the full version on Aeroflot’s channel) Perhaps someone else would have done it for less. Or for more, but better. That is exactly why tenders exist. Incidentally, I am solving Mrs. Kandelaki’s problems completely free of charge: under the contract, the interview is supposed to get 200,000 views, and right now it has 1,700. I’m not even sure a business interview like this one (unless, of course, it were conducted by Lady Gaga) can be “boosted” to 200,000 views by any means other than bots. It’s a dubious genre for YouTube, after all. But, again, I do not consider myself an expert on that question. 4. I should note that, overall, Aeroflot’s procurement practices look fairly satisfactory and generally follow competitive procedures. 5. Serious disagreements with the company’s management and some members of the Board of Directors did indeed arise at the last meeting, when certain “media leaks,” including about this contract (which later turned out to be false—up to today, not a single media outlet had written a word about Aeroflot and Apostol; I checked), were used as a pretext for adopting a completely unprecedented and outrageous decision: “the voluntary restriction by the Board of Directors of board members’ right to receive company documents.” The company’s management will now decide which documents to provide and which not to provide. To call this absurd would be a massive understatement. The Board of Directors is the company’s main governing body. Management is subordinate to the board. How are board members supposed to do their job if management itself decides which documents to show at meetings and which to withhold? I am, for example, a member of the audit committee. To audit anything, you need documents. Obviously, if management (in theory) wants to avoid scrutiny in order to conceal abuses, it will do everything possible to keep the relevant documents out of my hands. And now there is a board resolution that explicitly allows this. What especially outrages me is that this decision was adopted immediately after I requested for review all contracts worth more than 20 million rubles (about $630,000 at the time) concluded under a procedure similar to the Apostol contract. All of this really looks like an attempt to hide some kind of abuse from scrutiny. And it is entirely possible that no such abuse exists; perhaps some bureaucratic reflex simply kicked in inside management’s head and a big red sign lit up saying “KEEP OUT.” I consider this decision completely unacceptable and seriously damaging to corporate governance practices at the company. I will fight to have it reversed. You can read my brief dissenting opinion here, which I asked to have included in the board minutes. 6. I fully understand the difficult situation the company’s management found itself in because of this non-competitive contract. My personal view is that Aeroflot was pressured into signing it. We are dealing with a classic situation in which state propagandists are placed on a secret but lucrative contract. That is how the entire “Kremlin internet media” machine works—latched onto state-owned companies. The same Apostol is already feeding off Rostekhnologii (Russian Technologies, a state corporation)—it recently did a “rebranding” for them for $1.5 million. Because Rostekhnologii obviously desperately needs an expensive rebranding—give me a break. People just can’t recognize its products sitting on supermarket shelves across the country without a rebrand. This is exactly how, through a generous stream of state money, all this filth gets paid for—things like “election observer corps for clean elections,” which will of course prove that GOLOS (an independent Russian election-monitoring group) is wrong and that our elections are wonderfully honest and fair. This is how the bots that flood Twitter before every opposition rally are paid for—which is, in fact, the only thing Apostol and its “online promotion” are really known for. If you think all these people so passionately and publicly love Putin for free, you are very much mistaken. Everything is paid for. By you, no less. Naturally, this is only my opinion, and I have no proof. You could torture Vitaly Saveliev by threatening him with flights on the Sukhoi Superjet, and he still would never admit it; he would say the contract was signed voluntarily. Therefore—and this is important for everyone to understand—the dispute concerns exclusively the legality of how the contract was concluded and the tender procedures, not the identity of the contractor. All of this political material is not the subject of discussion within Aeroflot’s Board of Directors. Let’s announce a transparent, fair tender; let Tina Kandelaki and her Apostol submit the best terms and the best price and win it. We will all congratulate her. 7. AEROFLOT is Russia’s leading air carrier and a member of the global SkyTeam airline alliance. The alliance’s combined route network includes 1,000 destinations in 187 countries. In 2012, Aeroflot carried more than 17.7 million passengers, and 27.5 million including the airlines of the Aeroflot Group. Aeroflot operates one of the youngest fleets in Europe, consisting of 131 aircraft. Aeroflot is based in Moscow at Sheremetyevo International Airport. Aeroflot was the first Russian carrier to join the IOSA operator registry and continuously renews this certification. The airline has also successfully passed the ISAGO ground handling safety audit. It holds a unified certificate of compliance with the ISO 9001:2008 standard. Aeroflot is the General Partner of the XXII Olympic Winter Games and XI Paralympic Winter Games held in Sochi in 2014 in the “Passenger Air Transportation” category. Starting March 22, tickets can be upgraded with miles at check-in counters. Fly Aeroflot!