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Moscow court finds Mkrtchan guilty, confiscates $3 billion and jails ex-ISD CEO for 9 years

Moscow’s City Court has found Oleh Mkrtchan, CEO of the Industrial Union of Donbas (ISD) Corporation, guilty of embezzling of more than 1 billion rubles (over $ 15 million) from Russia’s state-owned VEB corporation. He was sentenced to nine years in a penal colony, fined 900,000 rubles (about $ 13.5 thousand) and 199 billion rubles (almost $3 billion) in favor of the victims, the Moscow-based news agency Interfax has reported.

Mkrtchan’s lawyers say they will appeal the verdict.

The trial of Mkrtchan was closed, since there were documents with the stamp "secret" in the case. The judge announced only the operative part of the sentence. The businessman was found guilty of fraud on a particularly large scale.

The investigation and the court found that Mkrtchan organized the theft of Vnesheconombank's credit funds allocated for the development of the corporation in the amount of over 1 billion rubles. Igor Popovsky, the convict’s lawyer, said that the case concerns the theft of $2.5 billion.

Moscow’s City Court also satisfied the civil lawsuit of the injured party, the non-profit organization Industrial Assets Fund (became the injured party as a result of the transfer of rights) in the amount of over 199 billion rubles.

Prior to the execution of the sentence, Mkrtchan’s property, including a car, as well as 1.5 million rubles, over $40 thousand, EUR 14,000 will remain under arrest.


  • Oleh Mkrchtan is a former business partner at ISD with Member of Parliament SerhiyTaruta. The corporation includes the Dneprovsky Iron and Steel Works, Alchevsk Iron and Steel Works and Alchevsk Coke Chemical Plant, the ISD Dunaferr andnd the ISD Huta Częstochowa.
  • Mkrchtan was detained in Moscow in February 2018 in a particularly large-scale fraud case. At the end of December 2018, the Moscow-based Kommersant newspaper wrote that the UK tightened the charge on Mkrtchan. According to the publication, he was accused of the fact that VEB in 2011 issued a loan of 85 billion rubles to ISD for the development of the Alchevsk Metallurgical Plant on the security of shares of this enterprise. For part of this money, a power station was built for the plant and new equipment was purchased. In 2014, Mkrtchan on behalf of the plant paid the bank $40 million as interest on the loan, and in 2014-2016 payments became impossible due to the war in the Donbass. In 2016, a VEB subsidiary lending to ISD transferred the right to claim the debt of NPO Industrial Assets Fund (also VEB’s wholly-owned subsidiary) engaged in troubled industrial assets, the newspaper wrote.
  • Earlier, ISD owners noted the loss of control over the assets of the corporation in the Donbas, including over the Alchevsk Iron and Steel Works and the Alchevsk Coke and Chemical Plant.
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