Aircraft

Moscow's Chernyshev engine plant, producer of RD-33 and -93 jet engines, is at the centre of a dispute between managers and shareholders, with claims of corporate raiding and deliberate bankruptcy.

A shareholders' protest meeting was held outside the 51% state-owned plant on 19 June, ahead of its AGM.

The firm admits annual losses of around $8 million, despite having $2 billion worth of orders. Shareholders claim the losses are three times that sum. Chernyshev has a full orderbook to 2012, with orders from China for its FC-1 fighter and India for MiG-29s.

Shareholders claim that the firm's chief executive Alexander Novikov is deliberately running the plant into the floor to provoke a bankruptcy, after which raiders could buy up the plant at a knockdown price for lucrative real estate development.

Chernyshev deputy chairman Gennady Arkhipov denies the claim, and says that corporate raiders were behind the demonstrators themselves. Management says the cause of the crisis is caused by the big swings in the value of the rouble relative to the dollar.

"The rouble is now worth 23 to the dollar, and when we signed these big contracts with China and India years ago it was over 30. Since then, prices for things like titanium, steels and kerosene have gone up by between two and five times," Arkhipov says.

The government is unlikely to allow Chernyshev to go bankrupt, as it has previously intervened in similar disputes involving military-industrial plants and has consolidated almost all of them into large state holdings in the past few years.

It has earmarked significant funding for the plant to relocate production of helicopter turboshafts that are now produced in Ukraine.