Continent airline director-general accused of fraud freed in courtroom.

MOSCOW, August 4 (Itar-Tass) —— Moscow’s Meshchansky Court on Wednesday, August 3, refused to issue an arrest warrant for Continent Airline Director-General Vladimir Krasilnikov, who was detained on August 2 on charges of fraud and deliberate bankruptcy.

The court thus rejected the investigator’s request for Krasilnikov’s arrest and let him go in courtroom.

The investigator insisted that Krasilnikov could hide, put pressure on witnesses or otherwise obstruct the investigation.

But the prosecutor said the criminal case against Krasilnikov had been opened in violation of legislation.

“The preliminary inquiry did not determine the exact number of defrauded passengers or stolen money,” the prosecutor said, adding that the case only contained the testimonies of several passengers and the defendant himself.

The prosecutor stressed that according to presidential amendments to legislation the defendant cannot be put in custody if the charges brought against him concern entrepreneurial activities.

He also noted that there is not enough proof that the airline director-general can hide from the investigation or obstruct it. Besides, Krasilnikov is 62 years old and has a five-year-old daughter in addition to three adult children.

“The investigation did not prove the impossibility of using another, milder, measure of restraint,” the prosecutor said and asked the court to reject the investigator’s request for arrest.

Krasilnikov himself and his lawyer asked for a milder measure of restraint than arrest.

After the Federal Agency for Air Transportation (Rosaviatsia) recalled the license from Continent, which had found itself on the brink of bankruptcy because of a multi-million-rouble debt, the company suspended flights from July 30. Sixty-nine flights were cancelled on July 29-31, leaving more than 3,000 passengers stranded at airports.

Following the cancellation of flights, the federal government interfered to protect the rights of passengers in the East Siberian, Volga, Urals and southern regions and make arrangements with other airlines for their transportation.

The Continent airline went bankrupt because of the purchase by Krasilnikov of several planes using the airline’s proceeds without the consent of the principal shareholder, a source at Rosaviatsia told Itar-Tass.

“Krasilnikov, the director-general of the Continent airline, who owns 25 percent of the airline’s shares, bought several Tu-154M planes in June using the airline’s proceeds for Avia Mir Leasing, which he co-owns with his wife. According to preliminary information, he made the purchase without the consent of the other shareholder who has 75 percent of the airline’s shares,” the source said.

According to Rosaviatsia, this resulted in a considerable portion of proceeds from the sale of air tickets being spent on the purchase of the aircraft to become Krasilnikov’s property. This caused a gap between the airlines’ revenues and expenditures and actually brought the company to bankruptcy.

After looking into numerous cancellations of the flights by the Continent airline, the Russian Investigation Committee started criminal proceedings on charges of fraud by the airline head and Rosaviatsia officials.

Sources in Rosaviatsia said, however, that the planes had been purchased after Rosaviatsia’s territorial department had investigated the airline’s financial and economic state in April 2011.

Investigation Committee spokesman Vladimir Markin told Itar-Tass that the investigators were ready to accept passengers’ petitions for damages around-the-clock.

Markin said earlier that that the Continent CEO and Rosaviatsia officials would be sued for fraud and might face up to ten years in prison.


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