Tech Company CEOs Arrested in Glonass Embezzlement Case

MOSCOW, May 17 (RAPSI)The previous and current general directors of high-tech company Synertech have been arrested on suspicion of embezzling funds from the federal program for the Glonass satellite navigation system, the Interior Ministry’s Moscow Department said on Friday.

The current chief executive officer was taken into custody, and the former CEO was placed under house arrest after Moscow’s Tverskoi District Court granted the investigators’ warrant request on May 16, the same day that Moscow police reported another major embezzlement from Glonass, saying that Synertech management has stolen at least 85 million rubles ($2.7 million) “supposedly as payment” for conducting a research project.

Synertech is a joint venture between Russian Space Systems with two European companies: EADS Astrium and Tesat Spacecom. It was set up in 2005 to promote the mutually beneficial cooperation of space industry enterprises in the creation and use of innovation technology for the manufacturing of space equipment.

The Interior Ministry earlier reported the embezzlement of over 565 million rubles ($18 million) of federal budget funds allocated for the Glonass program, and initiated criminal proceedings. The ministry suspected Russian Space Systems’ management of concluding research contracts with commercial organizations that had neither the equipment nor the qualified personnel to implement the stipulated work.

The commercial companies involved are the Space Instrument Making research and production association and Synertech.

The Global Navigation Satellite System (Glonass), which was officially launched in 1993, is Russia’s answer to the US Global Positioning System (GPS). It provides data for real-time positioning and speed of surface, sea and air objects to within an accuracy of one meter.

The Glonass program was initiated in the 1970s but underwent a radical revamp in 2001. The 24 satellites comprising the system had been put into orbit by 2010, though only after several costly malfunctions and launch failures by carrier rockets. The program has cost 140 billion rubles ($4.4 billion) to implement to date, and its budget for 2012-2020 stands at a further 326 billion rubles ($10 billion).

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