July 1995
Zhorik’s office sat across from mine. I regularly watched clubfooted old men in jackets and ties, dead ringers for Viktor Stepanovich, file past. These were red directors from the provinces who’d sniffed out a minority shareholder with cash and come to make his acquaintance. What’s more, Zhorik would invite the provincials to take a trip to the White-Stone City on our dime. He rejoiced boundlessly at each arrival, wrapping them in bear hugs and crying, «Great to see you, old man! Where’ve you been hiding? How’s life?» He’d hand out trinkets – a Parker fountain pen or a Tissot wristwatch – drag them round the restaurants on Tverskaya, haul them off to the trendy Night Flight club.
Kostya would get acquainted with the enterprise’s books, Seva would go make inquiries. Based on the results, they’d write up a memo. A short one: «Unable to identify the beneficiaries or the degree of resistance to expect.» Or a very short one: «Rehabilitation not feasible.» Sometimes they’d write a memo with attachments: «Okay. Attachments 1, 2, 3, 4, 5…»
After studying the attachments, Zhorik would give the go-ahead. I’d fly out to the plant with Karabas and a hundred thousand dollars in five sealed envelopes. After the sauna with staff happy to do anything for a little present, we’d relocate to the grand restaurant.
I’d confide in the director, in strictest confidence, that the government had taken a course toward privatizing Soviet industry, that private capital now had free rein. In keeping with the state’s little schemes, we’d formed a holding company and were planning to cooperate with his enterprise. We had the funds and the means to burn cash buying up shares, but why bother? The money would just end up in Yolkin’s pocket, along with the ginger scoundrel’s. It made more sense to use a scheme we’d already worked out: put the money into developing the plant and boosting profits. In a year, if Gennady Andreyevich knocked Yolkin off his perch, we’d be clean. Right now it made sense to adapt to circumstances and rake things in under ourselves. We’d see later how to proceed – whether to return the plant to the state by law, or keep it for ourselves by law. It all depended on what the law turned out to be in a year’s time. Let’s hedge our bets.
I’d pull papers from my briefcase and read out: «The freely tradable shares of your joint-stock company are worth nine hundred forty thousand five hundred eighty-two dollars and thirty-eight cents on the market, at yesterday’s Central Bank rate.» A laughingstock figure, really – a mere twenty-two percent, neither here nor there.
I’d set the paper aside, lean toward the director, and drop my voice half a tone, the way Zhorik had taught me, and continue:
– Here’s how we’ll do it: we’ll register a closed joint-stock company in the names of the three of us – me, Georgy, and you – with equal shares. Our side’s job is to pour nine hundred forty-one thousand dollars into the new company’s charter capital and, apropos, arrange a two-room apartment for you in Moscow. Your job is to transfer the enterprise’s assets to the new company at book value. We’ll split the resulting profits between ourselves, no outsiders allowed in. Let the outsiders go buy up shares of the old joint-stock company if they want in. We know the scheme, this isn’t our first day at work, it’s airtight. Here are five envelopes – this one’s yours. The other four are for the governor, the mayor, and the top brass, to cover the scheme.
After a short pause he’d fold down his fingers one by one:
– First option. You take all the envelopes and answer for all the future problems. Second option. You take your own envelope, and we handle the rest of the problems. No rush – think it over. We’ll leave the envelopes with you. We’ll discuss how to move forward in a week. We trust you! This envelope’s yours, the rest are at your discretion. You can return them in a week if you like.
Zhorik had taught me that whole speech. He’d also taught me the answers, told me there was nothing to fear. We’d register a ZAO with the exact same name as his enterprise. Say there’s an OAO «Krasnozemskkhim» registered in Krasnozemsk? We’d draw up a ZAO «Krasnozemskkhim» registered in Elista. The difference is the place of registration and one letter in the name, but the result speaks for itself: the plant gets a suitcase of American money for development, the director gets a Moscow apartment right away plus plenty of fat profits down the line.
I never answered the other questions. I’d shrug, as Zhorik instructed: details weren’t my department, my job was the strategic development of the business, and for everything else there were sturdy hands-on managers to whom I delegated authority. My vis-à-vis here, for instance – you wouldn’t find a sturdier one in all of Russia.
The director would be left alone with his thoughts. What did he know about us? A couple of fools show up, grab a few shares of a dead plant, drag him to Moscow, ply him with drink, show him whores, now they’re dangling money. There’s a catch somewhere, but where?
The old wolf of a red director would strain to figure out just what mischief good old Georgy Albertovich and that green kid Roman Viktorovich could possibly be up to.
«Heh-heh,» the director would chuckle to himself. «A pup, and already president of a holding company. A greenhorn like that won’t put one over on me. I’ll start by demanding a three-room apartment in central Moscow and a fifty-one-percent stake in the future company. We’ll see from there, come to terms with Georgy…»
That was the beginning of the end. Within a week, on Seva’s tips, Zhora would manage to dash off to the Prosecutor General’s Office – or rather, to a café on Stoleshnikov Lane, to have a little chat with an unassuming auntie – and a day or two later to a restaurant on Oktyabrskaya Square, to talk things over with a paunchy fellow. The little cafés by the Polytechnic Museum and on Maroseyka Street got worked in a single day. Lean men articulated crisply, named sums without preamble.
The ZAO would be registered, and the plant’s property transferred to its balance sheet. Soviet-era prices, when a Zhiguli cost five thousand rubles, wouldn’t buy you two bottles of beer these days. The apartments Chicha had seized from «Vatrushka» weren’t transferred that way. Vadik would register homeless people there as tenants, per documents claiming large families… then the homeless would be de-registered, the kids left on the books, some fiddling would go on with the housing registry office, and the flat would end up in the director’s ownership. Half a year to a year later it would turn out it had passed into temporary ownership only. The court would issue a ruling: the children couldn’t be struck from the residency register.
The ruling would come down the moment the plant passed into the ownership of a closed joint-stock company with three shareholders – me, Zhora, and the director. A couple of days later, by majority vote – two against one – amendments would be made to the ZAO’s founding documents. We didn’t bother asking the director, who held the majority stake. He should have read the charter documents more carefully, where it says in black and white, in the section «Procedure for Introducing Amendments and Additions to the Charter»:
- General provisions: Amendments and additions to this charter may be introduced only by resolution of the general meeting of the company’s participants (shareholders).
- Quorum and voting: A resolution to amend the charter requires a quorum (no less than two-thirds of shareholders present) and a qualified majority vote (no less than two-thirds of the total votes).
- Registration of amendments: Adopted amendments are subject to state registration in the manner established by law.
Nobody gives a damn how many shares you hold. What counts is the number of votes, and two votes against one always carries the day!
The director’s happiness would come to an end. He’d turn into a pathetic petitioner, loitering in the lobby of Proma Holding, waiting for Georgy Albertovich to deign to receive him.
He’d never wait long enough. A joint brigade would head out to the plant – Chicha’s fighters and the finance department’s tough guys, whom Zhorik had christened the «tonton macoutes.»
First they’d meet with the enterprise’s lawyer, who’d already received an envelope of cash from us for approving the ZAO’s founding documents. They’d kindly advise him to resign and stay out of sight. We had no use for corrupt lawyers.
