Steel barons: the Cluj plant, deep in debt


The Ukrainian billionaire Serhiy Taruta, former governor of the Donsab region, made his fortune from the metal industry but left the Cluj Heavy Machinery Plant to waste. It was the same thing his business partner, Russian billionaire Aleksandr Katunin, did.

On the other hand, the Cluj Plant is the smallest problem of the two associates. The Russian VTB Bank accused them of being granted a 180 million dollars credit for one of their companies but using the money for other purposes than the ones declared. The company became bankrupt, but the bank is trying to recover the debt. Up until now it managed to seize Russian’s Katunin and his family properties and accounts in Argentina. Goods in Finland and Cyprus have also been identified.

The Plant privatization

The most state of the art energy equipment manufacturing plant was built in Cluj, in 1970, under Nicolae Ceauşescu’s regime. The Cluj Heavy Machinery Plant (CUG) manufactured heater equipment, special purposed boilers, steam boilers, hot water boilers and burners. Then it started manufacturing metallurgical equipment for the hot-rolled sectors and the smelting of molten cast iron.

In 1985, the Plant had over 8,000 employees manufacturing complex energy equipment that were to be exported. After the fall of Ceauşescu’s regime, the Plant was split into six companies. FORTPRES CUG took over from the former heavy machinery factory.

In 2004, the company was privatized. Back then, the controlling stake was bought by the Donbas Industrial Union Ukrainian consortium, founded by Serhiy Taruta, Vitaliy Haiduk and Oleg Mkrtchian. A former Ukrainian vice prime-minister during 2002-2003, Haiduk has an estimated fortune of 2.3 billion dollars. Deputy Serhiy Taruta, former governor of the Donbas region during the Russian-Ukrainian conflict has a fortune of well over 1.2 billion dollars.

In 2010, Russian Aleksandr Katunin bought 50.1% of the Donbas Industrial Union. He bought the shares through his company, Switzerland based Carbofer Group.


Early this year, former governor of the Donbas region, billionaire Serhiy Taruta announced that his business partner Oleg Mkrtchian was detained in Russia on charges of embezzling the credits granted by Vnesheconombank, the development bank of Russia. The international press reported that, in 2015, the Donbas Industrial Union recorded over 1 billion dollars loses. Another Russian bank, VTB Bank, granted 180 million dollars worth of credits to the Yeniseisky Fanerny Kombinat LLC. The money was secured by Serhiy Taruta and Russian Aleksandr Katunin. The company became bankrupt and the two business partners are accused of using the credit for other purposes than the one officially declared. It seems that an important part of the secured credit ended up in Argentina by means of an intermediaries’ chain. In Argentina, the Russian Katunin owns a true real estate empire.

Seizing of goods in Argentina and Finland

Until 2014, the bank managed to retrieve from the lenders about 60 million dollars. Three years later, in March of 2017, VTB Bank requested Argentinian authorities to seize all of the Katunin family goods and the goods of another seven people used as intermediaries. The Argentinian authorities seized 7,000 hectares of land in the Chubut province, where a hectare of land is worth about 60,000 dollars.

In Finland, authorities seized a hotel owned by Katunin. Deputy Serhiy Taruta was not exempted from precautionary measures. He was seized eight assets, including the ones he owned by means of off shore companies.

Alexander Katunin and Serhiy Taruta sued the bank at the Carabian Justice Court. (More on the matter here:

CUG at a deficit

Meanwhile, the Cluj Heavy Machinery Plant reports heavy losses. In the 2015 tax year, CUG had only 24 employees and reported loses of over 2.7 million Lei. It was also then when it reported unpaid taxes and duties worth over 1.3 million Lei, while the turnover was a little over 550,000 lei. Things were not better in the last tax year. The Plant reported over 6.9 million Lei in loses and a turnover ten times smaller.