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. Last Updated: 07/27/2016

Sistema Ousted From Top PC Factory

MTIVK representative Vladimir Chepko talking to reporters at the Kvant compound in Zelenograd on Friday.
ZELENOGRAD, Moscow Region -- Just as the dust began settling at one major local enterprise, it began swirling at another.

On Thursday, a day after a standoff between rival general directors at local vodka monopoly Kristall ended, another erupted at Kvant, the biggest computer factory in Russia.

On one side of the conflict is IVK, a leading personal computer manufacturer, and on the other is Sistema, a giant holding company that controls leading mobile phone operator MTS and has close ties to Moscow Mayor Yury Luzhkov.

Accounts vary on how it happened, but what is clear is that IVK representative Vladimir Chepko took control of Kvant after a pre-dawn swoop on the factory 30 kilometers north of Moscow and has not left the compound since.

Sistema's Sergei Kabayev, who replaced Chepko as general director Aug. 22, said by telephone Friday that two of his security guards were hospitalized after Chepko descended on the factory with dozens of armed men from the Interior Ministry and Zelenograd police department, but he could not name the hospital.

His deputy, Vasily Konstantinov, was quoted by Vedomosti on Friday as saying that he "barely got out alive."

Chepko denied that force had been used.

"I'm a civilian, not a military general," he said in an interview at the factory Friday. "I can't control military divisions, let alone armed ones. I would like to know what kind of commander would allocate 50 to 60 soldiers to storm a civilian target."

Sistema and IVK have been exchanging legal blows to gain control of Kvant since 1998, when, according to Sistema, IVK used a forged power of attorney to capture 34.3 percent of Sistema's 69.6 percent voting shares in the company.

IVK, for its part, says that before it got legal control of the 34.3 percent stake, Sistema used forged documents to gain a controlling stake. IVK says it now owns 53 percent of the factory, while Sistema owns 35 percent.

Whoever controls Kvant controls some 20 percent of the nation's PC market, which is enjoying one of the highest growth rates in the world. When operating at full capacity, Kvant's 3.5 kilometers of production lines can roll out 50,000 units per month. It also has lucrative government contracts to supply computers to various ministries.

While Chepko may now have physical control of the plant, Sistema and Kabayev have no intention of giving up the fight.

Immediately after Chepko's return, Kabayev ordered some of his men to block the factory's gates with their trucks.

Rodion Ulybin, Sistema's head of corporate restructuring, said the move was designed to keep Chepko from stealing company property.

The blockade, however, did not last long.

Ulybin said some 40 local police officers in 10 police cars showed up Friday afternoon and had the trucks towed away -- but only after smashing their windows and arresting the drivers, an accusation that could not be confirmed.

At 4 p.m., however, the scene outside the factory was calm.

A large earthmover was strategically parked a few meters in front of the gates to ensure an open passage for deliveries. One police car was parked next to it, and three trucks -- windshields intact -- were parked nearby, though their doors had been sealed by police.

Inside the sprawling plant, technical director Viktor Plekhanov said a major client, Fujitsu-Siemens, had called to ask "if there is a revolution going on" and whether production had been slowed.

Plekhanov said that while a consignment of hard drives was not able to be dispatched Friday, production was normal.

"I don't know what goes on out there -- my job is in here," he said.

Sistema said it has filed complaints with the Moscow region arbitration court, the Prosecutor General's Office and the Interior Ministry. It has also asked Moscow police chief Vladimir Pronin to do something about the involvement of the Zelenograd police, although it is not in his jurisdiction.