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. Last Updated: 07/27/2016

Businesses in the Red Beware!

Mayor Yury Luzhkov lashed out at private businesses Tuesday, saying those that aren't making money should be forcibly shut down sooner instead of later -- free market or no free market.

Nearly one-third of Moscow's medium and big businesses are loss-making "parasites" feeding on the city economy, a city bankruptcy report said.

If these enterprises cannot be turned around, the mayor declared, they should be liquidated before they file for bankruptcy and default on their debts.

The bankruptcy report was presented at Tuesday's City Hall meeting.

Medium and big businesses are generally considered to be those with 40 or more employees. There are 1,402 of these businesses in the red, according to city figures, representing 27 percent of the total. Small businesses were not included in the study.

The City Duma committee that drafted the report has been working since 2002 with local businesses to help them stay afloat. Committee head Nikolai Badayev said one-quarter of the businesses consulted had been saved from bankruptcy, but only with city aid.

Luzhkov was unimpressed. "This work is being done slowly and sporadically," he said. Firms that lose money cost the city by not paying taxes, compensating employees poorly and defaulting on loans, a committee member said.

But the report was criticized by officials who say failing businesses in many cases are not legitimate businesses but fronts for criminal organizations.

State Duma Deputy Pavel Medvedev said "there probably are a few unlucky" businesses that genuinely could use help. But the bulk of troubled enterprises, he added, are run by tax-dodging criminals.

Falsified passports are often used to open up fly-by-night companies that serve as fronts, Medvedev said.

Medvedev asked city officials to help enforce laws against passport forgery. Luzhkov interrupted Medvedev, insisting this was the job of State Duma deputies. "All right," he added, "I'll do my best to intervene."