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. Last Updated: 07/27/2016

Gazprom Blasts Bank, Engineering Firm

Gazprom on Monday accused Bank of Moscow and engineering company E4 of poor business practices as it is seeking to recover more than $300 million in investment.

Gazprom said one of its generating units, OGK-2, paid E4 the equivalent of $321 million in rubles and euros in 2007 in advance for building two power units, but the work fell severely behind schedule.

OGK-2 terminated the contract in April and is struggling to get the money back, in part because a Moscow court ruled that the guarantees on the payments that the Bank of Moscow had issued were void.

E4 denied any wrongdoing. Bank of Moscow did not immediately respond to a phone call and an e-mail seeking comment.

Gazprom, which owns 44 percent of OGK-2, said in a statement that the delay showed that E4 was incapable of carrying out construction in the energy industry. It also took a dig at the bank.

“The irresponsible position of Bank of Moscow is regrettable,” Gazprom said. “The bank’s inability to ensure execution of its financial liabilities inflicts irreparable damage to the reputation of one of the country’s largest financial institutions.”

E4 referred inquiries to a July letter by the Audit Chamber, a government financial watchdog, that blamed OGK-2 for hampering the engineering company’s work for the five months ending in April. The letter, addressed to OGK-2, said it violated the law by terminating the contract.

E4 is seeking 15.2 billion rubles from OGK-2 as compensation for the work it did on the power units and penalties from subcontractors.