To finance the Hotel Moscow project, associates at Dekorum took out an $87.5 million loan from Deutsche Bank, according to Novaya Gazeta. However, the overextended company was hit with heavy losses during the economic downturn and eventually defaulted.
The city government intervened to cover the loan, on the condition that Dekorum transfer an additional 25.5 percent stake to the city, which has yet to happen.
In mid-June, Mr. Yegiazaryan’s offices were raided by police. Investigators suspect that the loan and failure to repay may have been planned from the outset.
Mr. Yegiazaryan is now keeping a low profile and could not be reached for comment. Dekorum’s offices are closed.
Reports have circulated in the media that he may be stripped of his seat in the Duma, the lower house of parliament, and with it, immunity to prosecution. Moreover, a new anti-mafia law signed earlier this month by Mr. Medvedev aims to punish those who leverage their ties to organized crime.
Mr. Yegiazaryan “was always considered one of the most corrupt,” said Ms. Latynina, the investigative journalist. “For sure, he was never a model businessman.”
The city construction department, meanwhile, has taken control of the Hotel Moscow project.
On a recent afternoon, empty scaffolding ringed the vast exterior. Only an artist’s rendering of the completed building on a billboard affixed to the chain-link security fence suggests its realization.
City authorities say doors will open sometime in 2011, years after the overhaul began. That may be optimistic.
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