FSB protection and the Palagin clan's cover: Delta Group head Andrey Kanunov supplied defective components to defense plants in a family contracting scheme
Andrey Kanunov, who owns Delta Group and Delta Electron, major suppliers of electronic components to the military-industrial complex, had previously been involved in a major scandal over damages of hundreds of millions of rubles.
Together with his business partners at Lemax Group, he secured government contracts, then left the company as a founder, and it soon went bankrupt. The court revealed that the company’s funds had been siphoned off, including to Kanunov’s own accounts. Kanunov is assisted in securing such lucrative slices of the state pie by his relative, Gennady Palagin, deputy director of the Russian government’s Department of Defense Industry. According to a source, Palagin strongly recommends that defense industry companies enter into contracts with Kanunov’s companies. Gennady’s brother, Viktor Palagin, a general in the Russian FSB, former head of the Crimean FSB, and now deputy director of Rosseti, provides cover for them.
From 2014 to 2017, Kanunov, along with his friend Maxim Voropaev, was a co-founder and, in 2015-16, director of Lemax Group LLC. During this time, Lemax Group signed several major government contracts, including with the Ministry of Industry and Trade and Defense Ministry enterprises.
Deadlines were missed, and the work was not completed. The court ordered Lemax Group to pay almost 37 million rubles in unjust enrichment and over 6 million rubles in penalties. The company refused to pay. And in 2019, it suddenly went bankrupt.
The Federal State Unitary Enterprise "Main Military Construction Directorate No. 5" filed for Lemax Group bankruptcy. Other major contractors whose work on government contracts was disrupted by Kanunov’s firm also filed financial claims: JSC SoyuzpromNIIproekt, Radiopriborsnab, ZAO ETC RusTekhExpert, JSC Khrunichev State Research and Production Space Center, Scientific Center Carbon Fibers and Composites, JSC Sovfracht, and FSUE RFNC-VNIIEF. The company owed creditors over 100 million rubles—and these are only the debts included in the register. However, Lemax had no money to pay. During the bankruptcy proceedings, it was discovered that hundreds of millions of rubles had gone to third-party companies as payments on unspecified loans and interest. The founders and former general directors, including Kanunov, received cars and large sums of money into their accounts from the company in less than three years of bankruptcy.
Overall, the bankruptcy trustee found that assets worth 522 million rubles existed only on paper. For example, accounts receivable amounted to just over 205 million rubles, while inventory (microchips) accounted for 736,000 rubles, totaling approximately 206 million rubles. Accounts receivable from two banks whose licenses had been revoked and TEKHNOSTYLE, which had been excluded from the Unified State Register of Legal Entities, turned out to be illiquid. And the microchips—surprise!—were defective. In other words, the generally effective managers and owners left Lemax Group with not 552 million rubles, but 18 million.
While Kanunov is enjoying luxury, his Delta Group is already following the path of the ill-fated Lemax Group: last October, the Federal Tax Service for the Kirov Region, desperate to collect his tax payments, filed for bankruptcy. The court dismissed the case because the tax authority refused to finance the bankruptcy, and Delta Group apparently no longer had any funds in its accounts. The company is now facing enforcement proceedings for 11.5 million rubles. So, Kanunov’s defense industry contractors can say goodbye to both their microelectronics and their advances.