Russia’s hand?

The St. Petersburg millionaire Pavel Melnikov, whose properties in the Finnish archipelago were subject to a massive search operation recently, also owns extensive properties in Latvia – both by the sea and in border areas in the eastern region of Latgale, the magazine Ir has discovered. Melnikov has a temporary residence permit in Latvia, but the Security Police are doing a repeated review of it.

 

Silence on the sea and the shore. One of the three flagstaffs at the camping site Klintis (cliffs) flies the Latvian flag. The other two are empty. A short distance away, another thin pole is attached to a fence. Local people have noticed that this is to help guide a helicopter that lands on the nearby lawn. But this happens rare. “This summer he flew in twice,” Gaida Rinke a neighbor with property next door says of the owner of the camping site.

The camping site has several small wooden buildings, a bar built some years ago that is open only in the summer, many picnic tables and a few gazebos. Even though there are practically no customers in the fall and winter, the property is well protected – there is a guard, video surveillance and the area is lit at night.

The Klintis camp site is near the town of Tūja, it covers two lots with an area of 10,7 hectares in a nature preserve. The property belongs to the company Baltijas pērle (Baltic Pearl), which was founded by Pavel Melnikov, a millionaire from St. Petersburg who made his wealth in the sanitary wares and plumbing business. He is the same Russian citizen whose properties in the archipelago by Finland’s west coast were subject to extensive searches this fall.

Around 400 Finnish police and soldiers simultaneously landed on 17 islands. These are sites for companies founded by Melnikov, who have declared their business to be in tourism and real estate. During the searches, EUR 3.5 million in cash were confiscated, a modern communications center was found it the basement of the company office with modern equipment and huge collections of data not typical for tourism company.

The official reason for the raid — suspicion of money laundering and non-payment of taxes. However, there have been public expressions of suspicion that the properties close to Finnish military installations could be used in the interests of the Russian military. Surveillance cameras were installed in the territory, there were nine powerboat docks on one small island, a helicopter landing pad and a series of buildings that could house a small army.

Ir has determined by research that this Russian citizen also owns extensive properties in Latvia. Melnikov and companies he founded own around 50 hectares on the Finnish islands, but in Latvia, at least twice as large an area. In Latgale there are more than 100 hectares in the Aglona and Krāslava districts, including two lakes.

According to official databases, Melnikov bought his first properties in Latvia in 2011 – two private houses on the seashore in Melluži for almost 1 million lats (EUR 1.42 million). That was around the time that the immigration policy promoted by (politician and entrepreneur) Ainārs Šlesers took off, which, in return for an investment in real estate, allowed  citizens of Russia and other non-European Union (EU) citizens to be issued residence permits in Latvia.

The following year Melnikov turned to property-buying systematically. In 2012, the company Baltijas pērle was registered which made purchases both in the seaside Salacgrīva district and in Latgale. Melnikov himself continued to buy private properties in Jūrmala. Of more than a dozen properties identified by Ir, most were bought by Melnikov or his company in 2012, followed by a couple of purchases in 2014 and 2015. A total of almost EUR 5 million were invested in property acquisitions, of which four million in Jūrmala. Substantial sums were invested in developing the properties. So far this business has consisted only of investing money – Baltijas pērle has never made a profit and the accumulated losses over six years are close to EUR 800 000.

Shopping in  Latgale

Not far from the town of Dagda, away from inhabited places, the company Baltijas pērle  owns two lots of a total of 43 hectares areas. The Belarusian border is six kilometers away in a straight line. This is the only property in the area which is fenced in. The area is under video surveillance. During my visit, the gate is open and, unhindered, I go looking for the owners. I don’t find them. There is only a man said to be minding the property. He speaks Russian and Latvian, is called Ernests but doesn’t give his last name. Who owns the property? “I don’t know the owner. He has never been here one since time.” He hasn’t seen any Pavel. Have any helicopters flown here?  “I didn’t see, I just recently was asked to watch this place over the winter.”

The property looks cared for. There are several structures and a new building on the shores of the scenic Suhorukova lake. According to information from the land registry the entire lake is part of the property. At the entrance to the property are warnings: no entry, no boating, no fishing and the fine for violation is EUR 1000. There is another fence inside the fenced in property around a small area – it looks like there is some kind of underground structure.

Ernests shows dissatisfaction with my visit and taking photos, therefore I leave. When I am at some distance, Ernests gets into a car and catches up with me, asks for my identification documents and photographs my car. After that, he returns one more time when he notices that I am shooting a video from the road outside the fence.

Two more real properties belong to Baltijas pērle a short distance away, in the Kastuļina pagast in the Aglona district. The Cadastre shows that the company owns the entire Indaņa lake 27 hectares in area, as well as the adjacent lot of 44 hectares. This is a remote area, there are no noticeable neighbors who are permanent residents. The property looks neglected, but, like the other Baltijas pērle properties, there is a fence by the entrance and a warning about video surveillance and the area being a reserve. Further ahead there are fallen trees and no noticeable activity.

The Baltijas pērle  management report for 2015 says that the company is active in tourism. In the next few years, the company had planned extensive construction and improvement work on its properties, as well as to develop cooperation with Finnish tour operators. For later years, management reports are not available.

Investing millions in Jūrmala

Not counting properties registered in the company’s name, Melnikov also owns several private houses in Jūrmala. The largest property is by Puķu and Jēkaba streets – these are several linked lots on the beach and partly in the dunes. Melnikov bought two houses on Puķu Street already in 2011 and expanding the properties at the end of 2014, buying two more lots from the real estate magnate Edgars Šīns, which have not been developed. In fact, the additional plot of land purchased for EUR 1.7 million is an open area in the dunes that can be used as a helicopter landing pad.

This property is also very well guarded. My efforts to count the video surveillance cameras around the buildings failed – there are so many of them. They are of various sizes and formats, at various places on the perimeter of the lot and behind structures. On the sea side, behind the fence, attention is drawn to a large canvas tent that seems out of place in the fancy property. Otherwise everything here looks carefully maintained and maximally secluded. Even most of the house windows have drawn blinds. There are Mercedes and BMW cars in the yard. No one answers the bell.

A similar scene is visible at several other Melnikov properties in Jūrmala – most of them look like new buildings in the same style that are uninhabited.

Yet another property in Jūrmala is owned by Melnikov through the company Jomas 30. It is part of a multi-story office and residential building by the Majori railway station. The company cannot be found here, but the address is the workplace of the notary Santa Terjohina. She has worked on behalf of Baltijas pērle but denies having provided any services to Melnikov. “I personally have had no dealings with him,” Terjohina says when met at her office.

This is contradicted by documents examined by Ir,  which show that Terjohina has worked on behalf of Baltijas pērle. For example, in the minutes of the founders meeting in 2013 it can be read that there was one participant – Melnikov, and the minute are signed by the authorized representative of Baltijas pērle Terjohina. Also, the former owner of the camping site Klintis Uldis Kukurs remembers that the notary Santa helped to arrange the sale of land transaction with Melnikov. Before that Melnikov took Kukurs for a ride in his helicopter – “to Ķurmrags (a landmark on the Gulf of Riga) and back.”

Notary Terjohina cannot explain her signatures on Baltijas pērle documents and doesn’t want to talk about her role in Melnikov’s transactions. The notary also doesn’t want to comment on how her husband,  Sergejs Terjohins became Melnikov’s business partner a few months after the founding of Baltijas pērle, taking a 51% share in the company. “I cannot answer for the actions of other people,” Terjohina says. Later she contacts Ir and announces that she forbids the magazine to publish her earlier comments, referring to the new EU data protection regulation. Ir believes that it is in the interests of society to know what this state official has said.

May a state notary combine the duties of office with serving specific clients in this way – we asked the Latvian Council of Sworn Notaries. After the query from Ir, the council requested an explanation from Terjohina. As of this writing, we have not received an answer from the council.

The apartment in Gardene

Until the beginning of this year, Melnikov continued to lead Baltijas pērle as the only member of the managing board and was its co-owner, but in December last year the company with its many assets was registered in the name of 29-year-old Ronalds Šaltens. He is currently the sole owner of Baltijas pērle and board member. Based on a power-of-attorney, he represents Melnikov in the second company, the aforementioned Jomas 30.

Interesting, that from 2015 Šaltens also owns the company RSPRO. Thus, company differs from the others in that it has no visible valuable assets, but the company attracts attention by its location. It is registered in an apartment in a multi-dwelling building in Gardene – a village built to serve the Soviet army near the town of Dobele, where important Soviet tank base was located.

During my visit no one opened the door, but the neighbors said that an old lady currently lived in the apartment. No one had heard of Šaltens nor his company.

Construction work is listed as the activity of RSPRO, and the accountant Natalija Jegorska answers the listed phone number. “You will not get (Ronald) himself, he is abroad, and I doubt that he can tell you anything,” the accountant says, asking that all questions be directed to her. When I say that I am a journalist, Jegorska categorically refuses to answer any questions. “I know what you are digging for, I know the whole situation, but I am not telling anyone anything, as that is my right!”

The phone number that is given for the company registered in Gardene is the same as for both companies founded by Melnikov – Jomas 30 and Baltijas pērle. The aforementioned accountant Jegorska is currently the owner of the company Baltijas Camping which manages the camping site Klintis. People working there and local residents to whom I spoke are convinced that the owner of the property is and remains Pavel Melnikov and all else is just decoration. Ronalds Šaltens was seen at the camping site a year or two ago, but only as Pavel’s managing director.

“They are all [stated as] owners there. Starting with the accountant, she was also a co-owner,  but not really a co-owner,” says a local resident who knows the situation in the company well. The owner is Pavel, a Russian multimillionaire – however one calls him – but everyone points to Melnikov. An employee’s comment also bears witness that, despite the owner’s wealth, the company pays wages “off the books” in cash envelopes. “They transfer something to one’s bank card, but the rest in an envelope so as not to pay taxes,” he says. During the season, some five or six people are employed in this manner, in the off-season, less. He also reveals ugly details about how things are managed in the nature reserve – in carrying out management’s directives, the environment has been polluted with household waste water and other trash. Respecting the source’s request, Ir will not reveal the identity of this person.

In preparing this story, Ir  several times and by various means tried to contact Melnikov and get his comments on all that is mentioned in the story,  but unsuccessfully.

Kukurs, the man who sold Melnikov the land near Tūja, doesn’t believe that the Russian army was active in Finland under Melnikov’s cover. “That is nonsense!” When both were still communicating, they also talked about Russia. “He said – there is nothing to do there. Until it is a stable country, there is nothing to do there,” Kukurs remembers.

At the camping site Klintis no one has seen anything suspicious that would lead one to think of secret military activities. The neighbors do remember a very big “soldiers’ party” with Latvian soldiers from the military base in Ādaži. The Ministry of Defense confirmed to Ir that there had been “a corporate event not associated with military duties for National Armed Forces soldiers and their families.”

In view of the searches conducted in Finland, Ir asked for comment about Melnikov from the Security Police (SP). Has he attracted the attention of the SP before the events in Finland and currently. The only answer from the SP is confirmation that Melnikov got a residence permit in Latvia in 2011 and that he is being subject to a repeated evaluation, therefore there will not be a more extensive comment.

Minister of The Interior Rihards Kozlovskis told Ir that current everything is being done to determine as quickly as possible whether there is any basis or not for doubts about Melnikov’s activities in Latvia. The Security Police have been in touch with their colleagues in Finland and are still waiting for answers. “Clearly, we must evaluate whether these properties and his activities as a whole do not create some threat to our national security,” the minister said, emphasizing that drawing conclusions would be premature.

Jūrmala

Pavel Melnikov owns several private properties purchased between 2011-2015, spending more than EUR 4 million on their purchase alone.

Salacgrīva district

The company Baltijas pērle founded by Pavel Melnikov since 2012 owns the camping site Klintis located on two lots covering 10.7 hectares. The company works in the tourism industry and was planning cooperation with Finland several years ago.

Latgale

At the end of 2012, Baltijas pērle acquired four properties in Latgale in a quiet remote area close to the Belarussian border. Not far from Dagda, by lake Suhorovka, are two plots of land of together 43 hectares. Nearby in the direction of Aglona in the Kastuļina district, the company owns the Idaņa lake of 27 hectares and adjacent land of 44 hectares.

Pavel Melnikov

The Russian newspaper Novaya Gazeta has determined that Pavel Melnikov is an influential player in the Russian sanitary wares and plumbing market – he owns several well-known brands, including the store chain Vesta Trading. The combined turnover of the companies exceeds 10 billion rubles (around EUR 132 million) last year. He has also patented a water metering unit that is being installed in Russian apartments. At the start of the new millennium, Melnikov’s business partner was Vasily Arzhancev, the former head of the Russian Federation Council chairman’s secretariat. Melnikov has a residence permit in Latvia since 2011 and in 2015 he received a Maltese citizen’s passport.