"In 2005-2007, a number of foreign offshore companies openly touted the results of their mineral prospecting and development work in Russia in the foreign media. Deals with these companies' shares on foreign trading floors have been clinched exclusively against the backdrop of the positive reports from the very companies or from allegedly 'independent' auditors," the ministry quoted Oleg Mitvol, deputy head of the environmental regulator, as saying.
He said most of such companies had sold up to 70% of their shares, whereas the sites they worked on could not boast the reserves they cited in reports.
"The reserves of mineral resources the ventures are licensed to are insufficient or cannot be considered proven reserves. In some cases such companies hold prospecting and not development licenses, which they obtained without having to bid," Mitvol said.
He also said that after reaching a regular licensing agreement and making reports to Western media about it, the companies delayed the start of work and the commissioning of deposits through some bargaining with those in charge.
As an example he gave Britain's Imperial Energy, which is facing a probe over violations in licensing agreements. Mitvol said the amounts the company announced through Western media were ten times as large as the actual reserves developed by its subsidiaries.
He said such companies inflated the data to gain profits on Western bourses without properly investing in the real sector of the economy. "The funds gained from the placement of shares, whose price is based on investors' trust and not on the real production figures, are not invested in the country's economy or prospecting, but are diverted to offshore countries," Mitvol said.
The official proposed to audit jointly with the FSB subsoil users whose reports are considerably overstated in comparison with official data.
