Russian court confiscates $3 billion from company of Daghestani railway executive

(Updated: about 5 hours ago)• 3 min read

Rely on OC Media? We rely on you too.

Amidst the current global turmoil, small news outlets like ours could be the first to close. Help us get off grants and become the first reader-funded news site in the Caucasus, and keep telling the stories that matter.

Become a member

A Russian court has ordered the confiscation of over ₽242 billion ($3 billion) in assets belonging a railway company owned by Daghestani native Salman Babaev, who was also ordered to pay an additional ₽30.1 billion ($360 million) in a large-scale corruption case.

The ruling to confiscate Vector Rail’s assets was made by Yekaterinburg’s Oktyabrsky District Court on 23 April.

Vector Rail is co-owned by Babaev and Aleksei Taicher.

Born in Makhachkala and raised in the village of Ashaga-Stal-Kazmalyar in the Suleiman-Stalsky District, Babaev was among Russia’s top railway executives, having served as the vice president of the Russian Railways (RZD).

He stepped down from his position at RZD in 2017, having officially retired. However, a few years later, anti-corruption investigations were launched against him and his associates, culminating in the asset seizure and the formal corruption case.

According to court documents, Babaev’s sons — Ruslan and Timur — were also involved in the scheme, along with Taicher. The Prosecutor’s Office stated that Taicher exploited his role at RZD to orchestrate a series of deals unfavourable to the state but financially beneficial to himself and his associates.

The court found that through companies linked to Vector Rail, registered under Babaev’s sons, and with Taicher’s participation, at least ₽30.1 billion ($360 million) was siphoned from the RZD system. The funds were used to acquire high-value assets, later registered under relatives and affiliated individuals.

Twelve companies within the Vector Rail group were also ordered to be transferred into state ownership. Of these, five were freight operators, another five specialised in leasing rolling stock, and two served as asset management firms. Their combined market value exceeded ₽242 billion ($3 billion).

The group’s assets included over 44,000 railcars and more than 200 real estate properties. The companies held a dominant position in the market for the transport of liquefied gas.

One key episode cited in the case involved leasing manipulations between the Federal Freight Company (FGK) and the publicly owned Transfin-M. Prosecutors claim Taicher, acting without board approval, increased lease charges, causing FGK a loss of ₽1.1 billion ($13 million). The funds were partly transferred abroad via contracts with a Taicher-owned company, RailStream, which subsequently declared bankruptcy. Taicher was arrested in 2024 in connection with this and other cases.

Just one year before the court’s ruling — on 23 April 2024 — Russian President Vladimir Putin awarded Salman Babaev the Order of Alexander Nevsky. Photographs from a Kremlin meeting on the same day show Babaev seated alongside President Putin and Azerbaijani President Ilham Aliyev.

Although Babaev built his career outside his home region, he maintained close ties with Daghestan. In 2019, he invested in the construction of a modern school in his home village. The project, reportedly worth around ₽400 million ($4.8 million), was completed in 2023 as part of a state rural development programme, with the involvement of local deputy Imam Yaraliev, a friend and business partner of Babaev.

Previously, in 2020, Babaev and Yaraliev jointly paid off debts of a local utility company, amounting to ₽6 million ($66,000), and expressed willingness to participate in environmental infrastructure projects, including the construction of waste management facilities.

Meanwhile, the Prosecutor General’s Office continues to pursue full recovery of damages. The agency asserts that the deals arranged by Babaev and Taicher not only harmed the national budget but also disrupted the integrity of the state freight system. Authorities are still seeking the return of an additional ₽30.1 billion ($330 million) and are continuing their investigation, the Russian media outlet Kommersant reported.

Elizaveta Chukharova •

158 articles•0 Followers

Liza was born and raised in Vladikavkaz and now lives in Prague. She has previously worked for RFE/RL, ASTRA, Belsat, and others. She is currently completing her Master's degree in Russian Studies at Charles University in Prague, specialising in the study of military and inter-ethnic conflicts in the North Caucasus. In her free time, Liza shoots feature films, writes about cinema, and travels — she has visited exactly 50 countries and is not going to stop there.