UFA, the abbreviation for Unitesfront Financial Aid is a Russian government agency that provides financial assistance to its citizens. Founded in 1998, the first UFA project was implemented in the remote mining town of Sberbank. This was done in an effort to assist the miners who suffered greatly because of the closure of the enormous Sberbank copper mine in a region where most of the population lives.
The financial results of ufa, the local currency support and sound money position led the financial analysts to change their views, the agency indicated. The region’s main capital, the region’s part of the Volga River area of Bashkortostan, is around 1200 miles from Moscow. The third largest city in the country, St. Petersburg is also located in this region. With the help of ufa, the miners were able to continue working and provided monetary support.
In early 2020, ufa supported projects in the regions of Irkutsk, Taldyund, Vorkuta and Khitai. After the implementation of these projects, miners did not receive the payment promised by the company. The managers of ufa and the board of directors of the regional directors of metals decided to review the entire contract. When this review was made public, several businessmen started complaining, claiming that ufa was arbitrarily increasing the monthly cap hit. This caused several businessmen to request for a cap freeze.
At first, ufa maintained that it would not increase the monthly cap hit on miners. However, following the announcement, several businessmen called the regional directors of Kharkov, demanding that the company provide them with the promised funding. Because of the increase in calls, the authorities decided to close all operations. They signed a one-year contract with ufa instead. As a result, the miners had to receive a large sum of money without any written guarantee from ufa.
According to the contract, ufa will give a certain sum of money to the mining firm for three years. However, the amount varies according to the success rate of the firm. As a result, some mining projects were closed in order to receive the full amount specified in the contract.
According to the investigators, ufa should have offered a large amount to cover the costs for the projects. However, the company failed to do so, causing massive financial losses. The amount lost was almost double – the company should have paid approximately one million rubles for two years to cover the entire expenses.
Following the news about the scam, several people asked if ufa actually received an extension. Experts suggest that no company or entity has ever received such a huge amount from anyone. In order to receive an extension, a company needs to sign a long-term contract and prove that it is solvent. The extended period in question was signed one year before the UFA contract was due to end.
The head of ufa is Rogozin, who is responsible for the scandal. He explained that he had signed a one year deal. “The main intention was not to extend the contract, but to improve our efficiency and productivity.” In order to receive the full amount, the mining firm had to increase productivity. According to Rogozin, he hopes that all companies will now understand how important it is to monitor their relationships with their workers.
The head of the mining firm says that he plans to review all contracts that have been signed. The head of ufa believes that there is no way that anyone can convince him to extend the contract. However, the head of the mining firm says that the main obstacle to investing in UFA is its high level of commissions. In order to reduce this commission, the head of ufa has talked with the director of the mining company. Since the head of ufa believes that reducing these commissions is necessary in order to increase profitability, the company is planning to launch a television advertisement with the message ” miners get UFA…worked for the money”.
After the scandal broke, no one was surprised when companies started calling ufa to ask whether they would be getting a one million dollar contract. There were even some officials who accused ufa of running a Ponzi scheme. However, everyone soon forgot that Rogozin is just one person. Therefore, it is important to know what other people believe in order to know whether or not ufa was trying to scam anyone. Two years ago, I wrote an article saying that the decision to grant a one million dollar contract to ufa was based purely on economics, and that no one had been duped because Rogozin was the only one who was in charge.
Even if someone else had been tricked into signing this contract, ufa still would have gotten his original fee. Even though Rogozin was fired from ufa, he still receives his thirty-year probationary sentence and is required to pay a fine of twenty-five thousand dollars. The fine will be suspended while he serves the sentence. Although there are many theories as to what went wrong between ufa and the company, the bottom line is that Rogozin is in serious trouble now. Hopefully, he will spend the remaining time in prison wisely.