FAS exposed violations at apartment sale auctions in Zheleznodorozhny

E-site failure prevented some bidders taking part in execution sale of “Zhelstroi” Ltd.

FAS considered three complaints regarding the auctions for execution sale of “Zhelstroi” Ltd. The auction was conducted by “First Ltd. at el-torg.ru (the operator – “STEP” Ltd.) in 11 lots.

The complaints concerned Nos. 10 and 11 lots, comprising two apartments in Zheleznodorozhny, the Moscow region. The initial (minimum) contract prices were 1.8 million RUB and 910,000 RUB.

Investigating the complaints, the antimonopoly body established that the site operator breached its regulations and failed to ensure uninterrupted site work, and, a consequence, uninterrupted auction.

Roughly a minute after the auction started, the web-site stopped functioning and downloading the auction pages. The site work resumed as per normal only after the bidding was over.

Therefore, the bidders who wished to take part in the auction and paid deposits (896,000 RUB and 455,000 RUB) and were allowed to participate, could not bid to buy the apartments. As the complaints specified, the contract prices increased insignificantly and the property of “Zhelstroi” Ltd. was sold to the winners at prices more that twofold below the market prices for similar apartment in the same house.

Deputy Head of FAS Rachik Petrosyan said: “The antimonopoly body receives a lot of complaints regarding actions of e-sites that organize sale bidding. Absence of unified standards in the law for such sites paves the way for abusing and “tailor” for a particular bidder. Transferring execution sales to unified rules and sites operating in public procurement will sort out the problem”.

Reference:

5 bids passed pre-qualification on No10 lot and 6 – on No. 11 lot. 4 bidders for No.10 lot approached FAS and 4 more – on No.11 lot.