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In the business world, transparency and honesty are the cornerstones of trust. When these principles are compromised, the ripple effects can jeopardize the stability and reputation of an entire company. This article sheds light on disturbing revelations about Maxim's conduct as a director of RE24 ESP, highlighting conflicts of interest, financial mismanagement, and troubling overlaps between Kirsan Security and Maxim Enachi's activities.
Directors' liability
A company director is the company's chief executive representative whose primary duty and legal obligation is to act in the best interests of the company and its shareholders. This includes organizing the company's operations, overseeing financial and general management, representing the company in various capacities, and ensuring that decisions are made in the company's best interests. Directors can make banking transactions from the company's accounts, buy and sell real estate and other company assets, hire and fire employees, etc. RE24 ESP's only shareholder is Reinvest Holding, represented by Natalja S. Thus, Maxim Enachi should have prioritized the interests of RE24 ESP, Reinvest Holding, and the loan provider, Reinvest24 OU, when organizing the operations in RE24 ESP. Selling assets and conducting operations to the detriment of the company is wrongful conduct, especially when such transactions are conducted with a company in which Maxim himself was a shareholder in the past and served as a director for more than six years.
Financial mismanagement and cronyism
During his time running the company, Maxim Enachi employed his wife and the wife of his accomplice, who had no involvement in the running of the company. Other payments for fuel, drinks and even meals were made, traces of which remain on the company's accounting documents, further indicating the misappropriation of company funds and RE24 ESP's “pay it all up front” approach.
Questionable subcontracting practices
Maxim’s choice of Kilusan Building as a subcontractor was justified on the basis of lower prices and equal or better construction quality. That seemed reasonable until the construction budget began to balloon. Maxim Enachi, who also serves as a director of Kilusan Building, the main subcontractor, was transacting from his RE24 ESP account to Kilusan Building’s account. For example, payments for work at Silivella were 20% over budget, yet the project remained incomplete. Similarly, the La Cañada project had been paid a total of over $500,000 by March 2023, despite little progress being made, raising questions about the efficiency and integrity of Maxim’s project management. The budget/offer made by Maxim to Kilusan Building for the construction work was approximately $230,000 per house. In June 2023, Maxim produced a notarized document stating that the La Cañada project required nearly $1 million in additional funding. It's also worth noting that the document makes no mention (yet) of the sale of the San Antonio parcel of land to Kilsan Building.
Unfair mortgages and exaggerated claims
In addition to the financial discrepancies, Maxim Enachi has mortgaged La Cañada for Rs 386,000 for works allegedly performed by Kilusan Building. The total claims for these works amount to more than Rs 900,000, exceeding the total budget for the project, suggesting a gross inflating of the reported costs. The same operation was carried out on a parcel of land in Leliana for a different amount of Rs 783,000. The annual report filed by Maxim states that there are no liabilities before Kilusan Building as of December 31, 2022. This mismanagement indicates either gross incompetence or deliberate fraud.
Greed, conflicts of interest and waste
Maxim Enachi's self-interest is evident in his desire for company shares without delivering results, which highlights his actions as being contrary to the interests of RE24 ESP. His conflict of interest is further exemplified by his inability to properly manage the division of a simple land parcel (the San Antonio parcel was supposed to be divided into five residential parcels), choosing to sell it to Kirsan Building without notifying the sole shareholder and lender. Maxim knew exactly that there were hundreds of private investors funding the San Antonio project, but this was not a fact material enough to not do a “restructure” deal at roughly half the market price. This pattern mirrors the problems seen in Moldova, suggesting a recurring theme of financial irresponsibility and self-interested behavior with the same plan to initiate corporate bankruptcy and take control of mortgaged assets.
Lack of transparency and accountability
During his tenure, Maxime Enachi failed to provide the documents requested by Reinvest24 and its legal representatives, instead demanding that they pay him and his employees what they were owed. This lack of transparency led to his resignation, leaving the company in difficulty with back taxes and unsettled financial obligations.
Shared hosting and warning questions
Of note, Maxim's newly registered website and Kirsan Security's websites (kirsansecurity.com and maximenachi.com) are hosted on the same server, raising major concerns. Why is Maxim using the same account as Kirsan Security, or who is the actual author of the published articles? This overlap suggests a deeper, potentially inappropriate entanglement between Maxim Enachi's personal interests and his (non-)working duties at RE24 ESP.
Legal action against Maxim and Kirsanbil
RE24 ESP filed a lawsuit seeking protective measures against Maxim Enachi and Kirsan Building SL in August last year to address alleged violations and fraudulent activities. This was a necessary step to protect the company's assets and the interests of its investors. After several court hearings, the efforts of the RE24 team led to the first significant settlement.
The court ordered the seizure of Maxim and Kirsan Buildings' properties in Spain, marking a pivotal moment in the pursuit of accountability and justice.
“While the number and value of these properties are not large, they are an important step toward achieving justice. Unfortunately, Kilsan Building was able to sell the San Antonio property in September 2023, but this court decision does not include that. This legal action underscores the seriousness of the allegations and the company's commitment to redress the injustice caused by Maxim's actions.”
Conclusion
“The revelations about Maxim's conduct at the RE24 ESP are a stark reminder of the importance of accountability and transparency in corporate governance. His conduct, characterized by poor financial management, conflicts of interest and a blatant disregard for the interests of the company and its investors, has caused significant damage. Our main priority is to resolve the issues in the Spanish SPV, prosecute those responsible for the damages through the Spanish courts and recover investors' funds.
P.S.
Maxim can shed light on the questions that we have in our minds that we simply don’t have answers for.
How were you planning to return funds to investors in the San Antonio project after transferring ownership of the land to Kilusan Building as a “debt restructuring”? From other projects? Or was bankruptcy the only option? Reinvest24 assumes no liability for any errors or omissions in the content of this article. The information contained in this article is provided “as is” with no guarantee of completeness, accuracy, usefulness or timeliness.
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