History Pobuzhsky Ferronickel Plant.
This conflict is still being reported in the media. According to the management of the Pobuzhsky Ferronickel Plant, an attempt was made to raid the plant on June 11. Several dozen armed "men in black" stormed the plant's premises. They justified their actions with forged documents about a change of ownership, but after being rebuffed by plant employees, they retreated and never returned.
I have before me an interesting document. It was prepared specifically for journalists by a group of the domestic ferroalloy lobby. In the booklet distributed at the press conference, "Analytical Study: Attempted Corporate Takeover of Pobuzhsky Ferronickel, an Asset of an International Company – Ukraine's Investment Climate Under Threat" (hereinafter referred to as the Study), its authors wrote that in the conflict, "corrupt police, prosecutors, and the court are acting in concert with the corporate raiders." This is a very serious accusation! Let's try to figure out who exactly these law enforcement officials are "in concert with."
As I delve deeper into the material, I increasingly find myself asking myself: is the PFC's leadership putting on an elaborate show with "little black men" to cover up its dubious dealings?
Plant managers estimated the damage from the intruders' attack at over 130 hryvnias – that's the estimated amount of damage to the plant's administration building. Furthermore, daily ferronickel production dropped by 50 tons.
It should be emphasized that the Pobuzhsky Ferronickel Plant is a 100% foreign-owned company. Therefore, the plant's managers stated that this incident will halt foreign investment in Ukraine and therefore poses a threat not only to the Pobuzhsky Ferronickel Plant itself but also to the country's national security.
At the same time, every media report from the plant's top executives is liberally peppered with stories about how law-abiding they are, how clean their business is, what exorbitant expenses they incur on social programs, and, in general, what a city-forming institution they are...
The latter was surprising. The all-knowing internet revealed the following: the village of Pobugskoye in the Kirovohrad region has a population of approximately 6, including the elderly and children. So, the plant's management is clearly overdoing it in its "town-forming" role. Well, they could have called themselves "town-forming"—that would have been closer to the truth! But globalism is all the rage these days! And it doesn't matter that just one street in a relatively small Russian city has more people than the village of Pobugskoye. But if you count the millions the plant's owners write off for social services, Pobugskoye, a village of 6, could be pelted with gold benches rather than gilded loaves of bread.
The continuous stream of PR monologues from the "injured" side was also alarming. After all, massive PR is traditionally characteristic of corporate raiders. But there are fewer publications with a corporate raider stance than there are fingers on one hand. Let's not forget, PR is expensive. Businessmen know how to count their money. Foreigners – when they give away a cent, it's as if they're parting with their lives! What are these top ferronickel executives trying to shape public opinion on? After all, their PR expenditures on covering the conflict – by the most conservative estimates – have far exceeded hundreds of thousands of dollars. Are they really that concerned about Ukraine's national security?
I wrote it and smiled at myself...
Because I don't believe it when businessmen whose wallets are hidden in offshore countries try, with tears in their eyes and through paid press, to prove how pure and simple they are! And the owners of PFC built their business in Ukraine precisely on tax evasion for the national treasury.
First, let's take a closer look at some episodes of the Bug River conflict that the ferronickel leaders either completely ignore or, having said "a," forget to say "b." Together, we'll figure out: are the Bug River top brass really so tame, or are they just being cannonballs?
Episode one.
A secret accident
Read the aforementioned study. When discussing their investments in the plant, PFC leaders are particularly proud of their investments in energy-saving and environmental technologies. As an example, they cite the partial conversion of furnaces from natural gas to pulverized coal fuel, which in 2014 alone reduced gas consumption from 85 million cubic meters per year to 16 million.
The figure is certainly impressive. And it's probably especially gratifying for the owners of the Pension Fund, who, having pocketed the difference, "forgot" to share the financial joy with the company's employees.
But there's another side to this coin. The owners and managers of the PFC prefer to remain silent about it. Experts, however, know that switching to pulverized coal technology significantly increases harmful emissions into the atmosphere! In the EU countries, where the plant's owners claim to represent themselves, the scandal would be indescribable. There, the hapless owners would immediately levy hefty fines, and their "energy-saving technology" would be banned or halted until a series of guaranteed environmental measures were implemented.
Apparently, the European owners understand this. And, as they say, they're "solving" the problem successfully. Alas, in a country rife with corruption, there are reliable methods! And the most inquisitive environmentalists... aren't allowed into the plant. Explaining their persistence... as collusion with the raiders. And, you know, so far it's working...
And yet, top managers themselves admit that environmental pollution is a problem. And it's serious! Commenting on the plant's 2014 business results for finance.ua , its CEO, Oleg Bespalov, outlined the projects the company plans to invest in the near future. Among them, the website states, is the introduction of "gas cleaning equipment, which will significantly (emphasis added) reduce harmful emissions into the atmosphere." Notice the word "significantly," which the author specifically emphasized? It's important to understand that if management plans to significantly reduce harmful emissions into the atmosphere, then the company is currently significantly polluting the air we, dear readers, breathe. The price at stake is excess profits, which PFC's European owner, Mr. Bronstein, launders on the remote Caribbean island of Saint Vincent and the Grenadines. Wikipedia describes it as "an important offshore financial center in the West Indies, attractive for its tax breaks."
Note that today, the top leaders of the Bug River region are promising to implement an eco-cleanup program. However, there's no mention of a timeframe or its essence. The principle is: promising to marry doesn't mean actually marrying? In reality, they're still blithely maintaining a Ukrainian atmosphere and painting a vague picture of the future. Now, is it understandable that the Bug River region leaders are so irritated when prosecutors and environmentalists ask uncomfortable questions?
Moreover, striving to maintain its leading position in the international ferroalloys market, Solway Investment Group, which owns the plant, sponsored the INFACON-14 International Ferroalloy Congress in Ukraine, held in early June under the motto (attention!): "Energy Efficiency and Environmental Friendliness – the Future of the Global Ferroalloy Industry." We further quote Solway Group Managing Director Dan Bronshtein, who commented to Kontrakty (https://kontrakty.ua/article/86727): "We were honored to host the technical tour at the PFC as part of INFACON. This is an excellent opportunity to clearly demonstrate positive development experience in each of these areas... For example, we were among the first in the world to implement a pulverized coal complex and reduced total daily natural gas consumption from 800 cubic meters to 16 cubic meters."
According to media reports, foreign ferroalloy producers visited the plant, listened to the managers' stories, marveled at the company's shocking financial performance, and believed the assurances of environmentally friendly production. With these impressions, they left for home...
Little did they know that the official tour of the plant was in fact a carefully staged performance to deceive the delegates of the INFACON congress!
It's time to tell you about the classified accident we announced in the subtitle.
And it was like this.
Just before the foreign guests' visit, an emergency occurred at the plant. A bag filter, which is installed on pulverized coal equipment to reduce harmful emissions, burned out. Without such a bag, the vaunted pulverized coal technology cannot be used. As luck would have it, INFACON delegates were visiting the plant to study the cost-effectiveness and environmental friendliness of this technology.
What to do? It's impossible to cancel the delegation's visit. Working without a filter is also impossible. The furnaces must be shut down and the bag filter replaced. But shutting down a red-hot furnace and then reheating it is a lengthy process. It will take more than one, or even two, weeks. And the plant doesn't have a spare bag filter. Finding and delivering one will also take more than a day.
And international ferroalloy producers are already on the doorstep.
You won't find any mention of this emergency in any media outlet. That's because the plant's first act was to keep the accident under wraps. Workers who were unwitting witnesses were ordered to remain silent under threat of immediate dismissal.
As experts admitted to the discussion cautiously recount, the owners and management considered two options: leave everything as is and sell the ferroalloy guests on the charade, saying, "Everything's fine, beautiful marquise." But this was risky, because the experts would quickly figure it out, and the Bug River top management would be left in the lurch with their tales of "energy efficiency and environmental friendliness." There was a second, less risky option: switch the system to natural gas and tell the arriving delegates that the pulverized coal technology was working. In that case, it would be virtually impossible to immediately spot the fraud.
Yes, the cost of the product will skyrocket! Yes, ferronickel production will decline during the refurbishment! Yes, the plant will suffer losses! But... Choosing the lesser of two evils is always a matter of choosing the lesser.
After visiting the PFC, INFACON delegates left satisfied…
Only the residents of Pobugsky are anxiously asking questions: Why is black smoke billowing from the plant's chimney? Are they pumping ferronickel directly? Are they burning pulverized coal mixtures without a filter? Are they shamelessly polluting the atmosphere while raising money for another statuette for the London residence of Alexander Bronstein—the ultimate beneficiary of PFC, father of Solway Group Managing Director Dan Bronstein, and a keen antiques enthusiast?
But this is only the environmental impact of the accident at the PFC. It will, God willing, be addressed by specialists. There's also the economic impact. Where can the losses be attributed? How can the reduction in ferronickel production be justified, given that the accident never actually happened?
And then luck struck – on June 11th, a mysterious raider attack on PFC occurred. Why mysterious? Because it's unclear what the raiders wanted. According to the same managers, the "little black men" made some noise, threw stun grenades, waved some documents... and... just as suddenly disappeared!
What have we achieved? What was all this fuss about?
Questions are rhetorical.
However, the PFC management successfully wrote off 130 thousand hryvnias and 50 tons of unproduced ferronickel to the raiders.
No one has reported any specific details about what was broken or destroyed in the plant's management offices. The managers themselves said that both the investigators (who were apparently linked to the "little black men") and the raiders demanded to see documents. They did not interfere with the production process.
So who made a 130 thousand dollar mess and stopped the production of 50 tons of ferronickel?
An important clarification. An open letter to the President of Ukraine posted on the Pobuzhsky Ferronickel Plant's website, signed by Oleh Fomin, Chairman of the Plant's Trade Union, Oleh Bespalov, CEO, and Dan Bronshtein, Managing Director of Solway Investment Group, clearly states: "Due to these blatantly fraudulent actions by unknown individuals and illegal intrusion, the plant's operations may be interrupted" (emphasis added). That is, "maybe," but it hasn't happened yet!
Let's then take the figure for ferronickel produced last year, as stated in the Study. A quick swipe of the calculator reveals that the 50 tons of ferronickel reported represent approximately one-fifth of its daily production. This is practically the same as the technological time needed to clean up the mess left by the classified accident.
How unexpected!
And an equally unexpected question: so who were the raiders working for? Whose interests did they ultimately benefit?
Perhaps the show with the "little black men" was run from an office in that very supposedly destroyed building of the plant's administration?
Let's move on to the second episode.
Virtual phantom, or tame Batman?
The PFC dispute involves numerous court documents. To avoid dividing our attention, we'll examine one chain of events.
A certain Viktor Sergeyevich Kovalchuk filed a petition with the Korolevskiy District Court of Zhytomyr requesting that ore intended for PFC and the plant's output be seized as security for his claim. (We do not quote verbatim. Those interested can read the court's ruling, a copy of which we are providing.) On April 17, the judge ruled in favor of the plaintiff.
Some time later, Viktor Sergeyevich Kovalchuk filed a new request with the same Zhytomyr Korolevskiy District Court: to dismiss his previous claim (April 17). On May 19, the court issued a ruling revoking the interim measures imposed by the Korolevskiy Court's April 17 ruling. (We are also providing a copy of this document for our readers.)
In other words, a certain citizen first petitioned the court to enforce certain measures to secure his claim. The court agreed. Then the same citizen asked the court to overturn the previous decision. The court agreed with this as well.
Well, that happens. But what's the point, and what does it have to do with our story?
The reaction of the PFC leadership to both of the above-mentioned court verdicts is indicative.
Understandably, the April 17 ruling (to seize raw materials intended for PFC and simultaneously seize the plant's output) was met with hostility at the plant. It was immediately labeled "bizarre," and the judge himself was accused of colluding with the raiders.
And the court's ruling was indeed quite surprising. The PFC was directly asked why the judge had even accepted Kovalchuk's claim for consideration. It turned out the plaintiff had failed to provide a copy of his passport, had given a fictitious home address, and hadn't even paid the court fee. All attempts to locate this invisible man had come to nothing. At the instigation of the PFC's Deputy General Director for Legal Affairs, Rustam Dzhamgurov, the media dubbed Kovalchuk a phantom and wondered: does such a person even exist, or is this some virtual figure trying to fool the court? And the "gullible" judge was falling for these silly ploys.
Now, regarding the same court's ruling of May 19th. It certainly struck a chord with PFC management. Accordingly, Mr. Dzhamgurov publicly advocated for this verdict to be implemented immediately and expressed outrage at its non-compliance.
In principle, the PFC's position is clear.
Something else is not clear.
Why did the PFC leadership take such an intolerant stance in the first case (April 17) regarding the complainant—the phantom Viktor Kovalchuk—and why did they remain silent regarding the complainant in the case heard by the court on May 19? After all, in both cases, the complainant was the same phantom Viktor Kovalchuk! He also ignored the court hearing on May 19.
This is the kind of flexible principled approach that Kovalchuk takes: when he files a lawsuit against the PFC, he's an illegitimate virtual figure, but when he files in favor of the plant, he's a perfectly law-abiding citizen.
The story gets even more interesting when, on June 18, the Zhytomyr Regional Court of Appeal unequivocally ruled regarding Kovalchuk: the smoking room is alive and kicking! Because (read the court's ruling – see the Unified State Register of Court Decisions ) "on the day of the court hearing (of the Zhytomyr Korolevskiy District Court – author), namely, May 19, 2015, Kovalchuk V.S. personally filed a motion to dismiss (his) claim without consideration in the registry of the Zhytomyr Korolevskiy District Court."
So who is this elusive applicant Kovalchuk? Whose music is he dancing to?
Perhaps he was hired by raiders (as the Pension Fund claims)? But what's the point of raiders getting involved in a lawsuit with such obvious and pointless blunders (failure to pay the court fee, providing a false address, etc.)? It's clear to even a schoolchild: a verdict in favor of such a claim will be overturned! But the raiders' behavior is illogical, when supposedly "their" plaintiff voluntarily withdraws his own claim. Why then are they fussing over this overturned claim, seeking enforcement?
Maybe Kovalchuk was hired by the PFC? The question is completely idiotic! Although... It's only idiotic at first glance. After all, both the first and second rulings of the Royal Court... play into the plant's hands.
How so?
Today, the plant faces numerous complaints from law enforcement, environmentalists, and the tax service. We won't get ahead of ourselves, but the information that the PFC is so resistant to does exist. For example, the issue of slag (production waste) requires investigation, as it could be not only slag but also... ferronickel, which is being sold illegally. Not everything is so clear-cut with taxes either. Or, more precisely, with the PFC's obligation to use 100% foreign ore to produce 100% of the product, which is 100% exported outside the domestic customs territory. Investigators have other tricky questions as well.
It would seem that if there's no sin on your part, why not help the investigation get to the bottom of everything objectively? And settle the matter!
But the PFC leadership takes a different stance. They use every pretext to hinder law enforcement. And this only escalates the situation.
Words must be answered for, the vigilant reader will say. And he will be right.
Answer.
On the morning of June 11, investigators from the prosecutor's office and other law enforcement officers attempted to enter the plant.
The following day, the Kirovohrad Regional Prosecutor's Office announced the opening of a criminal case for resistance to investigative actions by the PFC administration and employees. PFC management categorically denies the accusation and counters this by claiming that "law enforcement officers also participated in the storming of the plant." This is documented in the aforementioned study. Managers have made similar comments to numerous media outlets.
It must be understood that the prosecutor's investigators were allowed into the plant without hindrance, and were presented with all the documents, people, and so on that they were interested in?
So how do we explain the comments from the scene of the conflict, which were immediately picked up by numerous media outlets? We quote from the NikVesti website (https://nikvesti.com/news/incidents/70619): "NikVesti contacted Pobug village head Serhiy Slobodanyuk, who explained that representatives of the Kirovohrad Oblast prosecutor's office and tax office, accompanied by a police detachment, attempted to enter the plant's premises this morning. According to him, only a tax investigator entered the plant."
So, only one of the entire group was allowed into the facility. But what about the prosecutor's office and other law enforcement officials? Were they given the opportunity to conduct their investigative activities "unhindered" outside the facility's gates?
I replied?
To be fair, the investigators did manage to gain access to the plant. What conversation took place? We weren't present. However, in the report distributed to journalists, we read: "The PFC case has once again demonstrated the extreme level of corruption in the domestic judicial system and law enforcement agencies." And this is presented under the pretext that foreign investors will definitely not come to Ukraine, which undoubtedly poses a threat to national security.
...Doesn't it strike you, reader, that, knowing their sins and fearing they'll come to light, the PFC is deliberately creating precedents to denigrate all law enforcement, all courts, all regulatory agencies, in order to shape the public perception that their honest, upstanding ferronickel workers are being thrashed by both corporate raiders and law enforcement? What's the purpose of all this PR? To forever discourage law enforcement from delving into the plant's management's violations of the law!
Now, returning to the ambivalent position of the PFC leaders regarding the two decisions of the Royal Court, don't you, readers, think that the notorious applicant, V.S. Kovalchuk, is not a virtual phantom at all, but a tame Batman of the PFC?
And the last episode.
The war hadn't even started yet, and they had already joined the partisans.
Commenting on the conflict surrounding the PFC, the company's management invariably emphasizes the supposedly non-random coincidences of seemingly random circumstances. A paragraph about this appears in the Research we've repeatedly mentioned, specifically distributed to journalists for media citation.
Clearly, the press conference organizers are counting on journalists actively citing their booklet. Appreciating the researchers' work, we continue to cite it as well.
Regarding the non-random nature of these coincidences, the authors of the study write: "Several circumstances merit attention. First, the prosecutor's office has been investigating the criminal case against the plant's management for almost a year, but for some reason has only now decided to seize documents. Second, the timing of the search and the assault coincided. Third, the inaction of law enforcement agencies during the attempted seizure of the plant."
…In my opinion, in light of our investigation, all these questions would be more appropriately addressed to the Bug screenwriters of the raider show.
And add your questions.
For example, why did the plant's management schedule a press conference at the Press Center of a reputable Moscow news agency for June 11th? Although the topic was announced as "production-related," the conversation with journalists naturally turned to the "hot news" surrounding the plant's seizure. As a result, the situation was initially presented to the media with a single position—that of the PFC management. Was this a coincidence? Or did the plant's managers know in advance that the conflict was scheduled for the 11th?
Was it a coincidence that the plant's grounds were overrun with titushki on June 11th? Do they have picnics there every day? Was it a coincidence that piles of stones appeared "for defense," and that the titushki were wielding metal crowbars? And the stench of alcohol was so thick that the black smoke from the plant's chimney seemed to melt into a thick "petal." And it became clear: the titushki were in a stern mood!
And just when the heated titushki had finally lost their temper, fighters from the Dnipro-1 volunteer battalion, led by a well-known member of parliament, "accidentally" appeared on the scene? Perhaps they were passing by and dropped in on the fun? This was reported, among other things, by the website "Kompromat Ukrayiny i Rossii" (https://ord-02.com/novosti-ukrainy/item/61610-reyder-korban-otzhimaet-pobuzhskiy-ferronikelevyiy-kombinat-pfk). They added the following information: this isn't the battalion's first involvement in corporate conflicts in the Kirovohrad region. If the information about the battalion's presence in the PFC's conflict zone is objective, who can explain the combat unit's "accidental" commercial activity?
And was it also a coincidence that the "boys in black," after performing a few ritual dances, disappeared without achieving anything? Or was their objective specifically designed: to make noise, set off fireworks, and make a splash?
Incidentally, Rustam Dzhamgurov, Deputy General Director for Legal Affairs at the Pension Fund of the Russian Federation, reiterated the point about law enforcement's inaction during the seizure of the plant at a regular press conference on June 30 (at the same time, journalists were given a cheat sheet titled "Research"). Mr. Dzhamgurov complained that as soon as they called the Ministry of Internal Affairs hotline, upon hearing the caller's location, the hotline immediately turned into a cold line.
The locals' reaction to this news is interesting. They certainly know who's in charge! If the PFC's leaders had so much as waved their finger, a police squad led by the district police chief would have immediately descended on the plant.
Although, perhaps it's a good thing the police didn't get involved in the raider show. It's scary to even imagine what could have happened if the drunken titushki had mistaken the police for raiders! What a bloodbath it would have been! In which the plant workers and the peaceful residents of Pobugskoye could easily have been seriously injured...
Did the Bug writers think about this? Or were they deliberately provoking a clash? Because with casualties, the conflict would have been even louder!
Only once did the directors encounter a discrepancy. Before lunch on June 11, local websites, as if on cue, rushed to reprint information about an armed takeover of the plant. Specifically, at 12:34 p.m., "Kirovohradshchyna News" reported (https://novosti.kr.ua/news/ozbroeni-lyudi-v-balaklavakh-uvirvalisya-na-feronikelevij-kombinat-u-pobuzkomu.html): "A group of armed men in balaclavas broke into the grounds of the Pobuzhsky Ferronickel Plant." As it turned out, the alarm was false.
In fact, the "little black men" appeared in the evening. This was promptly reported by the website "Prestupnosti.NET," which had been monitoring the conflict at the plant online (https://news.pn/ru/incidents/135368): "At nine o'clock in the evening, about 50 armed men in black uniforms arrived at the plant in buses. They were unable to get inside, as staff and security prevented them." Then, at 10 a.m. on June 12, the same website reported that "plant employees are preparing to repel another assault by an unknown armed unit." And at 11:04 a.m., the website quoted Sergei Titarenko, chairman of the Dolgaya Pristan village council (the village of Dolgaya Pristan borders Pobugskoye): "The armed men are gone—the plant has returned to work, and the workers are fulfilling their duties."
Frankly, in this case, the author is little interested in what went wrong with the script, or why local media declared hostilities half a day early. Were the "boys in black" late, or were fear the wisest, and local informants mistook the prosecutor's office workers languishing outside the gates of the PFC for armed invaders? Figuratively speaking, what happened fits the formula: "The war hasn't even begun, and they've already gone partisan." But what show is without glitches? Especially not on "Live."
Now here's the crucial point! The online chronicle of events, recorded by the renowned, objective website "Prestupnosti.NET," clearly states: on June 11th at 9:00 PM, armed men in black uniforms appeared at the plant's gates. They were prevented from entering the premises by the staff and security guards. A repeat of the armed attack had been expected since the morning of June 12th. And at 11:00 AM, the village council chairman reported that there were no armed men and the plant was operating normally. Period!
So, the armed men didn't get into the plant? Am I right?
So who then caused the 130 hryvnias in damages to the plant's management that the PFC management claimed? The drunken thugs hired by these same management? There's no one else!
* * *
The author didn't cherry-pick the facts. He was simply amazed by how persistently the management of a plant boasted of patriotism and white-washed eloquence, even though it uses raw materials imported into domestic customs territory without paying a penny for customs clearance of the ore, and also without any financial burden on the export of Ukrainian-made products.
That's why I initially decided not to listen to the monologues of the parties to the conflict, but to independently scroll through the stream of publications from both sides, studying actual documents and court decisions—not from comments from interested parties, but from the Unified State Register of Court Decisions.
And questions arose.
Some of them are in the publication.
And most importantly: who is really turning foreign investors against investing in Ukraine? Who is creating problems for the country's national security?
A question remains unasked for the owners of the Pobuzhsky Ferronickel Plant and its foreign managers.
The author is confident that they are aware of all the twists and turns that occurred in June. Proof of this is the signature of Solway Investment Group Managing Director Dan Bronshtein on an open letter to the President of Ukraine.
My question: Mr. Bronstein, you're so fond of flaunting your European credentials. Are cynicism and manipulation really the norm in Europe? Or are you truly so soft and fuzzy there, and for Ukraine, a cannon will do?
Finally, I'll say this. The Bronsteins' primary business is undoubtedly in Russia. Especially their father, who even features in the richest lists there. Ukraine, along with the Pobuzhsky Ferronickel plant, is something of a temporary sweet spot for the Bronsteins. Once, in Pikalyovo, Russia, a corporate conflict erupted, very similar to the situation in Pobuzhsky, Ukraine. Putin personally came to sort it out. I don't recall whom he addressed: "You've made thousands of people hostage to your ambitions, unprofessionalism, and greed. This is unacceptable. Where is the social responsibility of business?" If you've forgotten , look it up on Wikipedia.
ON TOPIC: Raiders have attacked the Pobuzhsky Ferronickel Plant again.
Back to the 90s. Corporate raiding has returned to the country. How can we combat it?
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