Arsen Avakov
According to the Avakov family's declaration, their net worth last year was approximately 40 million hryvnias. The minister included 26,5 million hryvnias in proceeds from the sale of assets in Italy, nearly 10 million hryvnias in shares in authorized capital of companies, and over one million hryvnias in securities.
But this is just the tip of the iceberg. In 2011, Focus magazine estimated Arsen Avakov's fortune at $283 million, a year earlier at $58 million (Read more about it: Arsen Avakov: The criminal past of the Minister of Internal Affairs). Even if this is an exaggeration, the attempt to present his family's current net worth as $1,5 million appears highly unconvincing. Even official data in open sources points to this.
It is known that one of the family's key companies is PJSC Investor. According to the SMIDA information disclosure system, 42% of this company's shares are owned by the minister's wife, Iryna Avakova. The state register of legal entities, meanwhile, reveals that Investor contributed 75,7 million hryvnias to the authorized capital of another company, Investor-Fund. This means Avakova's stake in this company exceeds 30 million hryvnias.
These figures did not find a place in the declaration of the Minister of Internal Affairs.
And probably not only them.
Avakov was once one of the most influential businessmen in the Kharkiv region. His companies developed several gas fields, and he operated in the energy and banking sectors. After Viktor Yanukovych's team came to power, his appearance on millionaires' lists became a distant memory for the Kharkiv resident. Since 2010, persecution has been underway against the businessman and his partners, with Avakov blaming former governor Mykhailo Dobkin and Kharkiv mayor Gennady Kernes for the persecution. While the fugitive hid in Italy, little remained of his empire in Ukraine. The family lost control of key assets, including gas projects and Basis Bank, and lost their retail network and several plots of land.
True, during Avakov's year and a half as minister, his inner circle managed to restore the status quo, returning almost everything that had been lost.
Open source data indicates that the assets in question are worth billions of hryvnias.
"Basic" assets
One of the first "reanimated" assets was Basis Bank. According to SMIDA, its owners were the minister's relatives, PJSC Investor and Investor-Fund. Three years ago, while Avakov was living abroad, the authorities appointed a temporary administration to the bank, and later the NBU revoked its license altogether. By that time, Basis's regulatory capital, with the help of local authorities, had been completely lost, falling to a negative value of almost a third of a billion hryvnias. The Kharkiv Heating Networks utility company owed the bank over half a billion hryvnias.
In July of this year, the bank's shareholders, after going through the entire judicial chain of command, received a ruling from the Supreme Administrative Court reinstating their banking license. Despite the capital issues, it would be a mistake to underestimate this asset. This is especially true if Kharkiv residents find an alternative to Avakov's foe, Kernes, in the upcoming elections. In that case, Arsen Borysovych's team will have an easier time negotiating debt repayment.
Moreover, court documents make it clear that the financial institution and its shareholders are left with more than just debt. Specifically, the court case register contains information about a bank rehabilitation program that involved the sale of its valuable assets. These include buildings in central Kyiv on Baseina and Krasnoarmeiskaya Streets, a property complex with land in Dergachi, Kharkiv Oblast, 29 hectares of land in Kyiv Oblast, a building in Kharkiv, several plots of land, an oil refinery, and an agricultural property complex. The rescue plan mentions a firm, Empor (UK) LLP, prepared to invest 100 million hryvnias in the bank, and several individuals who planned to provide the financial institution with over half a million dollars. The program remained on paper, but whoever these potential investors are, the bank's return to operation should only increase their confidence in their intentions.
Favorites of the courts
In 2014-2015, a wave of court rulings confirmed the rights of Avakov's family and businessmen close to him to similar assets. For example, this happened with a building on Petrovsky Street in Kharkiv, valued at over 26 million hryvnias. They also managed to stake a claim to 19 hectares of land near Kharkiv, where a cottage community may be built in the future. Several months ago, the Supreme Commercial Court upheld the ownership of this plot of land in the name of Invest Elite Bud (the beneficiary is Iryna Avakova). The land is partially covered by forest, and the prosecutor's office unsuccessfully attempted to return it to the state even last year.
The most famous link in the Avakov empire, PJSC Investor, was also a rather affluent enterprise five years ago. Until 2013, Arsen Avakov was president of this company, which specialized in information, consulting, and marketing services, wholesale trade, and office space leasing. According to official data, in 2010, the company's book value alone was 156 million hryvnias.
However, compared to the minister's family's gas business, this asset is nothing compared to it.
The Avakov family and partners have gas interests in several fields in the Kharkiv region. Specifically, these fields include the Maryinsky, Sakhalinsky, Denisovsky, and Rakitnyansky gas production areas in the Kharkiv region.
The income that gas production can generate from these developments is illustrated by the example of the Maryinskoye field.
Companies close to Arsen Avakov's circle – Energia-95 and Maryinske – operate two wells here and are building a third. In 2011, when persecution by the Yanukovych regime began, the companies pledged unextracted gas as collateral for third-party obligations. In the event of a corporate raid, such a ploy would have prevented a blitzkrieg.
The following related entities received collateral in the form of gas from the Maryinske field: Department Store Ukraine, Avista, Bonus-Zem, Ukraine-Holding, Vazus, and several individual borrowers from Basis Bank. The total value of the gas used as collateral exceeded 1 billion hryvnia. Two years ago, these contracts became the basis for a criminal case against Basis Bank's top management. Apparently, this case has also been closed. The contracts themselves were terminated several months ago.
Hundreds of millions can be extracted from underground not only at the Maryinskoye deposit.
As Liga.net reported, Energia-95 also holds a license to develop the Denisovskoye gas condensate field. According to the publication, 170 million cubic meters of natural gas were produced at this site in 2014, according to the Ministry of Energy. Ukrgazobycha, a company with comparable production volumes (171 million cubic meters in 2014), earned over 300 million hryvnias in net profit last year.
Three years ago, Avakov's companies, Investor-Naftogaz and the private enterprise Technological Investments Company, were replaced by little-known offshore companies D-tech Gaz Energy Limited (Cyprus), Energy Ditek Limited (British Virgin Islands), and Boston Industrial Corporation LP (Scotland), replacing Avakov's companies, Investor-Naftogaz and the private enterprise Technological Investments Company, as founders of Energia-95. Their addition as co-owners was a continuation of the campaign to reorganize the business. However, after the flight of Yanukovych's team, the former owners managed to oust the imposed partners through the courts.
The joint office of Energia-95 and Maryinsky is located at 4 Teatralny Lane in Kharkiv. Closely related companies, including the Denisovskoye Gas Condensate Field, Investor-Naftogaz, Gravelit-21, and Investor-Atika, are also registered there.
Billionaire Avakov
The latter is co-owned by Ihor Kotvitsky, the richest member of parliament from the People's Front. The day before, this MP made headlines by amending his 2014 income statement, increasing his declared bank account balance from 63 million hryvnias to 970 million hryvnias. Previously, Kotvitsky was known only as a business partner of the Avakov family, serving as vice president of Investor, where he owned 9,5% of the shares, before being elected.
Igor Kotvitsky
According to the legal entity register, Kotvitsky is also a co-owner of the Kharkiv firm "Sakhalinskoye," registered at the same Teatralny Lane, 4. His partner in this firm is former MP and head of the Batkivshchyna party in the Kharkiv region, Vitaliy Danilov.
In the early 2000s, the company entered into a joint venture agreement at the Sakhalin field with Poltavanaftogazgeologiya, a subsidiary of Nadra Ukrainy, and Golden Derrick, a company owned by the fugitive former Energy Minister Eduard Stavytsky. Two years ago, Golden Derrick acquired the state's 24% stake in the project, but the Supreme Commercial Court returned it to the state in February.
It's worth noting that a number of companies related to the Avakov family are registered not only on Teatralny Lane. A whole constellation is located at 88 Sumskaya Street. The offices of Basis Bank, Diatrek, Kyivskaya Hotel, Bullet Financial Company, Ukraina Department Store, Investor-Naftogaz, and Investor-Naftogaz-Rakitnyanske are located there. The name of the latter is another addition to the list of fields where a group close to the Minister of Internal Affairs has interests. The Rakitnyanske field was commissioned three years ago.
Today, the future of only one major asset, previously linked by law enforcement to Avakov's empire, remains unknown: a plot of land totaling approximately 700 hectares within the city limits of Kharkiv. Five years ago, this land served as a key claim in criminal cases against Avakov's team. In 2010, law enforcement opened a criminal case for fraud against Doro, a private enterprise that had acquired 698 hectares of land on the outskirts of the city. In the mid-2000s, this plot was allocated free of charge by local authorities to three hundred front men and then resold, ending up in the hands of a dozen companies. During the pre-trial investigation, it was established that the bank details of these companies included phone numbers that simultaneously belonged to Avakov's group: JSC Investor, PJSC AKB Basis, and DP Investor Elite Stroy. The courts previously returned the controversial plot of land to the local community, but the outcome of the investigation remains unknown.
However, on the eve of the local elections, the land issue has once again become a pressing issue. One of the Kharkiv mayoral candidates, Anatoly Radzinsky, is promoting the idea of distributing this land to local residents. Today, he even brought their representatives to a City Council session, where the city residents presented identical demands to the deputies.
See also: Field Marshal Avakov
Fedor Orishchuk, "Glavcom"
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