Vadim Ermolaev's Crimean business
A citizen of Cyprus and one of the largest developers in Dnipro Vadim Ermolaev continues to make money from the production and sale of alcohol in Crimea, writes Dmitry Filipenko, a freelance correspondent Delo.ua.
After the occupation of parts of southern Ukraine, Vadim Yermolayev's companies likely collaborated with the aggressor. The issue of National Security and Defense Council sanctions and the SBU criminal case against Yermolayev's businesses should be resolved soon.
According to the latest pre-war ranking of the richest Ukrainians, compiled by NV in November 2021, Dnipro businessman Vadim Yermolayev ranked a respectable 60th in the top 100 with a net worth of $173 million. A year earlier, Forbes estimated his fortune slightly higher, at $220 million. Business publications typically consider only the entrepreneur's Ukrainian assets, stating his main business is development—construction of shopping centers and residential real estate. In Ukraine, he is also involved in construction materials, agriculture, and agricultural machinery sales.
But another, no less important project of Vadim Ermolaev's remains undeservedly forgotten: business in occupied Crimea and in Russia, which has been conducted according to the occupier's rules since 2014. And even after the start of the full-scale invasion, these business ties were not curtailed.
Ermolaev does not see any contradiction in this.
"The war has been going on for three months now, and it has shown us that we can adapt to almost anything. And even continue to develop. War will make us stronger and wiser, even though we didn't choose to become strong and wiser this way. … And now we have two options: either fall into inaction or do what you can do today. And I would advise not to lose what you can preserve," Yermolayev wrote on his Facebook page on May 18.
It's hard to fault the entrepreneur: he strictly adheres to his business strategy, and despite the criminalization of collaborationism in the country and the risk of sanctions from the National Security and Defense Council, he actively works "on two fronts." After all, paying taxes in Crimea and Moscow today is like personally loading shells into guns that shoot our soldiers and civilians. Judging by the public reports of Yermolaev's Russian companies, the Dnipro businessman can confidently chalk up several villages razed to the ground by the Russians in Donbas.
Wine list of Vadim Ermolaev
One of Vadim Ermolaev's flagship projects is alcoholic beverages (wine, cognac, and vodka), produced in Crimea and in the town of Sinelnikovo near the Dnipro River. Until 2014, the company "Alef-Vinal" operated production facilities in both territories. However, after the annexation of the peninsula, the Crimean business was re-registered under Russian law. Alef-Vinal-Crimea currently operates there. Several years ago, journalists from Current Time and Municipal Scanner conducted a major investigation into how Ermolaev used his schemes to circumvent sanctions and export Crimean products worldwide.
We decided to check whether anything had changed in Yermolaev's business structure in Crimea since the Russian invasion on February 24. The result was as expected. It's no wonder, after all, that the entrepreneur advises himself and his social media followers "not to lose what can be saved."
This is why, according to extracts from the Unified Register of Russian Companies, Alef-Vinal-Crimea LLC still controls offshore companies associated with Yermolaev: the Cypriot companies AD Vinal Investments Limited, Dreamdestiny Holdings Limited, and Amadon Limited, as well as Zapeto LTD in the British Virgin Islands. These same offshore companies also control another Crimean company of Yermolaev's, Parkwine Corporation LLC, formerly known as Alef-Distillery.
However, as is well known, it's not so much owning a business in Crimea—even through Cypriot shell companies—but rather conducting business and paying taxes. Under Ukrainian law, this is equated with the financing of terrorism, a matter under the jurisdiction of the Security Service of Ukraine. Besides the obvious pretext for initiating criminal proceedings, paying taxes in Crimea is a direct route to being included in the sanctions list that the SBU is proposing to the National Security Council. This is especially true given that Yermolayev is a Cypriot citizen, and this won't raise any particular questions about imposing sanctions against a Ukrainian citizen.
How "effectively" does Yermolaev support state terrorism by funding the Russian army through tax payments to the Russian budget?
According to publicly available data, Alef-Vinal-Crimea paid 390 million rubles in taxes in Crimea in 2020 alone, and Parkwine paid just over 3 million rubles. Similar amounts in taxes and fees were likely paid in previous years. Incidentally, this amount could buy four or five Kalibr missiles, which Russia uses to shell Ukrainian cities and infrastructure. The number of Tochka-U missiles that could be purchased with this money runs into the dozens.
Furthermore, Yermolaev's wine and cognac companies borrowed money from RNKB, a special financial institution operating in Crimea, which is on all possible sanctions lists. They also participated in government tenders in the aggressor country, shipping their products to various Russian government agencies.
Doors to Crimea for Vadim Ermolaev
After the annexation of Crimea, another major company in Yermolaev's orbit, furniture hardware manufacturer Axor Industry, enjoyed a comfortable presence in the local market for several years. Media outlets reported that the company was so determined to establish itself in the Russian market that it even posted greetings for Russia Day on its corporate page. Following the scandal, however, the company's Russian representative office, Axor-Crimea LLC, was closed. However, Rox LLC, a consulting firm that issues certificates for Axor products in Russia and promotes them, still operates in Moscow. The company is owned by a Cypriot offshore company, Dreamdestiny Holdings Limited, a wine and cognac holding company. Some time ago, the email address of Rox CEO Elena Melodieva, which was published in Russian catalogs, was hosted on the corporate domain of the Ukrainian parent company. That is, the business made no secret of its Ukrainian roots, but at the same time, it continued to pay taxes and develop its network in Russia with a straight face.
In addition to journalistic reports, Yermolaev's hardware business's "double life" was also highlighted by his industry colleagues at the official level. Specifically, the scandal erupted during a discussion of anti-dumping policies regarding hardware: Axor wanted to protect the Ukrainian market, while violating every possible norm of international trade law and operating in sanctioned Crimea.
Field work
Another "collaboration" came to light recently, when the Kherson and part of the Zaporizhia regions of Ukraine temporarily came under the control of Russian occupiers. According to local entrepreneurs, branches of Agrotek, an official dealer of imported agricultural machinery, continue to operate in these regions. It is also part of Vadym Yermolayev's Alef Corporation. According to the company's website, it has branches in occupied Melitopol, Polohy (Zaporizhia region), Tavriysk, and Oleshky (Kherson region), as well as Volnovakha (Donetsk region). Neither the company's website nor its Facebook page reported any loss of control over these branches. Incidentally, Yermolayev's other company, TK Aterra LLC, which supplies and services agricultural machinery, also has a branch in Oleshky. It is understood that new equipment from John Deere and other manufacturers is not supplied or sold in the country. But the remaining stock, as well as spare parts and consumables, could very well be sold off, helping to prepare equipment for operation under gunpoint under the occupiers' conditions.
It's worth noting that it was from the Agrotek exhibition grounds in early April that Kadyrov's men stole combine harvesters, transported them to Crimea and Chechnya, and then remotely blocked them. However, with his experience working in two countries and evading sanctions, Yermolayev apparently decided to follow his own advice and "not lose what can be saved." It's possible that farmers in the Kherson and Zaporizhzhia regions will continue to use Agrotek dealerships for services, and he will continue to profit from the war.
It's hard to believe he'll be selling his products for free. It's safe to assume that, in a tight market and with the need for fieldwork, prices at Yermolaev's stores will likely rise significantly.
In the context of an open, aggressive, full-scale war, profiting from trade with the occupiers and under their rules—not only in the "rear" but also in the "newly occupied" territories—clearly deserves more than just public outcry and condemnation. First, financing terrorism is one of the most serious articles of the Criminal Code, and it contains all the elements that justify the SBU initiating a criminal case. Second, there is also criminal liability for collaboration in the occupied territories—this section specifically concerns Agrotek—and the SBU must also investigate this business for collaboration with the occupiers. And third, the above is a clear pretext for the National Security Council to impose sanctions against Yermolayev personally, followed by a freeze on his assets. Wartime laws require swift and decisive action. This case should serve as an example for anyone who still doubts the wisdom of closing their businesses in Russia and who is already rubbing their hands at the prospect of profiting from their fellow citizens under occupation. In this case, the advice to "not lose what can be saved" should apply to reputation and conscience, not the material assets that entrepreneur Vadim Ermolaev is so concerned about accumulating.
Skelet.Org
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