Denis Dzenzersky: He owes Ukraine, but pays Russia. Part 1
Denis Dzenzersky, a People's Front MP, not only finances the Russian army but also supplies critical components for its military equipment. This information isn't breaking news; it's literally out in the open, accessible to anyone who inquires about the operations of Vesta Corporation, which has been operating in Russia for many years, regularly replenishing its budget. Yet, for some reason, Dzenzersky's parliamentary colleagues, including his patriotic friend Yevhen Deidey , stubbornly ignore this . Meanwhile, Ukrainian law enforcement agencies are closing criminal cases against him for financial fraud and false disclosures. Moreover, having racked up billions in debt to Ukrainian and foreign creditors, Dzenzersky has no intention of repaying them, while still managing to continue profiting from his formally seized enterprises. How does he manage this?
The History of the Battery Academician
Denis Viktorovich Dzenzersky was born on December 22, 1978, in Dnipropetrovsk, the son of Viktor Aleksandrovich Dzenzersky, a research fellow at the Institute of Technical Mechanics of the Academy of Sciences of the Ukrainian SSR. He graduated from the prestigious Dnipropetrovsk School No. 1, after which he entered the economics department of the Dnieper Academy of Civil Engineering and Architecture. Naturally, Denis never served in the army—the son of a wealthy, elite family was not eligible. Immediately after receiving his diploma (in 1997), Denis Dzenzersky began working in the family business, which he continues to run to this day.
Victor Dzenzersky
Thus, from his birth until today, Denis Dzenzersky has been nothing more than the son of his renowned and enterprising father, to whom he owes everything. According to his acquaintances, Dzenzersky Jr. is little more than a child on his own; he didn't even inherit an academic aptitude (hence his education as an accountant at a construction academy), and it's unlikely he would have achieved such heights had his parents been simple workers. Therefore, Skelet.Org believes it's appropriate to begin this story with how Dzenzersky Sr. created the family business and brought his son up to prominence.
Viktor Dzenzersky (born 1944), originally from the Chernivtsi region, graduated from the Physics and Mathematics Department of Chernivtsi University and was assigned to a research institute in Dnipropetrovsk at the Academy of Sciences of the Ukrainian SSR. In 1968, he transferred to the Institute of Technical Mechanics (at the same Academy), where he worked until 1989. He then transferred to the Institute of Geotechnical Mechanics (also at the Academy of Sciences of the Ukrainian SSR), where he headed the Department of Physical and Technical Problems of Transport Using Superconducting Magnets, which he had founded. It sounded very futuristic, but the project never progressed beyond theories and laboratory experiments: they assembled a model of a "lunar rover" powered by superconducting magnets, which was occasionally rolled out of a barn. Incidentally, magnetic levitation trains were already operating in Germany and Japan at that time.
The brainchild of the dark genius Dzenzersky
A functioning magnetic levitation train in Japan
Nevertheless, this idea found its continuation at the Institute of Transport Systems and Technologies of the National Academy of Sciences of Ukraine, established in 1995 at the initiative of Viktor Dzenzersky, based on his Department of Physical and Technical Problems of Transport—and he also became its permanent director. This institute was only formally affiliated with the Academy of Sciences; in fact, it immediately began working for Dzenzersky's personal interests, and in 1997, it became part of his Scientific and Industrial Corporation "Ista." Fantasies about magnetic trains had already been forgotten, and Dzenzersky used the institute as an engineering department for his battery production facility. He also secured academician's regalia and financial support from the government for the facility.
Even before the collapse of the Soviet Union, rumors circulated that Dzenzersky had actually created "Horns and Hooves," using his Department of Transportation for foreign economic activity under the guise of a state research institute. He purchased not only laboratory equipment but also Japanese tape recorders and other consumer goods abroad, and exported metals and other goods. His joint venture, Oberon, may have had something to do with this, though it was later exposed in the media: in May 1993, the Cabinet of Ministers granted it a permit to export lead. This is how Viktor Dzenzersky earned his initial capital, and it was lead that he founded his business empire on, deciding to turn it into car batteries, which were in high demand even during Soviet times.
But he didn't build it at his own expense, nor at his own institute! First, Viktor Dzenzersky "got his act together" in Kyiv, persuading the Cabinet of Ministers to approve a program to build Ukraine's first battery plant in Dnipropetrovsk, for which PJSC Ista was created. This enterprise was initially state-owned, and its construction (1993-1995) was financed by the scandalous Bank Ukraina. Then came a somersault: the completed plant was transferred to CJSC Ista-Center, and later became the property of PJSC Ista-Center, and, along with other enterprises, was merged into the Ista Corporation, which had a rather convoluted structure. The debts to Ukraina were written off by inflation.
In 1998, Ukrprominvest, the family holding company of Oleksiy and Petro Poroshenko , became interested in Dzenzersky's battery business . They invested in the promising venture, and by 1999, Ukrprominvest controlled 41% of Ista-Center. As a bonus, Poroshenko, along with Dzenzersky, was named among the "inventors" and received a state prize as co-author of the "scientific and industrial complex for the production of lead-acid batteries." This "invention" was registered through Dzenzersky's private institute and approved through his extensive connections in Kyiv.
Then something happened between Poroshenko and Dzenzersky, because in 2001 they divided their businesses (remember that Petro Poroshenko supported Kuchma at the time and was one of the founders of the Party of Regions). Ista-Center, along with the company's first battery plant, the Energoavtomatika subsidiary, and Ukrsplav LLC, became the property of Poroshenko, who entrusted them to his friend and associate, Oleh Zimin. The only thing they didn't get was Viktor Dzenzersky's institute—probably only because it was formally state-owned. Dzenzersky, meanwhile, founded the Vesta International Scientific and Industrial Corporation (ISIC) and continued his battery business on a truly international scale, starting with Russia. In 2001, Dzenzersky launched a vigorous operation at the Kursk-based Accumulator Plant, then Russia's largest battery manufacturer. And just a year later, the first branch of Vesta, Istok LLC, appeared there.
Kursk business of the Dzenzerskys
The battery plant in Kursk opened in 1944 and, for over half a century, experienced no organizational problems until Viktor Dzenzersky arrived. The academician's battery business was accompanied by the emergence of numerous LLCs and CJSCs, which soon became confusing to the workers themselves, who updated their workbooks almost annually. The first of these was OOO Istochnik TOka Kurskiy (later simply Istok, then Istok+), which began operating on the plant's production facilities in 2002, followed by OOO Vesta-Center (renamed Kursk-Center in 2006). Then came OOO Kursk Battery Plant, and since 2012, half a dozen more Dzenzersky firms. Local journalists' attempts to figure out who was in charge were unsuccessful: the management of all these firms confused them, laughing in their faces. But after this, the question hung in the air: why so carefully conceal the schemes of a seemingly respectable international corporation?
There were two answers to this question. First, Vesta's acquisition of the Kursk-based Akkumulyator plant, which dragged on for years, wasn't always a fair and transparent process—after all, the Dzenzerskys couldn't operate any other way. For example, in 2011, Vesta Corporation acquired a 60% stake in the plant, and in 2013, it announced a 5 billion ruble investment in it , equivalent to $167 million at the then exchange rate. Incidentally, this occurred at the height of the Russian-Ukrainian trade war, which, for some reason, didn't affect the Dzenzerskys' Russian business at all. Moreover, that same year, Denis Dzenzersky, whom his father had appointed co-owner and vice president of Vesta Corporation, together with Dmitry Nikitin (manager of Russian Accumulators, in which the Dzenzerskys own a 25% stake), held successful business negotiations in Kursk with the local governor, Alexander Mikhailov. Let us emphasize: at that time, Denis Dzenzersky was already a member of parliament in the Verkhovna Rada, and yet he broke the law and ran his family business officially.
Business negotiations between Dmitry Nikitin, Denis Dzenzersky, and Kursk Governor Alexander Mikhailov (left to right). Kursk, 2013.
Dzenzersky proposes investing 5 billion rubles in the Kursk region's economy.
But behind the guise of these investments, the plant was driven to bankruptcy by the LLCs and CJSCs that had clung to it, and then bought up piecemeal. Moreover, the Dzenzerskys used funds from the Russian bank VTB, which they still have not repaid (not counting the debts of Vesta's Ukrainian enterprises, owed to VTB Bank's Ukrainian branch), as well as from Rosselkhozbank and Kurskprombank. The same situation is observed in Kazakhstan, where Vesta invested in the Kainar-AKB enterprise and now owes 648 million hryvnia to the Kazakh bank BTA, controlled by the oligarch Kenges Rakishev , a trusted "treasurer" of Nazarbayev's son-in-law, Timur Kulibayev.
Secondly, the Dzenzerskys had to conceal their Russian business even before 2014, since 2012, Denys Dzenzersky became a member of parliament on the Batkivshchyna party list (having purchased, according to Skelet.Org , the #34 seat). After the annexation of Crimea and the outbreak of the conflict in Donbas, Denys Dzenzersky, now a member of parliament from the ruling People's Front (since October 2014), simply had to bury the traces of his business in the aggressor country as deeply as possible—but not get rid of it, as it was generating a good profit. Now this business is truly well disguised: all Kursk companies have had their parent corporation, Vesta, removed from their records, and their shares have been transferred to shell companies with no publicly registered information. For example, OOO Istok+ (OGRN 1124632004650) was re-registered as OOO AKB-Holding (OGRN 1124632010051), the owner data of which was simply erased from public records.
And yet, this is truly ridiculous: the fact that the Kursk Accumulator plant belongs to Vesta has long been well known and has never been a secret, no matter how the company names change. And yet, the Dzenzerskys have "disguised" their business even on Vesta's official websites. The corporation's Russian website makes no mention of its Ukrainian roots, and the Ukrainian website makes no mention of Vesta's Russian or foreign branches. Apparently, this is not only for "patriotic" reasons, since this company pays hundreds of millions of rubles into the Russian budget, but also to avoid attracting unnecessary attention from creditors.
Sergey Varis, for Skelet.Org
CONTINUED: Denis Dzenzersky and Viktor Dzenzersky: He owes Ukraine, but pays Russia. PART 2
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