Gennady Bogolyubov: What is Privat's other half keeping quiet about?
When we say "Privat," we usually think of the eccentric oligarch Igor Kolomoisky, whose name has long been on everyone's lips. However, not everyone knows that he owns only half of this largest Ukrainian business group, with the other half belonging to his longtime friend and business partner, Gennady Bogolyubov. He has always avoided publicity, turning his face away from cameras and evading journalists' questions, saying that the nature of their business does not allow for openness. And this is the absolute truth: if Bogolyubov were to suddenly begin to open up about how exactly he and Kolomoisky built their business empire, they would need very good lawyers...
How the duet came together
Gennady Borisovich Bogolyubov was born on January 20, 1962, in Dneprodzerzhinsk (now Kamennoye), to a family of staunch Jews—they attended synagogue even during Khrushchev's wave of atheism, when it could easily lead to the loss of a good job. Contrary to rumors, he didn't know his future friend and partner, Igor Kolomoisky, from infancy, didn't attend the same school (and even lived in a different city), and didn't even attend the same university.
After graduating from Dniprodzerzhynsk School No. 5, Gennady entered the Dnipropetrovsk Civil Engineering Institute (now the Prydniprovsk State Academy of Civil Engineering and Architecture), graduating in 1984. Bogolyubov never revealed what he did for the next few years. Officially, he worked at the Dnepropetrovskpromstroy trust as a simple engineer. His biography mentions "cooperative activities," but old acquaintances once let it slip that Gennady Bogolyubov was involved in some dealings with "thieves in law." It was only in 1988 that he reappeared at the Fianit cooperative.
This was the Dnipropetrovsk branch of the Moscow Soviet-American-Finnish-Bulgarian joint venture Novintech, formally engaged in the development and implementation of some kind of electronic control systems. In reality, the joint venture used its foreign trade licenses for commercial trade: it exported metal, timber, and other raw materials from the USSR, and imported office equipment and various consumer goods, from VCRs to cigarettes and chewing gum. In the pre-shuttle trade era, when imports entered the country either through Vneshtorg or exclusively through such enterprises, they generated enormous profits. Fianit sold its goods first to enterprises (by barter), then to the first "stall owners"—and could not help but attract the attention of the racketeering establishment of the time. Perhaps this is how civil engineer Gennady Bogolyubov came to work at Fianit, which formally dealt with electronic systems.
In 1989, electrical engineer Alexey Martynov and metallurgical engineer Kirill Danilov (the latter's grandmother was an influential member of Dnipropetrovsk's old party establishment) joined Fianit. A few months later, Danilov brought his classmate Igor Kolomoisky to Fianit. That's how their historic meeting took place.
Less than a year later, Gennady Bogolyubov and Igor Kolomoisky, who had become friends, began plotting their own independent business. Their opportunity presented itself in the summer of 1990 after a business trip to Singapore to purchase office equipment: Kolomoisky proposed developing this supply chain independently, keeping all the profits for himself. By then, they had the opportunity to open their own joint venture, which they named "Sentosa"—supposedly the name of the island resort where Kolomoisky and Gennady Bogolyubov had spent several exciting days on business. They opened their first "office" in the back room of a city movie theater.
This was the first "office" of Bogolyubov and Kolomoisky
They were joined by Alexey Martynov and Leonid Miloslavsky, who had earlier left Fianit. He was the son of Dnipropetrovsk "workshop owner" Arkady Miloslavsky, a psychiatrist by training, and a man with extensive connections and ambitions. This quartet, which in 1990-91 had been involved in the haphazard import of electronics and consumer goods, became the foundation of the future business empire. It finally took shape in early 1992, when Sergei Tigipko ( read more about him in the article " Sergey Tigipko: Komsomol Oligarch Covers His Tracks "), who had just left Dnipro Bank, joined the company. He was an old acquaintance of Kolomoisky's from the Dnipro Metallurgical Institute, but Kolomoisky was skeptical of his proposal to create his own bank. Miloslavsky, however, was enthusiastic about the idea, persuaded Bogolyubov, and together they "persuaded" Kolomoisky. Thus, on March 19, 1992, PrivatBank was founded: initially, its owners were equal: Gennady Bogolyubov, Kolomoisky, Martynov, and Miloslavsky, as well as Serhiy Tigipko (who never acknowledged his stake), who became its first chairman of the board. The Privat Group, which became one of Ukraine's largest business projects, formed around this bank.
Alexey Martynov
But how did it happen that of PrivatBank's five co-owners, only two remained (plus a 0,46% stake for its chairman)? It's a very strange story, one with many omissions. The changes occurred in 1997, immediately after the end of the war between PrivatBank and Prime Minister Lazarenko. Serhiy Tihipko left for Kyiv to work in the government, and by 2001, he had gradually sold his shares to Kolomoisky. That same year, Leonid Miloslavsky, the only person capable of controlling Kolomoisky's restless energy, died in Austria, allegedly of a heart attack. Immediately after his death, Kolomoisky and Bogolyubov personally ensured that Miloslavsky's shares would be inherited by his underage daughter, Marianna. From the outside, this seemed quite noble: business partners caring for their friend's child! But this "nobility" had an interesting ending: as soon as Marianna turned 18 and was able to fully control the shares, her stake quickly shrank, first to 3%, and then to zero. And all of it ended up in the hands of her "benefactors"—Uncle Igor and Uncle Gena.
Martynov's stake, similarly shrank to 1,23%—he became as much of a private businessman as Bogolyubov. The latter, however, increased his stake in PrivatBank to 40%, making him and Kolomoisky the largest equal co-owners of Privat. They remain in this position to this day: although they no longer own PrivatBank, they retain other Privat Group enterprises.
Both Kolomoisky and G. Bogolyubov, 90s
Gennady Bogolyubov and Igor Kolomoisky – The Raider Kings
In 1995, Privatbank entered the voucher privatization process, purchasing 1,2 million certificates from the public. Formally, Ukrainians were supposed to receive shares in the companies in exchange; in reality, not all of them received even a few hryvnias for their certificates. Only Privatbank owners, who had been privatizing using their own schemes, became owners. Bogolyubov and his associates' first voucher acquisition was the Dnipropetrovsk Hardware Plant, whose products the Privatbank members had previously successfully sold abroad as intermediaries. Now they became co-owners, dramatically increasing the plant's profits by eliminating social security and reducing staff (a condition of privatization). Their next voucher acquisitions included the Mykolaiv Ferroalloy Plant and the Ordzhonikidze and Marganets Mining and Processing Plants.
A distinctive feature of Privat's schemes in the 1990s and early 2000s was the ownership of only partial shares in enterprises that were not fully privatized at the time. This didn't bother Bogolyubov and Kolomoisky: it was important to them that the company had no third major shareholder besides themselves and the state. Back then, they would impose their own CEO on the company and control it, siphoning off all the profits. However, the second wave of privatization in the early 2000s presented a problem due to Bogolyubov and Kolomoisky's inability to find common ground with President Kuchma and his new son-in-law, Viktor Pinchuk ( read more about him in the article " Victor Pinchuk: Ukraine's Richest Son-in-Law "). Pinchuk himself began a massive acquisition spree, sometimes taking over the shares being sold outright, sometimes in partnership with other oligarchs. This is how Pinchuk and Privat became co-owners of the Nikopol, Stakhanov, and Zaporizhzhia ferroalloy plants, the Kryvyi Rih Iron Ore Plant, and the Ordzhonikidze Mining and Processing Plant. Since Pinchuk had his own "management company" scheme, under which he placed his own people in charge of the enterprises and then "stealed" their profits, a major and protracted war broke out between him and Privat.
Of course, it was difficult to call it a war—in the Ukrainian sense. Being VIP parishioners of the same synagogue—the Minora center in Dnipropetrovsk, which belonged to the Chabad Hasidic community—they tried to maintain a civilized atmosphere, as requested by Rabbi Shmuel Kaminetsky. Therefore, the most intense episode of their confrontation was the "battle" over the NZF in 2005, which was subjected to a hostile takeover by Bogolyubov and Kolomoisky's men. After that, they resolved their disputes in international courts, engaging in years of litigation. For example, the case involving the Kryvyi Rih Iron Ore Plant only ended in reconciliation in January 2016! However, the Privatites were not so polite with everyone. Dnepropetrovsk, and other Ukrainian cities, still remember their seizures, carried out by the hands of Vyacheslav Braginsky and Gennady Korban – known as the “Privat raiders.”
Vyacheslav Braginsky
Privat's men had been using Braginsky's services since 2002-2003, when a scandal erupted around the Dnipropetrovsk Research Institute of Large-Size Tires (LSTI), which was part of the Bogolyubov-Kolomoisky business. Braginsky, who had a reputation as a "patent virtuoso" (he could appropriate or challenge such rights), helped the research institute appropriate patents for a number of tires manufactured by the Japanese company Bridgestone. As a result, the company lost half of its Ukrainian market because Privat now ordered tires for the Ordzhonikidze and Marganets mining and processing plants' dump trucks from the LSTI. Bridgestone complained to Leonid Kuchma himself through the Japanese ambassador to Ukraine, but to no avail. The LSTI began producing tires for export. In 2005, Braginsky became the registered owner of the WellCOM trademark—just before Bogolyubov and Kolomoisky sold Ukrainian Radio Systems CJSC (WellCOM trademark) to Russia's VimpelCom. And in 2006, he helped Privat take control of Dniprovodokanal. He and Gennady Korban participated in the seizures of the Dnipropetrovsk hotels Grand Hotel European and Astoria Lux (owned by Pavlo Lazarenko), the Olympic-2 residential complex, and Zolotye Klyuchi. Thus, gradually, Bogolyubov and Kolomoisky gained control of the entire city.
Braginsky's services also came in handy during Privat's war for the Dnipropetrovsk market "Ozerka," which involved raider Gennady Korban (head of the firm "Slavutich-Registrar"), who, as Skelet.Org has learned , was "picked up" by Bogolyubov. The battle required the services of tough guys from Privat's private security company, with the ambitious name "B.O.G." ("Security. Protection. Guarantee"). It was a long, bloody affair. One might wonder why mega-oligarchs like Bogolyubov would need Kolomoisky Bazaar. There were several opinions on this matter: for example, a construction company called "Mission," owned by the Kreynin family, which is related to Vladimir Litvin, laid claim to part of the Ozerki territory ( for more details, see the article "Vladimir Litvin: Does Ukraine Need a Professional Judas? "). So, this war for Ozerki between Privat's men and Russian businessman Maxim Kurochkin (nicknamed Max Besheny) reached its climax in October 2006: clashes broke out at the market between Kurochkin's "titushki" (illegal guards) and a Privat private security company, with the Berkut riot police arriving to assist the latter, not without the personal orders of Interior Minister Yuriy Lutsenko ( for more details, see the article "Yuriy Lutsenko: The Terminator of Ukrainian Politics ").
Then Maksym Kurochkin arranged with Korban to visit Dnipropetrovsk to resolve the conflict in a private conversation with Kolomoisky and Bogolyubov. Unfortunately, Kurochkin was not a VIP member of the Menorah parish, and Bogolyubov and Kolomoisky had no intention of honoring him. On November 20, 2006, immediately upon his arrival in Ukraine (Boryspil Airport), Kurochkin was arrested and placed in pretrial detention, where he spent four months. During this time, Vladimir Vorobyov, director of the Ozerki market (Kurochkin's man), was murdered in Dnipropetrovsk on December 16, and in March 2007, Kurochkin's head of security, Alexander Kharchishen, and two of his close acquaintances were shot in a car near Kyiv. Finally, on March 27, 2007, a sniper shot and killed Maksym Kurochkin himself, right in the courtyard of Kyiv's Svyatoshinsky District Court—a brazen, high-profile murder that shocked Ukraine. The investigation immediately deflected any hint of involvement from Korban, much less the owners of Privat, and ultimately led to the arrest and conviction of six individuals, whose guilt was highly questionable. Kurochkin's murder had another consequence: Natalia Vitrenko's PSPU, which he had financed, completely dropped out of the political race and was soon "finished off" by the Party of Regions, which lured its voters away.
However, when Vyacheslav Braginsky was killed in an explosion in Dnipropetrovsk on October 13, 2009, the media labeled it revenge against PrivatBank for Kurochkin's murder. However, it was during this period that Korban was seizing Pavel Lazarenko's businesses—the Astoria-Lux Hotel and the Grand Hotel European. Braginsky's company, Ukraine-Canada, held some of the shares in these hotels. Just a few days before the tragedy, Gennady Korban transferred the shares to another legal entity. On October 15, he spoke at a press conference at UNIAN, and then on Savik Shuster's program, blaming Lazarenko for Braginsky's death.
Ultimately, Bogolyubov and Kolomoisky were left with only one raider – Gennady Korban, whose services they continued to use for many years. Specifically, as early as 2007, Korban helped Privat take control of Ukrtatnafta (and the Kremenchuk Oil Refinery), initially with only 1,5% of the company's shares! For recapturing the Kremenchuk Oil Refinery, they made Korban vice-governor of Dnipropetrovsk, until they sacrificed him in 2015, beginning to lose the major war against the Poroshenko-Avakov alliance ( read more about him in the article " Arsen Avakov: The Criminal Past of the Minister of Internal Affairs ").
Valeria Bardo (right) in Arsenal FC's erotic calendar
Gennady Bogolyubov: People are dying for metal.
According to Korrespondent magazine, Gennady Bogolyubov's net worth reached $6,2 billion in 2008—the peak of his wealth—and his equal partner, Igor Kolomoisky, had a similar amount. For the past ten years, they have ranked second and third among Ukraine's richest people, behind only Rinat Akhmetov. Yet, at Privat, Bogolyubov's primary focus was chemicals and metallurgy—like that of his "junior partner," Alexey Martynov. Incidentally, while Kolomoisky spent considerable time in Europe and Israel (and hasn't been back to Ukraine for a long time), Martynov primarily resided in Dnipropetrovsk, while Bogolyubov, in his own words, "was in Kyiv, London, or on a plane."
Gennady Bogolyubov is the owner of the investment company Palmary Enterprises Ltd., through which he owns the mining companies Ghana Manganese Company (Ghana), Nsuta Gold Mining (South Africa), and the Australian Consolidated Minerals, which accounts for 10% of global manganese ore production. He is also acquiring shares in Highlanders Alloys (USA), Chiaturamanganese (Georgia), and Feral CA (Romania), aiming to create a holding company that would control 30% of global manganese production. Gennady Bogolyubov is also the owner or co-owner of: the Zaporizhzhya and Stakhanov Ferroalloy Plants, the Ordzhonikidze and Marganets Mining and Processing Plants, the Kryvyi Rih Iron Ore Plant, and the Evraz group of companies (Russia, Ukraine, Kazakhstan, Canada, Britain, South Africa), in which he holds a share through Evraz Group SA (Luxembourg), Evraz plc (England) and Lanebrook Ltd (Cyprus).
But metallurgy is a capricious child of global business, and after the crises of 2008-2009 and 2014-2016, Bogolyubov's shares fell sharply in price.
In 2016, his net worth was estimated at just $1,3 billion (the same as Kolomoisky and Martynov's $400 million), and other Ukrainian oligarchs are already breathing down his neck. However, Bogolyubov also has other assets in his pocket: Privat Taxi, Dnipro Plast, Ukrpoligrafmedia, Europa Plus, Avtoradio, Ukrnafta, Avias, DniproAzot, DniproAvia, the British JKX Oil & Gas Plc (which is involved in oil production in Ukraine), and others. A mansion on London's Trafalgar Square, purchased in 2010 for 173 million pounds ($275 million), was also a significant investment.
Bogolyubov's mansion on Trafalgar Square
The Bogolyubov-Kolomoiskyi business also benefited significantly from the ATO that began in 2014. As early as March and April, these "patriots," as a broad gesture of goodwill, began refueling Ukrainian Armed Forces vehicles with Ukrtatnafta fuel. However, the Privat people failed to report that they received 545,5 million hryvnias from the Ministry of Defense for this, and that they "squeezed" the oil from the state. They earned another 55,3 million from supplies of Polish Maskpol body armor. Then, Gennady Bogolyubov and Kolomoisky lobbied for a series of discounts and benefits (as patriots), as a result of which: Ukrnafta (semi-state-owned) suffered a 1,08 billion hryvnia loss due to the sale of oil at a reduced price to Privat's puppet companies; the budget lost 700 million hryvnias in oil production rent; UIA failed to pay Boryspil 145 million. But the most successful deal was PrivatBank receiving almost 20 billion hryvnias in refinancing, which was never repaid.
PrivatBank received its first state refinancing (9 billion hryvnias) during the 2008-2009 crisis—and, like many banks, used the money to buy up dollars on the Interbank Exchange. This caused the hryvnia exchange rate to plummet: while the dollar was worth 5,08 hryvnias on September 30, 2008, it reached 8,75 hryvnias in early January 2009. However, banks attributed the decline to public sentiment (which only bought 13% of the dollars). In 2012, PrivatBank received a new refinancing line, and by December 2013, it had received another 3,72 billion hryvnias from the National Bank. PrivatBank wasn't given the money for free: by that time, the bank's problem of non-performing loans had already become clear. Moreover, almost all of these loans were issued to troubled companies within the Privat Group or to offshore shell companies. The essence of the scam was that the loans were issued using depositors' money or refinancing funds from the National Bank—meaning PrivatBank was stealing household deposits and public funds, siphoning them off as bad loans. The state, meanwhile, was attempting to save Ukraine's largest bank from bankruptcy (which would have paralyzed the financial system and impacted millions of Ukrainians) by injecting new money into it. Later, the media wrote that Kolomoisky and Bogolyubov's "patriotism" had a simple explanation: if the "Russian world" had suddenly arrived in Dnipropetrovsk, PrivatBank would have immediately collapsed, and its owners could have been arrested for fraud and embezzlement.
But Euromaidan saved Privat from ruin, and the new government began pouring new billions into it: on March 31, 2014, its refinancing debt grew to 12,85 billion hryvnias, by June 2014 it reached 18,05 billion, by January 1, 2015 it was already 22,8 billion, and by January 1, 2016, it was already 27 billion hryvnias!
Meanwhile, PrivatBank, fearlessly and openly, stole this money as well. Between May and September 2014, PrivatBank issued loans to 42 shell companies to purchase goods abroad, transferring $1,6 billion into the offshore companies' accounts! The dollars, of course, were purchased on the Interbank Currency Exchange, which devastated the already weak hryvnia. As a result of this operation, the money was irrevocably transferred abroad, then transferred to PrivatBank's Cypriot and Latvian branches (owned by Bogolyubov), which are independent divisions—effectively separate banks—that remained under the ownership of PrivatBank's people.
And this was only one, albeit the largest, episode of Privat's financial scams in 2014-2015. As is well known, its owners (Kolomoisky owned 49,98% of its shares, and Gennady Bogolyubov 41,58%) escaped with only a rude awakening, losing nothing in this "nationalization." In effect, the state seized a long-bankrupt bank with colossal debts to depositors and the National Bank (and all the bankrupt companies it held as collateral), letting Kolomoisky and Bogolyubov go free with $1,3 billion each. But as Skelet.Org sources report , this is only the size of the business partners' officially disclosed assets. Considering the enormous funds siphoned off through fraudulent schemes, Kolomoisky and Bogolyubov's offshore accounts could hold almost equal sums.
Sergey Varis, for Skelet.Org
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