Igor Kolomoisky. Privat Group. Portrait of an Oligarch
Data from report The Center for Economic Strategy "Oligarchic Ukrainian Capital" publishes Our money.
Gennady BogolyubovIgor Kolomoisky and Oleksiy Martynov are the fourth, fifth, and ninth richest people in Ukraine. They are the main beneficiaries of the Privat financial-industrial group (which does not exist de jure, as there is no officially registered holding, association, or corporation called Privat). The original founders of PrivatBank were three companies: Solm (Martynov-Miloslavsky), Sentosa (Kolomoisky-Bogolyubov), and Vest.
Unlike РђС ... метовР° or PinchukaThe assets of Kolomoisky, Bogolyubov, and Martynov are difficult to structure, as many are registered to related individuals registered abroad and dozens of offshore and foreign companies. Investigative journalists at the Anti-Corruption Action Center wrote in more detail about some of the Privat Group's business asset structure.
Overall, the YouControl system links nearly 975 companies and 37 key individuals to the Privat business group. Although PrivatBank is no longer part of the group, the group still bears that name. Between 2015 and 2019, a significant number of their assets were seized, PrivatBank was nationalized, and their influence in some areas diminished. Furthermore, lawsuits have been filed against Kolomoisky and Bogolyubov, and several investigations have been launched in Ukraine and abroad. Despite this range of interests and potential influence, these oligarchs remain significant.
Alexey Martynov is one of the most private businessmen. He is the director of Solm Ltd., part of the Privat financial and industrial group. He was a member of PrivatBank's supervisory board from 2000 to 2016 (during the bank's nationalization). His assets are financially related, although it is nearly impossible to accurately determine his interests separately from those of other Privat Group members. Privat Group ranks second in assets after Rinat Akhmetov.
Igor Kolomoisky. INDUSTRIES OF INTEREST
METALLURGY
Kolomoisky and Bogolyubov's largest assets are in the metallurgy sector. In addition to Ukrainian companies, they also own metallurgical plants in the United States. In May 2019, state-owned PrivatBank filed a lawsuit against Ihor Kolomoisky and Gennadiy Bogolyubov in the Delaware Court of Chancery, alleging embezzlement of $623 million through the transfer of funds from PrivatBank accounts. The funds were used to acquire assets of American companies, including CC Metals and Alloys, a US ferrosilicon producer and supplier; Felman Production LLC, a ferrosilicon manganese producer; Kentucky Electric Steel, Warren Steel, Corey Steel, and Detroit Cold, a rolled metal plant. Consequently, the FBI launched an investigation, according to journalists.
Metallurgy, particularly the ferroalloy business, is also an area of interest for Martynov. Martynov himself stated that they have significantly increased their ore and ferroalloy assets, considering this area to be very promising. Kolomoisky also stated this in an interview with Zerkalo Nedeli: "Martynov's priority is ferroalloys."
Igor Kolomoisky. Privat Group. Portrait of an Oligarch
Igor Kolomoisky. OIL AND GAS INDUSTRY
Ukrnafta is Ukraine's largest oil producing company. Ihor Kolomoisky is the beneficial owner of 42% of Ukrnafta's shares. The controlling stake (50% plus one share) is owned by the state through Naftogaz Ukrainy. Despite this, from 2010 to 2015, an agreement existed under which minority shareholders had the right to appoint the chairman and board members of Ukrnafta, allowing them to profit from Ukrnafta's dealings with companies under their control.
In 2012, Ukrnafta paid $474 million to Kolomoisky-affiliated Rialis Oil LLC for future deliveries of fuel oil, gasoline, and diesel fuel, but Ukrnafta never received the oil products or the money back. In 2014, Ukrnafta stopped paying royalties for oil and gas production.
In 2015, the company issued advances for future deliveries of petroleum products to 24 companies associated with the Privat Group. The company also sold $355 million worth of crude oil to Kolomoisky's Ukrtatnafta.
In 2019, Ukrnafta's tax debt amounted to UAH 13,895 billion. In May 2019, it was announced that the company had repaid UAH 1,5 billion of its debt over the past six months. In March 2019, Ukrnafta shareholders decided to use the sale of 4 billion cubic meters of gas to Naftogaz of Ukraine to pay off the tax debt.
Kolomoisky also exerted pressure on JSC Ukrtransnafta. As was previously the case with Ukrnafta, the state has no influence in Ukrtransnafta, despite Naftogaz owning 43% of the shares. The company's last shareholder meeting was held in 2010. Meanwhile, a former shareholder of Ukrtransnafta (the Russian company Tatneft) filed a lawsuit against Ukraine in an international tribunal. The debt to Tatneft currently stands at $140 million. Kolomoisky himself hopes that the debt to Tatneft can be written off in exchange for Russia's debts to Ukraine for property in occupied Crimea, rather than funds from the Privat Group.
The group also owns (or influences) a network of gas stations operating under the brands Avias, Ukrnafta, ANP, ZNP, Sentosa Oil, Yukon, and Rubix. The network comprises approximately 1,5 gas stations, or almost 25% of the total in Ukraine. In 2021, the Antimonopoly Committee fined the chains UAH 4,7 billion for price fixing in 2016, one of the largest fines in the committee's history (though the fine was never paid).
Igor Kolomoisky. Privat Group. Portrait of an Oligarch
TRANSPORT
Ihor Kolomoisky's main asset in the transport sector is PJSC MAU, through shares in Capital Investment Project LLC and Ontobed Products Limited LLC. The full list of its beneficiaries is unknown. Kolomoisky himself stated that he owns 25% of the shares (excluding possible related parties).
Kolomoisky also controls Windrose Airlines, Aerosvit (bankrupt), Dniproavia, and Donbassaero. Windrose Airlines won a tender to provide special flights for government officials in August 2019. Bogolyubov and Kolomoisky also own the Borivazh grain handling complex at the Yuzhny port.
CHEMICAL INDUSTRY
Among the companies whose assets were seized to cover PrivatBank's debt to the National Bank of Ukraine was JSC Dniproazot. In 2018, this company, a monopoly producer of liquid chlorine needed for water utilities, ceased production, allegedly awaiting approval from the Antimonopoly Committee for a price increase. The AMCU responded that such approval was not necessary, but reiterated that a monopoly's suspension of production constituted an abuse of its monopoly position. At the end of 2021, the AMCU fined the company UAH 80 million.
FOOD AND AGRICULTURAL SECTOR
The Privat Group's land bank exceeds 100,000 hectares. The group also owns the Shchedro brand, which includes the Lviv, Kharkiv, and Zaporizhzhia oil and fat plants, as well as the Biola brand, which produces juices, water, and other carbonated beverages.
ENERGETICS
Kolomoisky and Bogolyubov hold minority stakes in the Poltava, Chernihiv, Sumy, and Khmelnytskyi regional power companies, as well as small stakes in the Dnipropetrovsk and Zaporizhzhia regional power companies.
Furthermore, the group exerted indirect influence over the state-owned generating company, Centrenergo. According to numerous media reports, the company was headed by people close to Kolomoisky, who facilitated the following scheme. A private company (namely, United Energy) sold energy resources to the state-owned company at inflated prices and purchased electricity at a discount. Moreover, unlike other suppliers (in particular, Naftogaz), this trader was paid in full.
IGOR KOLOMOISKY. REGULATIONS IN WHICH INTERESTS ARE PRESENT
ELECTRICITY TARIFFS
According to the decision of the Kyiv District Administrative Court, JSC Nikopol Ferroalloy Plant (NFP), JSC Dniproazot, JSC Marganets Mining and Processing Plant, JSC Pokrovsky Mining and Processing Plant, and JSC (companies affiliated with Igor Kolomoisky) use the tariff of 57,4 UAH/MWh. For other market participants, the tariffs approved by the NEURC Resolutions No. 954 and No. 955 dated 07.06.219 apply: 347,43 UAH/MWh and 8,9 UAH/MWh, respectively.
TATNEFT PAYMENTS AND PETROLEUM PRODUCT IMPORT QUOTAS
Until 2007, 18,296% of Ukrtatneft's shares were owned by companies close to Tatneft, 28,8% by the Ministry of Property of the Republic of Tatarstan (Russian Federation), and 8,6% by Tatneft. However, according to journalistic investigations, as a result of a series of court decisions and a corporate raid, these shares of the refinery were sold to companies from the Privat Group. Therefore, as of April 2019, Kolomoisky owns 28% of the shares. The state, through Naftogaz of Ukraine, owns 43%. In 2008, based on the Russian-Ukrainian agreement on investment protection (1998), Tatneft filed a claim in the International Arbitration Court, which in 2014 ordered Ukraine to pay Tatneft 122 million hryvnias.
The Republic of Tatarstan filed a similar lawsuit against Ukraine in 2016, seeking $300 million in compensation. The High Court of London will hear another lawsuit filed by Tatneft against Bogolyubov, Kolomoisky, Yaroslavsky, and Ovcharenko in the fall of 2020, seeking $334,1 million in compensation and interest for oil delivered to the Kremenchuk Oil Refinery. Furthermore, in November 2018, PJSC Ukrtatnafta petitioned the National Security and Defense Council (NSDC) to conduct an anti-subsidy investigation into gasoline imports from Belarus.
OIL TRANSPORTATION RATES
From 2009 to 2015, the head of the state-owned Ukrtransnafta was Oleksandr Lazorko, a close associate of Igor Kolomoisky, as a result of which the Privat Group received a number of preferential terms.
Thus, several agreements were concluded, according to which more than half of the state-owned technological oil was given for storage to three companies: PJSC NPK-Galichina, PJSC Naftokhimik Prykarpattya, and PJSC Ukrtatnafta (all close to Igor Kolomoisky).
In 2014-2015, Ukrtransnafta siphoned 600 tons of industrial oil from pipelines, allegedly to protect against separatists, and sent it for storage at Kolomoisky's facilities. Lazorko also maintained low oil transportation rates at the Kremenchuk Oil Refinery, which is also controlled by the Privat Group. Consequently, there is a risk of influencing the National Commission for State Regulation of Energy and Public Utilities (NEURC) to increase oil transportation rates.
RESTRICTION OF COMPETITION IN THE AIRLINE MARKET
For a long time, Igor Kolomoisky facilitated Ukraine International Airlines' monopolization of the aviation market. Dnipro Airport was monopolized due to Privat Group's control over it; this situation only changed in September 2022.
AVIATION FEE
On May 16, 2018, the Grand Chamber of the Supreme Court of Ukraine refused to approve the State Aviation Service's request to review the resolution of the Supreme Administrative Court of Ukraine dated May 16, 2017, in case No. 826/17492/16 on recognizing as illegal and invalid the resolution of the Cabinet of Ministers of Ukraine dated September 28, 199 "the creation of the State Specialized Fund for Financing General Government Expenditures on Aviation Activities and Ukraine's Participation in International Aviation Organizations" from January 1, 2014 to March 22, 2017, when a resolution was adopted amending the Regulation on the State Specialized Fund for Financing General Government Expenditures on Aviation Activities and Ukraine's Participation in International Aviation Organizations.
Back in 2015, the National Anti-Corruption Bureau's main detective unit reported suspicions to the State Aviation Service's investigator, the president, and the chief accountant of UIA. Specifically, UIA collected an aviation tax on domestic and international passenger and cargo transportation, but failed to transfer it to the fund. The unpaid amount for 2014-2016 amounted to 147 million hryvnias. Furthermore, the State Aviation Service issued an order allowing the air carrier to receive new flights despite outstanding debts to the fund.
Igor Kolomoisky. PRIVATBANK COURTS
Before PrivatBank's nationalization in 2016, its beneficial owners were Ihor Kolomoisky (49,98%) and business partner Gennady Bogolyubov (41,58%). Another 8,5% belonged to minority shareholders, such as Chairman of the Board Oleksandr Dubilet.
In 2015, Ihor Kolomoisky signed a personal guarantee agreement with the National Bank of Ukraine to repay five PrivatBank refinancing loans received between 2008 and 2014.120 In December 2018, the NBU filed a lawsuit in the first instance of the Court of the Republic and Canton of Geneva against Ihor Kolomoisky for a total of UAH 6,64 billion.
The nationalization of PrivatBank triggered a series of lawsuits, both in Ukraine and abroad. Ukrainian courts, which had seemed to favor the government and the NBU in 2017-2018, then began ruling in favor of the former owners.
The Ukrainian authorities may have committed procedural errors during the complex nationalization process, which took place under high pressure. However, given the former owners' refusal to recapitalize the bank, nationalization was the only alternative to bankruptcy, as the bank, due to its size and economic impact, could be classified as too big to fail.
According to NBU representatives, previous loans from related parties are not being serviced. The legal proceedings are aimed, among other things, at recovering the debts of related parties to compensate the state for the bank's recapitalization costs. Court decisions questioning the legitimacy of these loans or the nationalization process reduce the chances of recovering taxpayers' lost funds.
On May 13, 2020, the Verkhovna Rada passed a law making it impossible to return troubled banks to their former owners and limiting compensation. This law was primarily intended to complicate PrivatBank's former owners' attempts to reclaim the bank, which is why it was immediately dubbed the "anti-Kolomoisky" law.
Kolomoisky previously stated that he wanted to regain his shares in the nationalized PrivatBank or return his $2 billion in capital.
Key lawsuits:
- Case No. 826/7432/17124, in which Kolomoisky is challenging the state-owned bank's purchase and sale agreement in the Kyiv District Administrative Court, was suspended on March 2, 2021, by the Sixth Administrative Court of Appeals following the Constitutional Court's ruling on the "anti-Kolomoisky" law. However, on June 1, 2022, the Supreme Court upheld the cassation appeals of the bank, the NBU, and the Cabinet of Ministers, overturning the ruling and ordering the case to continue on appeal.
- Case No. 910/1834/19125 essentially duplicates the previous case. On June 13, 2022, the Kyiv Commercial Court postponed the hearing. On June 28, the Supreme Court denied the plaintiff's request to open cassation proceedings. On June 21, 2022, the court of first instance (the Kyiv Commercial Court) resumed the proceedings.
- Case No. 910/15737/20126 is similar to the previous cases, but concerns the rights and interests of Gennady Bogolyubov. The trial is ongoing.
- Case No. 826/6664/17127 concerns how the Cypriot company Triantal Investments, associated with the former owners, is challenging the results of a bank audit conducted prior to its nationalization. The cassation hearing is ongoing.
POTENTIAL RISKS
The main concern is Kolomoisky's avoidance of responsibility for driving PrivatBank into bankruptcy and failing to repay loans to related parties and refinance the NBU. Until recently, other risks existed (in the energy, metallurgy, and aviation sectors), but they have become less relevant.
MEDIA
The 1+1 media group is owned by Igor Kolomoisky, Igor Surkis, and Oksana Marchenko (Viktor Medvedchuk's wife). The 1+1 television channel is one of the most popular in Ukraine.
Control over the media allows both to undermine opponents and to improve one's public image. Back in 2016, the CEO of the 1+1 group stated that 1+1 and its numerous subsidiaries had been operating at a loss for almost ten years, but the media group was important to Kolomoisky due to its influence (Kolomoisky's media holdings have since been transferred to the Privat Group).
Makarov, a man associated with 1+1 since its founding, called the channel a "tool" in 2016, and not without reason, since the channel often aired programs that attacked Kolomoisky's opponents and, conversely, positively covered his own activities and the activities of political parties associated with him.
Chart 14. TV channel ratings by owners
Igor Kolomoisky. SPORT
Ihor Kolomoisky's largest sports asset was FC Dnipro, of which he became a co-owner in 1996, when the Dnipro-based Privat Group acquired the club. However, it took ten years for the team to begin actively spending on Dnipro. Prior to that, the team initially struggled to break even, but ultimately settled for moderate budgets and investments.
During his 23 years as manager, Kolomoisky and his partners acquired players for €100 million and financed the construction of the Dnipro Arena football stadium in 2008 for €65 million. According to journalists' estimates, Kolomoisky spent approximately $350 million on Dnipro.
Kolomoisky's Dnipro, in its heyday, was considered the third or fourth force in Ukrainian football, behind Akhmetov's Shakhtar, the brothers' Dynamo Surkisov, about at the level of Metalist РЇСЂРѕСЃР »Р ° РІСЃРєРѕРіРѕThe budgets of these football clubs also corresponded to these schedules. Moreover, for several seasons, Kolomoisky and his partners were linked to funding several other professional clubs besides Dnipro: Kryvbas Kryvyi Rih, Volyn Lutsk, Karpaty Lviv, and Arsenal Kyiv (and, according to some reports, indirectly, Dynamo Kyiv). The aforementioned clubs played alongside Dnipro in the Ukrainian Football Championship; the media referred to this group as "classmates."
As with the case of their main sports asset, FC Dnipro, funding for these teams eventually became unstable, and some ceased to exist. Kolomoisky himself denies any financial ties to these teams. In 2017, after protracted legal proceedings over unpaid salaries to players, coaches, and staff, as well as debts to the contractors who built Dnipro Arena, FC Dnipro declared bankruptcy. Ironically, the club's funding lapsed at the moment of its greatest success during Ukraine's independence—the final of Europe's second-most prestigious competition, the Europa League.
Parallel to the bankruptcy, a new club called "SK Dnipro-1" emerged in Dnipro. Although Kolomoisky denied any connection to the new club (particularly to avoid potential new sanctions or fines), a number of indirect facts confirmed the oligarch's involvement in the new project. The new club was created using players, coaches, and staff from the bankrupt FC Dnipro, and the oligarch himself can often be seen in the stands at SK Dnipro-1 matches.
Regarding Kolomoisky's political "sports" ambitions, it's worth noting that in 2010, Kolomoisky served as vice president of the Football Federation of Ukraine (FFU), which was then headed by Hryhoriy Surkis. In 2015, Kolomoisky made an unsuccessful attempt to become president of the Football Federation of Ukraine.
Besides football, Kolomoisky's Privat Group and its partners are linked to funding individual hockey teams and seven professional basketball clubs. This has been confirmed by Mykhailo Brodsky, President of the Ukrainian Basketball Federation. However, there are no official documents or data to support this. Interestingly, Igor Kolomoisky's son, Hryhoriy, plays for one of the clubs associated with his father, BC Dnipro. In 2015, these clubs even attempted to spin off into a separate so-called "Privat League."
RELIGION
Along with his business partner, Gennady Bogolyubov, Kolomoisky is an active member of Dnipro's Jewish community. "These are powerful people, and for them, Jewishness comes first," commented Dnipropetrovsk Chief Rabbi Shmuel Kaminetsky. He added that the businessmen not only donate money but also personally embrace Judaism, praying and observing religious traditions.
Together with Bogolyubov, the oligarchs opened the world's largest Jewish community complex, Menorah, in Dnipro in 2012. The complex's total area is 50 square meters.
At various times, Kolomoisky was the president of the United Jewish Community of Ukraine, the president of the European Jewish Council, and similar religious associations.
In 2020, US law enforcement accused Kolomoisky of laundering hundreds of millions of dollars. Mordechai Korfa and Uriel Labera, who came to Ukraine as volunteers for a Jewish religious humanitarian mission, were identified as his partners in laundering money.
Igor Kolomoisky. Foreign Assets
Igor Kolomoisky, who is wanted by US authorities, and his business partner, Gennady Bogolyubov, are known to own a number of companies in the United States, including ferroalloy, steel, tire, and real estate companies. Kolomoisky and Bogolyubov have also invested significantly in private estates in Switzerland, France, Israel, and the UK.
Oligarchs' activities during a full-scale war
Igor Kolomoisky himself and the Privat Group, which he owns together with Gennady Bogolyubov, played a significant role in the defense of Ukraine in 2014. Kolomoisky was the governor of the Dnipropetrovsk region and, unlike Akhmetov, used his status and power to defend the region from pro-Russian separatists.
However, in 2022, Kolomoisky and Bogolyubov have been very quiet. Back in March, Kolomoisky refused to say whether he had in any way helped Ukraine win. Borys Filatov, the mayor of Dnipro and a former business partner, complained of zero support from the oligarch.
Kolomoisky was reportedly physically located in Ukraine, traveling between Dnipro and Bukovel. Bogolyubov, accompanied by lawyers, visited the National Anti-Corruption Bureau (NABU) in October, likely regarding cases involving PrivatBank or Ukrnafta. They appear more interested in attacking the government in the courts, attempting to recover some of the nationalized PrivatBank assets owned by Kolomoisky and Bogolyubov.
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