Igor Palytsia: An accomplice in Kolomoisky's oil scams. Part 1
Ukraine traditionally hides behind the facade of patriotism and professionalism, scumbags and corrupt officials. One of them is Volyn Governor Ihor Palytsia, who is trying hard to keep his past machinations as head of Ukrnafta or as governor of Odesa, which cost the state billions of hryvnias. Billions that flowed into the accounts of the already super-rich owners of the Privat Group, whom Palytsia continues to serve faithfully to this day. For this, he has once again become a victim of the war between the oligarchs Kolomoisky and Poroshenko.
However, Igor Palytsia himself has long been living on more than just his salary. His family lives in Switzerland, and he has a net worth estimated at $102 million—not counting his stakes in companies he stubbornly denies involvement in.
Igor Palitsa. Circus and oil refinery
Igor Petrovich Palitsa was born on December 10, 1972, in Lutsk. He has never spoken about his parents, and there are good reasons for that. Skelet.Org, too many uncomfortable questions arise when unnecessary details appear in the polished biography of an “effective oil manager.”
According to the official biography of the current "amber governor," in 1989 he enrolled in the history department of Lutsk Pedagogical University (now Volyn National University)—an excellent choice for someone who hadn't excelled in other fields. Having no physical disabilities, Igor Palytsia nevertheless successfully dodged military service (the pedagogical university, of course, didn't have a military department), and one can only guess who helped him do so. And in 1993, while still a student at the institute (or simply while enrolled there), he "began to develop Ukraine's oil business" (from his biography), allegedly opening a Ukrainian-Latvian joint venture, "Maveks-L," with his classmates. He became the director of this enterprise, which sold gasoline.
Well, let's delve into the details. First, in the 90s, Maveks-L was a small chain of gas stations selling Russian gasoline, which was shipped to Ukraine through a cunning scheme involving Latvian intermediary firms. However, they were "Latvian" only in their place of registration—and Latvia has provided a haven for all manner of swindlers, including international mafiosi. Second, the gas station business in the 90s was in the hands of either organized crime groups (gas stations were a favorite target for the "brothers") or well-connected local officials, and running it without their protection or direct involvement was impossible. Third, Maveks-L was practically a family business: when Igor Petrovich transferred to Ukrnafta in 2003, his father assumed his director's position at Maveks-L. Sources Skelet.Org They claim that Papa Palytsa wasn't some Pound at all, but the real founder and owner of the company. And fourthly, it was Petro Palytsa who signed the contracts for the sale of Mavex-L gas stations to the state-owned company Ukrnafta, which was part of Privat's grand scam. As a reminder, in 2005, Ukrnafta, controlled by Privat and headed by Igor Palytsa, carried out a scam involving the purchase (with state funds) of 68 gas stations at vastly inflated prices. Among them were 12 Mavex-L gas stations, which Palytsa the elder "sold" to Palytsa the younger, pocketing 90 million hryvnias.
But how did the Palytsya family end up among Kolomoisky's associates? This is also a very interesting and puzzling story! In 1997, according to Ihor Palytsya's biography, he began a joint business with "English businessman Michael Watford," the owner of the Watford Group. Under this arrangement, Ihor Palytsya, a qualified historian, became the commercial director and board member of the Nadvirna Oil Refinery, which was being prepared for privatization and transformed into Naftokhimik Prykarpattia OJSC. It was obvious that Mr. Watford and the Palytsya family had a very close relationship at the time. And back then, no one was yet publicizing that British businessman Michael Watford was previously a Soviet citizen, Mikhail Tolstosheya, a former employee of the Soyuzgoscirk, convicted of fraud with Vneshposyltorg checks, and who had subsequently emigrated abroad. Abroad, Mykhailo Tolstoshya acquired British citizenship, got married, and changed his surname. Then the former circus performer was drawn back to his homeland to pursue business interests in oil and privatization schemes. Through these schemes, he came across the Volyn "fuel handlers" Igor and Petro Palits. They had established connections and a thorough knowledge of the region's ins and outs, and Michael Watford had the image of a "British investor." By 1999, he had already acquired a 12% stake in Naftokhimik Prykarpattya OJSC.
Michael Watford, aka Mikhail Tolstosheya
However, in the late 90s, Igor Kolomoisky’s Privat group entered the region and Gennady Bogolyubov, which also had an interest in the local refineries (Drohobychiv's "Galichina" and Nadvirna). Privat acted, as always, brazenly, aggressively, with its usual "chutzpah"—and while Michael Watford and the Palytsy had been courting the Nadvirna refinery for several years, Kolomoisky needed only a few months to break in. Moreover, the Palytsy father and son soon sided with Kolomoisky—either they defected to him, sensing a richer and more influential "partner," or they were seduced and bought by him. The first option is more realistic, because Kolomoisky usually disliked the people he bought, throwing them away like condoms. But he, on the contrary, elevated Ihor Palytsy and made him one of his trusted "clerks."
Igor Kolomoisky. Who doesn't know him?!
So, in 1999, the Watford Group and Privat (50% each) established Watford Petroleum Ukraine Holdings Limited (a Cyprus offshore company). Its next step was a scam to "grab" a 30% stake in Naftokhimik Prykarpattya OJSC—from among the shares that remained in state ownership. The scam was successful thanks to the corrupt official Vladimir Kuznetsov (a family friend of Valeriy Pustovoitenko), who headed the State Investment Committee of Ukraine in the second half of the 90s. Through a cunning scheme, Kuznetsov secured the transfer of 30% of Naftokhimik Prykarpattya OJSC shares to Watford Petroleum Ukraine Holdings Limited—as a reward for the "investment." The contract was so cleverly crafted that these shares soon became the property of the offshore company.
Chronicle of the "privatization" of JSC "Naftekhimik Prykarpattia"
During this scheme, Igor Palytsia rose through the ranks to become Chairman of the Board of Naftokhimik Prykarpattia OJSC. However, he owed this less to his role in the state robbery than to his assistance to Privat in the next scam: ousting Michael Watford as a co-owner of Naftokhimik Prykarpattia OJSC. This was accomplished through brazen fraud, in the style of Kolomoisky. Initially, $700 million was funneled back and forth through Watford Petroleum bank accounts, a scheme that left Misha Tolstoshya in debt to his native British tax office of approximately £100 million. He didn't have that kind of money, and the harsh British justice system seized his assets. However, it turned out that the shares of JSC Neftekhimik were mysteriously transferred from the joint venture Watford Petroleum—that is, they weren't seized—and ended up in the sole possession of Privat. Moreover, it turned out that Watford Petroleum had managed to take out a loan from Privatbank, further exacerbating Michael Watford's situation. In short, despite all his attempts to regain his stake, he hopelessly lost the war against Kolomoisky, which had lasted several years. And it's clear that this scam could not have taken place without the participation of Ihor Palytsia, Chairman of the Board of JSC Neftekhimik.
Sergey Sheklanov
An interesting fact: another figure in that scam was Russian businessman Sergei Sheklanov (now a co-owner of BTA-Kazan Bank and the father-in-law of one of Gazprombank's top managers), a long-standing and close, though little-known to the public, partner of Igor Kolomoisky.
It could even be said that Sheklanov is Kolomoisky's most reliable Russian business partner, a participant in many of his schemes. For example, between 2003 and 2005, Kolomoisky and Sheklanov "squeezed" the company "Teamtrend Limited" from Israeli citizen Moshe Shahar, becoming its co-owners. And in 2014, this company was the key to Kolomoisky's fraudulent scheme to siphon over $2,5 billion from PrivatBank abroad. This case is currently being heard by the English High Court, which on December 20, 2017, ordered the seizure of all of Ihor Kolomoisky's assets.
Ukrnafta under Privat's thumb
It's worth noting that Igor and Petr Palits played an even greater role in the story described above. Sources Skelet.Org It was reported that it was largely thanks to them that the Watford Group entered into a fatal alliance with Privat, and not with a group of businessmen who were late to the pie, including Peter Dyminsky, Sergei Lagur, Stepan Ivakhiv and the late Igor Yeremeyev, who later merged into the Continuum and WOG groups. They managed to gain control of the Drohobych refinery "Galichina," where Privat received only a minority stake, but lost out on Naftokhimik Prykarpattia OJSC, largely due to Igor Palytsia and his father, Petro Palytsia. Since then, WOG and Privat have become fierce competitors in the Ukrainian oil market, and their war has extended to Ukrnafta and Naftogaz, which they sought to control. The war continues to this day: since 2015, Kolomoisky's people have been trying to get their hands on the inheritance of Yeremeyev, who died suddenly (in order to infiltrate WOG), and since 2014, Kolomoisky has been in direct conflict (even insults at the conference table) with the deputy chairman of the board of Naftogaz. Andrey Pasishnik, placed there to protect the interests of WOG.
But all these years, Kolomoisky has maintained a secure grip on Ukrnafta, despite owning only 42% of the company (50% plus one share is owned by the state-owned Naftogaz). This became possible in 2003, when, through PrivatBank's efforts, Ihor Palytsia was appointed head of Ukrnafta's board. He simply made decisions in Kolomoisky's interests, even if this meant actually breaking the law or engaging in corrupt practices. However, Ihor Petrovich's participation in these matters was not without pay; the aforementioned gas station deal alone is worth mentioning!
Igor Palitsa, 2005
Let's remember: after the 2005 gasoline crisis, largely provoked by Kolomoisky, the government allocated 2 billion hryvnias to expand the network of state-owned gas stations operated by Ukrnafta. But Ukrnafta was run by Ihor Palytsia, a Kolomoisky man! And together, they hatched a cynical and brazen scheme: buying up existing gas stations at vastly inflated prices. First, they sold some of their own gas stations to Ukrnafta: Palytsia sold 12 stations belonging to his father's Mavex-L, and Kolomoisky sold dozens of stations belonging to PrivatBank subsidiaries. Moreover, they sold off the oldest, most run-down stations, or those located in unpopular locations.
The most corrupt deal was the resale of gas stations owned by Avias-Plus, a company directly linked to PrivatBank's Avias. Initially, Avias-Plus sold 12 gas stations directly to Ukrnafta for 81,5 million hryvnias. Avias-Plus then sold another 12 gas stations to an intermediary company, Strong, for 7 million hryvnias, which then resold them to Ukrnafta for 79 million hryvnias! Several gas stations were sold to Ukrnafta for a profit of 18 million hryvnias through Seven-Seventy-Petroleum, a company owned by Mykhailo Kiperman, another Kolomoisky associate who was also a member of Ukrnafta's supervisory board at the time. Let us emphasize again: all of this was purchased by Ukrnafta, under the leadership of Ihor Palytsia, using state funds!
Igor Palitsa and Mikhail Kiperman
The scale of Igor Palytsia's corruption while chairman of Ukranafta's board of directors was unlikely to be known even to law enforcement agencies, as criminal cases were rarely initiated for all the incidents, and many of the journalistic investigations have now been forgotten. Palytsia's scope for abuse was vast, however, as Ukranafta also produced oil (91% of Ukraine's total production) and gas (17%), which automatically fell under Privat's control.
So, in 2007,Ukrainian Truth" discovered that between 2005 and 2006, it held several auctions to sell extracted gas to commercial entities (2,3 billion cubic meters), the winners of which were firms associated with Privat. For example, Energoalyans LLC (it purchased 1,2 billion cubic meters), which then supplied gas to Dniproazot, owned by the Privat Group. Or Indeko LLC, which supplied gas to Privat's Dniprovskyi Metallurgical Plant. Moreover, the price of the gas they purchased from Ukrnafta was only $60-70 (per 1000 cubic meters), while at that time Ukraine was already purchasing Russian gas for $108. But the cheap Ukrainian gas was sold to Kolomoisky, and the expensive Russian gas was supplied to the population, who were subject to inflated tariffs.
By the end of 2005, the parliamentary opposition had already begun talking about the machinations at Ukrnafta, and Ihor Palytsia himself apparently understood that sooner or later his dealings with Kolomoisky would become the subject of an investigation. Therefore, in 2006, he attempted to secure a parliamentary mandate and immunity for the first time, buying himself (cheaply) the sixth seat in the Village Party. Unfortunately, the party received only 0,36% of the vote. In 2007, when several criminal cases were opened in connection with the gas station scandal, Ihor Petrovich managed to jump from Naftogaz to the Rada on the NU-NS party list (No. 67), where he was placed by the bloc's coordinator. Yuriy LutsenkoThis raised puzzled questions from the public, to which Lutsenko, unabashed, declared the following: Igor Palytsia, well-versed in shady schemes, would fight corruption and eliminate schemes in the oil and gas industry! As we can see, the future Minister of Internal Affairs and Prosecutor General of Ukraine was already moonlighting as a lobbyist for corrupt officials.
Sergey Varis, for Skelet.Org
CONTINUED: Igor Palytsia: An accomplice in Kolomoisky's oil scams. Part 2
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