Glib Zagoriy (pictured) has secured total control over the Borshahiv Chemical and Pharmaceutical Plant. Last Thursday, the Kyiv City Council sold the 1,11 hectares of land under the plant to pharmacists without debate for UAH 20,98 million. Following the controversial privatization of municipal shares in the plant at a discounted price, the land remained the city's only lever of influence over the strategic enterprise. But Klitschko decided to give it up. Notably, Zagoriy's pharmaceutical competitor, Filya Zhebrovska of Farmak, lost her right to purchase the land under her plant at the same plenary session.
As KV has learned, on March 4, 2021, Kyiv City Council members approved draft resolution No. 08/231-2575, dated October 13, 2020, on the sale of a land plot at 17 Myra Street in Kyiv's Svyatoshinsky District to the Borshahiv Chemical and Pharmaceutical Plant Scientific and Production Center*. The city council members adopted this resolution virtually without discussion. The draft was supported by 75 votes in favor.
According to the document, the public joint-stock company is authorized to purchase a 1,11-hectare land plot (cadastral number 8000000000:75:194:0046) for the maintenance and repair of engineering, transport, energy, communications, and road infrastructure facilities, as well as the operation and maintenance of existing buildings and structures. The explanatory note states that the land plot being sold contains buildings and structures with a total area of 716,8 square meters, which have belonged to the Borshahiv Chemical and Pharmaceutical Plant since 2014.
The land plot price was determined based on an expert monetary valuation report by the Kyiv Institute of Land Relations on September 10, 2020, and is UAH 20,984 million. It was revealed that the public joint-stock company had already paid an advance payment of UAH 1,978 million for the plot under contract No. 2 dated February 2, 2017. Borshahiv Chemical and Pharmaceutical Plant will be able to pay the remaining amount in installments: 50% within 30 days of the transaction's completion and 50% in equal monthly installments over the course of a year after the notarization of the purchase and sale agreement.
The purchase and sale agreement must be prepared by the Department of Land Resources of the Kyiv City State Administration and signed by the parties within two months.
It's worth noting that on February 23, 2021, the Kyiv City Council authorized JSC Farmak to purchase 6,3 hectares of land from the Kyiv municipality for UAH 216,9 million, where the Kyiv Pharmaceutical Plant is located. This decision (the land price is almost twice that of the Borshahiv Chemical Pharmaceutical Plant – KV) was extremely difficult to reach: it required two City Council meetings and hours of debate and wrangling. Much attention was also paid to the environmental impact of pharmaceutical production.
Why everything went so smoothly and simply in the case of PJSC "BHPZ" remains anyone's guess. Incidentally, Kyiv Mayor Vitali Klitschko vetoed the decision to sell the land to JSC "Farmak," and the city council members approved it.
As a reminder, in 2018, the Kyiv City State Administration's Department of Land Resources twice attempted to sell 1,11 hectares of land at 17 Mira Street to PJSC Scientific and Production Center "BHPZ": for UAH 18,99 million (valuation as of May 30, 2017) and for UAH 19,11 million (valuation as of June 12, 2018).
The first corresponding draft resolution No. 08/231-1034, dated March 28, 2018, was sent back for revision at the City Council meeting on June 6, 2018. The second draft resolution No. 08/231-2201/PR, dated July 9, 2018, was rejected by Kyiv City Council deputies in the fall of 2018.
The initiator of the rejection of this draft resolution was Oleh Petrovets, a member of the 8th Kyiv City Council (Solidarity faction). He stated at the time that the sale was absolutely unprofitable for the city—more could be made from rent, and that PJSC "NPC BHPZ" was simply trying to defraud Kyiv residents. At the same time, Oleksandr Tkachenko, head of the Land Lease and City Land Cadastre Department of the Kyiv City State Administration's Land Resources Department, noted that some buildings on the land plot in question were located "without registered ownership."
According to the YouControl analytics system, PJSC "Borshahiv Chemical-Pharmaceutical Plant" was registered in 1997 at 17 Myra Street, Kyiv. The authorized capital is UAH 19,03 million. Mykhailo Pasechnik has been the director of the plant since February 13, 2021.
The plant's ultimate beneficial owners are Gleb Zagoriy, Evgeniy Sova, Tatyana Artemenko, Nikolay Bezpalko, and Oleg Goloborodko. Large shareholder interests (>5%) include Darnitsa Pharmaceutical Firm (31,55%), Beldor Group S.A. (21,26%), Lenik Group S.A. (20,31%), all registered in the Virgin Islands, and Aleter Limited, registered in Cyprus (8,46%).
The ultimate beneficial owner of Darnitsa Pharmaceutical Company** is Glib Zagoriy, a multimillionaire, Doctor of Pharmaceutical Sciences, and member of the Verkhovna Rada of the 8th convocation (2014-2019, Petro Poroshenko Bloc faction). He is often referred to as the "king of Ukraine's pharmaceutical mafia."
It was through PJSC FF Darnitsa that Gleb Zagoriy managed to obtain a significant stake in PJSC Scientific and Production Center Borshahivsky Chemical and Pharmaceutical Plant, purchasing 29,9% of the plant's shares from the Kyiv City State Administration's Department of Municipal Property.
The Kyiv City Council decided to privatize the municipal stake in PJSC "BHPZ Scientific and Production Center" in September 2011 (Kyiv City Council Resolution No. 40/6256 of September 22, 2011). However, prior to this, in February 2011, the Donetsk-based financial company "Titan" valued a 29,9488% stake in the Borshahiv Chemical and Pharmaceutical Plant at 479 million hryvnias.
On March 20, 2015, the Kyiv City State Administration sold its municipal stake (29,9%) in the Borshahiv Chemical and Pharmaceutical Plant to Darnitsa Pharmaceutical Company, a private joint-stock company, for just UAH 171,844 million. The auction had been canceled several times prior to this. Several Kyiv City Council members noted at the time that they intended to sell the shares for five times less than their market price, which appears to have ultimately happened.
Since the spring of 2018, courts of various instances have been considering case No. 910/3233/18 regarding the possible illegal sale by Gleb Zagoriy of a stake in the PJSC Scientific and Production Center Borshahivsky Chemical and Pharmaceutical Plant, previously owned by the capital's community.
Case No. 910/3233/18 was opened by the Kyiv Commercial Court on April 2, 2018. PJSC "SPC "Borshahivskyi Chemical and Pharmaceutical Plant" filed a claim to invalidate exchange trades and exchange contract No. 185321. The claim was filed against PJSC "Farming Company "Darnitsa", the Department of Municipal Property of the Kyiv City State Administration, and the Kyiv City Council.
On May 2, 2018, Darnitsa FF PJSC filed a counterclaim, which, in accordance with the ruling of the Commercial Court dated May 10, 2018, was combined with the original claim of the Borshahiv Chemical and Pharmaceutical Plant into one court case.
In August 2020, the Northern Commercial Court of Appeal fully upheld the plant's claim and rejected the counterclaim of Darnitsa Pharmaceutical Firm PJSC.
However, in October 2020, the Supreme Court finally confirmed the ownership of the pharmaceutical company Darnitsa to the shares of the Borshahiv Chemical and Pharmaceutical Plant and the legality of their acquisition.
The Borshahiv Chemical and Pharmaceutical Plant, a public joint-stock company, produces over 100 types of pharmaceuticals, veterinary products, dietary supplements, and disinfectants. The plant's capacity allows it to produce 200 million tablets annually. The plant sells its products not only in Ukraine but also in 23 countries across Europe and Asia.
Petro Olenych has headed the Kyiv City State Administration's Department of Land Resources since July 27, 2018. Since December 31, 2020, the department's work has been directed and overseen by the First Deputy Head of the Kyiv City State Administration. This position is held by Mykola Povoroznyk, who was suspended from his duties in April 2020 following an investigation into a case involving bribery in exchange for the issuance of state funds to a developer.
Following the 2020 local elections, seven factions were formed in the Kyiv City Council of the 9th convocation. The European Solidarity Party faction became the largest, with 31 members.
*PAT “Research and Development Center “Borshchagivsky Chemical and Pharmaceutical Plant” (EDRPOU code: 23518596)
**PJSC “Pharmaceutical Firm “Darnitsa” (EDRPOU code: 00481212)
Photo: collage by KV
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