Konstantin Grigorishin, Distinguished Oligarch of Ukraine and Russia
Recently, the long-forgotten name of the Russian-Ukrainian oligarch Konstantin Ivanovich Grigorishin has begun to surface in the Ukrainian media. Tellingly, his name has been recalled either by Prime Minister Arseniy Yatsenyuk, who claims Grigorishin is an FSB agent. Or by members of his team, including Arsen Avakov (read more about him in the article " Arsen Avakov: The Criminal Past of the Minister of Internal Affairs "), who accuses the oligarch of participating in opaque tenders. In January of this year alone, Konstantin Ivanovich has been targeted by the State Fiscal Service, as we've already reported , the Security Service of Ukraine (SBU), the Ministry of Internal Affairs (represented by its head), and the Anti-Corruption Bureau.
Several criminal cases have allegedly been opened against Konstantin Grigorishin. And the aforementioned Arsen Avakov accuses journalist and MP Serhiy Leshchenko of receiving money from Grigorishin's cash register. Let's recall who this oligarch is and try to understand why the prime minister's team hates him so much.
Konstantin Grigorishin, a veteran of the oligarchic movement
Until the 1990s, Konstantin Ivanovich Grigorishin was nothing special. He hails from Zaporizhzhia, Ukraine. In 1987, he graduated from one of the most prestigious universities in the USSR, the Moscow Institute of Physics and Technology (MIPT), with a degree in engineering and physics. In 1991, he completed his postgraduate studies at MIPT and earned a PhD in physics and mathematics. He worked at the Institute of Spectroscopy of the USSR Academy of Sciences. In other words, he built a career as an ordinary desk scientist at one of hundreds of research institutes across the country. He was not known for his excessive enthusiasm for communist ideology or connections to the KGB. He went into business sometime around 1994-1995. Initially, he sold computers at the Tushino Market in Moscow, but later turned his attention to metallurgy. At that time, the technological, trade, and raw materials supply chains between Ukrainian and Russian companies were severed, and many enterprising individuals profited from this.
It's worth noting that many of them have already died, often not by natural causes, and those who survived have retired. Grigorishin is perhaps the last of the "heavyweights" of those years still alive and in business. But let's return to the 1990s. So, in 1994 or 1995, Konstantin Grigorishin, together with his partners Yevgeny Ageyevetsky and Alexander Pashonin, opened the company "Central Wholesale Metal Base" in Moscow. Simultaneously, in Zaporizhzhia, the future oligarch's former classmates, Andrey Nemzer, Igor Boyko, and Leonid Pivovarov, opened the private enterprise "Zaporizhzhia Metal," which was linked to the giant of the Ukrainian economy, the Zaporizhstal association, through Lidiya Arsiriy, the association's deputy director for sales and foreign economic activity. And the business took off. The partners began with barter schemes—metal in exchange for consumer goods, food, raw materials, fuel, and other essentials. But they later expanded their operations. According to Konstantin Ivanovich himself, they ran currency through banks, taking a 50-70% kickback, and then began buying up corporate debt.
Konstantin Grigorishin, Distinguished Oligarch of Ukraine and Russia
Konstantin Grigorishin, the "Father" of Offshore Schemes
Grigorishin is believed to have devised a number of business schemes aimed at both acquiring and managing companies, allowing for tax "optimization." These schemes would later be dubbed "offshore," and to this day, they are used by all, or almost all, serious market players. Konstantin Grigorishin can safely be called a pioneer of these schemes. Specifically, in 1996-97, he created several offshore companies in Cyprus and the Virgin Islands. Through them, the businessman began acquiring Ukrainian enterprises: energy companies, the Zaporizhzhia and Stakhanov Ferroalloy Plants, and Dniprospetsstal. Although the oligarch himself says he has no interest in politics, it's clear that such schemes cannot work without support from the very top. At a minimum, a double taxation agreement with Cyprus is needed. The Soviet Union signed such an agreement, and Ukraine refused to denounce it. Moreover, it was in 1997 that the finance and foreign ministries began negotiations to conclude a new agreement between our country and the offshore island. So, political protection was a factor, and the best protection at that time was Prime Minister Pavlo Lazarenko.
Grigorishin is thoughtful
Connection with Lazarenko
In the late 90s, Grigorishin became a business partner of Petro Kirichenko, a notorious associate of Pavel Ivanovych Lazarenko. It was then that he gained control of a third of Ukraine's energy distribution companies. At the same time, he acquired another lucrative business – the removal and disposal of nuclear waste from Ukrainian nuclear power plants. Clearly, he couldn't have access to such strategic facilities without the highest protection. During Lazarenko and Grigorishin's collaboration, the latter acquired approximately twenty enterprises, including several regional power companies. But their mutually beneficial partnership didn't last long. In 1998, Lazarenko was removed from power, and in 1999, he was arrested in the United States. That same year, Kirichenko was also arrested, effectively selling out his boss. This situation played into Konstantin Ivanovich's hands – his partners were arrested, and he could confidently take over the business. It was only many years later that Pyotr Kirichenko realized that Grigorishin had simply robbed him and demanded that he return the $42,5 million he had invested.
After all, in almost every offshore company owned by Konstantin Ivanovich, his partner Kirichenko had a 51% stake. This included both his money and Lazarenko's.
During negotiations with the oligarch, this sum was reduced to $14,5 million, which was paid. Better than nothing. Apparently, Grigorishin thought he had closed Lazarenko's profile in his biography and paid off Petro Kirichenko. But in 2010, Kirichenko received information that Grigorishin's assets, purchased with Lazarenko's money, were already worth $300 million. Pavel Ivanovich's advisor, feeling deceived again, went to court in the US. His case is currently being prepared for consideration by the Judicial Arbitration and Mediation Service. If Kirichenko wins the arbitration, he has every chance of winning the case in a full-fledged court. But back then, Konstantin Grigorishin could hardly have imagined the situation would take such a turn. He had no time to think about it; he was busily searching for a new protector and soon found one in the so-called "Kyiv group," which was gaining strength at the time.
Pavel Lazarenko and Petr Kirichenko
Konstantin Grigorishin and the "football lawyers"
So, while Lazarenko and Kirichenko remained under the watchful eye of the American judiciary, Grigorishin was forced to seek new patrons and partners. These were found in Viktor Medvedchuk , the Surkis brothers , and the SDPU(o) party. In fact, they had begun to develop a close relationship back in 1998, when Lazarenko left government to focus on his Hromada party. But their ties finally came together in 1999. In an interview with Ukrainian media, Grigorishin revealed that he gave the Surkis brothers 50% of his profits for protection.
As a result of their fruitful collaboration in 2001, Grigorishin controlled five regional power companies and acquired stakes in 11 others, as well as acquiring assets in metallurgy and mechanical engineering. He also acquired a 20% stake in the Dynamo Kyiv football club. Shares in key regional power companies were distributed among Grigorishin, the Surkis brothers, and Ihor Kolomoisky. However, in 2001, conflicts arose between the partners, and they decided to part ways. Incidentally, this conflict is considered one of the most protracted oligarchic wars in Ukraine, which officially ended only in 2010… with an exchange of shares in regional power companies.
However, at the beginning of the 2000s, conflicts continued – the parliamentary elections of 2002 demonstrated the insatiable appetite of the SDPU(o).
Grigorishin was asked to pay $50 million for the election campaign. Apparently, to save money? Konstantin Petrovich is taking on the support. Mikhail Brodsky and his Yabloko party, but Yabloko failed to gain seats in parliament, meaning the money was wasted. A conflict with the Surkis brothers led to him losing control of the regional power company and the Tavrichesky Mining and Processing Plant after the elections, and selling the Zaporizhzhia Ferroalloy Plant and then Dneprospetsstal. And on the night of October 12, 2002, he was violently detained near the Egoist restaurant by officers of the Sokol special forces unit of the Ministry of Internal Affairs. A pistol was found in Grigorishin's pocket, and he was taken in handcuffs to the Pechersk district police station. The case was later closed, but he was forced to leave Ukraine.
Konstantin Grigorishin was one of the main sponsors of the first Maidan.
During the 2004 presidential election, Konstantin Grigorishin sponsored the Orange Revolution. During his legal battle with Igor Kolomoisky over allegedly unsold stakes in five regional power companies, Kolomoisky testified in a London court that Grigorishin had contributed $12 million to the Orange Revolution, becoming, after the late Boris Berezovsky, the second-largest sponsor of President Viktor Yushchenko's victory. However, disillusionment with Yushchenko set in quickly. There were too many people around the new president eager to get their "well-deserved" piece of the pie. Nevertheless, Konstantin Grigorishin recovered his losses and even gained a few things. The stumbling block was Kharkiv's Turboatom.
By government decision, the Turboatom plant was added to the list of enterprises slated for privatization that year. The State Property Fund, represented by its chairperson, socialist Valentyna Semenyuk , was categorically opposed. Everything then followed the same pattern: appointing a new director, installing him in the "job," removing him with the help of security forces, and appointing yet another new director, whom communist Alla Aleksandrovskaya tried to install. (By this time, Kostyantyn Ivanovich had already become the main sponsor of the Communist Party of Ukraine.) Ivan Petrenko, secretary of the Interdepartmental Commission of the Cabinet of Ministers of Ukraine on Combating Illegal Takeovers and Enterprise Takeovers, a former communist, and a member of the State Commission on Securities and the Stock Market, actively participated in this process.
Grigorishin later insisted that he had never resorted to such crude methods, and that everything that happened around the plant was a gross provocation. Yes, he wanted to participate in the tender and was not opposed to buying it, even discussing it with Prime Minister Tymoshenko, who promised him an open and fair competition. But it's clear that if Yulia said "yes," the president would automatically say "no." So he backed down and subsequently ran his considerable business from Moscow. This was especially true since in December 2008, the SBU again banned Konstantin Ivanovich Grigorishin from entering Ukraine for five years. This decision was challenged in court and overturned in June 2009. Speaking of courts, Konstantin Ivanovich is a big fan of litigation. In terms of the number of lawsuits, he is probably the number one Ukrainian oligarch.
Courts and corporate raids
Grigorishin's business history is a near-constant series of conflicts and lawsuits. Konstantin Ivanovich sued Surkis for the right to buy out a 98% stake in Dynamo Kyiv, which he allegedly held. In 2006, he fought Igor Kolomoisky in a London court over sold and unsold stakes in five regional power companies. He also sued Volodymyr Lukyanenko, the former director of the Frunze Scientific and Production Association in Sumy, and Vadym Novynsky, who was behind the latter (read more about Novynsky in the article " Vadim Novynsky: From Raider to Peacemaker "). They accused Konstantin Ivanovich of siphoning company funds to Russia. In 2002, he sued the Metallurgy concern and lost, and his accounts at Credit Leon Ukraine bank were frozen. He tried to obtain a 61% stake in UNTK, the company that controls the Inter TV channel's license, through the courts. He had a conflict with Akhmetov over land plots in Simeiz for several years, and he also sued him over Donetskoblenergo, which he naturally lost. He used corporate raiding to seize the administrative buildings of Chernihiv, Prikapatye, and Poltava, but without much success – he was effectively opposed in these seizures by Kolomoisky. He was also linked to corporate raids on the Kharkiv companies Turboatom and Electrotyazhmazh in 2007, which were accompanied by endless legal proceedings. At that time, he was actively assisted by Sergei Pashinsky, as we recently reported.
Vadim Novinsky and Konstantin Grigorishin
Konstantin Grigorishin during the Yanukovych era
During Viktor Yanukovych's presidency, Kostyantyn Grigorishin, by his own admission, was involved in... sports, claiming that business development was impossible in those years. He also stopped funding the Communist faction in the Verkhovna Rada—under Viktor Yanukovych, the Communists "supposedly" became self-financing. However, he contradicts himself here, as in the same interview, Kostyantyn Ivanovich claims to have financed Symonenko as a defense against Yanukovych. Regardless, Grigorishin failed to find common ground with the "Donetsk people." Overall, the relationship between Kostyantyn Grigorishin and the then government could be described as "wary neutrality." In 2010, he purchased the Yubileyny stadium in Sumy, where his football team, FC Sumy, plays (hence his involvement in sports). Between 2010 and 2012, he acquired energy assets. He occasionally criticized Akhmetov and DTEK for their lack of professionalism. But overall, he wasn't involved in major scandals, didn't meddle much in politics, and didn't appear in the media much. However, in 2013, he began to be quietly "pinched." In September, the Frunze Scientific and Production Association of Sumy was nearly taken from him, in favor of Vadim Novinsky, as we wrote above. That same year, he lost the privatization of 45% of Krymenergo shares to Rinat Akhmetov. But he was largely forgotten until the Euromaidan and subsequent events brought his close friends to the surface.
Yes, it's worth noting that all of Grigorishin's actions were accompanied by surprisingly unprofessional PR. Compared to his opponents, he always looked like a scapegoat. Or, better yet, a "poor man." That is, even if he was 100% right, the media portrayed him quite differently. This PR gap was only addressed when he disappeared from the media altogether.
Grigorishin giggles
Poroshenko: Grigorishin's new "roof"?
They have known Petro Poroshenko since at least the late 90s. It seems their business relationship is one of complete harmony and mutual understanding. They once jointly tried to wrest the Inter channel from Valeriy Khoroshkovsky and Dmytro Firtash through the courts. Before that, they had pitched in to buy Inter from the dying Igor Pluzhnikov. In 2005, they fought shoulder to shoulder against Yulia Tymoshenko for the Nikopol Ferroalloy Plant. In 2007, Poroshenko bought part of the Sevmorzavod enterprise in Sevastopol from Kostiantyn Grigorishin. They jointly owned real estate in Kyiv. Besides the president, Kostiantyn Ivanovich has plenty of his own people in today's political establishment. He effectively supports several BPP MPs, and Energy and Coal Industry Minister Volodymyr Demchyshyn is considered his man in the government . According to journalist Artem Shevchenko, he is the main "fixer" in the energy sector. His people head state-owned energy companies, such as Ukrtransnafta, which is run by his protégé, Yuriy Miroshnik, and Ukrenergo, which is run by another of his protégés, Yuriy Kasich. Kasich was "promoted" from the position of head to deputy, with Vsevolod Kovalchuk, who also worked for Grigorishin but is actively trying to distance himself from him, becoming acting head. The "roof" of this scheme is Ihor Kononenko, Petro Poroshenko's "grey cardinal" in the Verkhovna Rada . This suggests that Grigorishin still has "direct access to his person." Only Arseniy Yatsenyuk's group is resisting this, but to no avail. See below.
However, the oligarch also has more than his share of enemies in power. For example, Arseniy Yatsenyuk publicly declared that Grigorishin was an FSB agent. And Interior Minister Avakov announced several criminal cases against Kostiantyn Ivanovich. He returned the favor, revealing that Yatsenyuk had been driven to Mezhyhirya to see Yanukovych in the trunk of a car. He also publicly claimed that the Interior Minister owed him 12 million hryvnias, which he allegedly took for the elections. Almost simultaneously, a scandal erupted between Kostiantyn Grigorishin and the head of the Presidential Administration, Borys Lozhkin , again over influence in the energy market. This occurred after the appointment of Borys Tsyganenko, Grigorishin's former manager, to the post of head of the National Commission for State Regulation of Energy and Public Utilities. Lozhkin realized he was losing his former influence. Immediately, the two sides exchanged informational blows. First, a rumor was launched claiming that Borys Lozhkin's diploma was fake. Then Sergei Leshchenko stated that Austrian law enforcement agencies were inquiring about the head of the Presidential Administration regarding tax payments. Lozhkin responded by claiming he had no problems with foreign law enforcement, and that Grigorishin had started this entire war to remove him from the post of head of the Presidential Administration and take it himself. This war continues, and we are likely to see some interesting revelations soon. For now, the president is trying hard to pretend he's above the fray.
Today, Konstantin Grigorishin feels comfortable and confident in Ukraine. In 2015, Forbes magazine ranked him sixth among the country's richest people, estimating his fortune at $920 million. His assets include 25% of Turboatom OJSC, Ukrrichflot PJSC, the Zaporizhzhia Transformator, Dniprospetsstal, Zaporizhzhia Ferroalloy Plant, the Frunze Scientific Production Association in Sumy, the Izmail Pulp and Paper Mill, various stakes in Vinnytsiaoblenergo, Cherkassyoblenergo, Chernihiv Oblast, Poltavaoblenergo, and Sumyoblenergo, among others, including such exotic properties as the Yasnogorod ostrich farm. Furthermore, his assets located in the LPR, namely Luhansk Energy Association LLC, are also active. As for the accusations against senior government officials, things never went beyond loud statements.
Denis Ivanov, for Skelet.Org
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