The protracted crisis has significantly damaged the reputation of the Ukrainian stock market, which, after the rise of 2006-2008, fell into a deep depression and has yet to recover.
Of course, one could blame the external economic and political situation for the flight of capital from stock exchanges and investment funds for a long time. It's easier and more profitable. However, the root of the "evil" runs much deeper. After all, the recession exposed the sins of investment, brokerage, and management companies, which defrauded hundreds and thousands of angry clients.
Moreover, among the swindlers were not only small, little-known “figures”, but also authoritative names who stood at the origins of that very stock market, and which they subsequently helped to extinguish.
One of such odious persons is a businessman Igor MazepaBack in 2004, he founded Concord Capital, one of Ukraine's largest investment companies, and became its manager. However, today, Concord's former achievements are only a memory, and Mazepa himself is increasingly embroiled in various unflattering affairs.
The fading reputation of this investment banker began back in 2008-2010. It was then that Igor Mazepa attempted to launch his own asset management business. In January 2007, he gathered around 10 journalists in a luxurious office in the Parus Business Center. Its windows overlooked half of Kyiv. Mazepa uncorked a bottle of expensive Scotch whiskey and solemnly announced that he was opening a management company, Concord Asset Management, with the goal of becoming a market leader.
Unfortunately, it didn't work out that way. Amid growing competition, Igor Mazepa's funds posted losses and struggled to return investors' funds, sparking a wave of negative reviews on numerous forums and blogs. The company's worst period was from January 2008 to January 2011, when investors in the Dostatok, Perspektiva, and Stability funds lost between 40% and 53%. This was despite the fact that during the same period, the Ukrainian Exchange and PFTS indices declined by only 3-5%.
This immediately raised a host of questions about Mazepa, since if a fund's decline exceeds the decline of stock market indices by tens of times, manipulation and withdrawal of funds are evident. The situation was worst of all at the "Oligarch" fund, whose activities even raised questions from the National Securities and Stock Market Commission. It was all prosaic: Mazepa and his managers abused shady transactions with so-called "junk securities," which led to the collapse of Oligarch's shares below par. Ultimately, Mazepa was supposed to pay investors using the fund's assets, but this never happened. Moreover, investors in the other three funds also did not receive their money on time. And there are reports that many of them are still waiting for compensation, but Concord is ignoring all their claims or issuing formulaic replies.
Igor Mazepa
However, the failure with Concord Asset Management did not dampen the disgraced investment banker's ardor, and in 2010 he bought another asset management company, Pioglobal Ukraine, the Ukrainian subsidiary of the bankrupt Russian investment group AntantaPioglobal.
The Russian shareholders who launched the project here with great fanfare suffered a fiasco and initially resold the asset management company to the Sokrat Group, owned by businessman Roman Sazonov. However, he, too, made a poor decision by investing one of the funds in the notorious Big Energy Bank, where a conflict between the owners had long been simmering. Due to the bank's liquidation, investors' funds were frozen, and the fund managed by Pioglobal Ukraine recorded a 35% loss, despite the Ukrainian Exchange index rising 188% during the fund's lifespan.
Igor Mazepa turned out to be the savior of Pioglobal Ukraine. He was aware of the company's problems and the money tied up in the troubled bank, but why he decided to make this deal remains unclear. At least, when commenting on the acquisition of the asset management company to the press, the investment banker expressed cautious optimism, explaining that the success of such a project would only be judged in 5-10 years.
But under Igor Mazepa's watchful guidance, Pioglobal Ukraine also failed to take off. On the contrary, the funds suffered colossal losses, and investors were outraged by yet another attempt at deception. For example, the Metallurgy/Mechanical Engineering Premium Fund lost 95% of its share value during its operation, while the Equity Premium Fund plummeted by 57%. And all this money came from hundreds of shareholders who trusted Mazepa's expertise.
Moreover, the situation was further complicated by the fact that the funds managed by Pioglobal Ukraine were closed-end. This investment model allows the management company to buy virtually any securities, even those that are worthless, and thus withdraw funds. When the fund closes, a loss is declared, and no investor can prove anything. Considering that Mazepa used a similar scheme in the funds managed by Concord Asset Management, the collapse of the second company was hardly surprising.
The final chord sounded in 2012. Igor Mazepa, who had assured those around him of the great prospects of joint investment, disposed of both companies at once, selling them to his business partner, Rostislav Sedlachik. The manager's official position was that he had become disillusioned with the business and saw no point in developing something that was unprofitable. However, another version exists: ConcordeCapital was burdened with multimillion-dollar loans, and Mazepa was trying to find any money he could in the falling market to repay them. For example, Megabank and Raiffeisenbank Aval were forced to sue the investment company and its owners for 85 million hryvnias under loan agreements signed back in 2007-2008. The litigation dragged on until 2014.
A series of failures in the investment business and their dire financial consequences prompted Mazepa to change his career. He then realized that the investment climate is fickle, but public administration is eternal. After Yanukovych's victory in the 2010 presidential election, Igor Mazepa began courting the "family's" favor. He earned it by successfully implementing numerous "projects" for the fugitive president's confidants. Moreover, his image as an investment banker, cultivated at great expense, greatly aided him in this endeavor.
The most interesting and high-profile project, which brought in significant profits for the Yanukovych family and Mazepa personally, was his orchestration of the sale of Boris Lozhkin's Ukrainian Media Holding to the young oligarch Kurchenko. This murky story, which has recently attracted the attention of European law enforcement and leading Ukrainian journalists, involves many unknowns. However, thanks to the revelations of Serhiy Leshchenko, it is becoming clear that Lozhkin's vastly overvalued asset was sold to the "family" using public funds issued by the state-owned Ukreximbank. This deal earned Mazepa the loyalty of the current Head of the Presidential Administration, Boris Lozhkin.
Boris Lozhkin opened the doors to the highest offices of the new, post-Maidan government for Mazepa. Here, the former investment banker had plenty of room to roam. He was entrusted with the role of "overseer" of a lucrative state asset—the Ukrspirt corporation. During Yanukovych's presidency, this enterprise had been the site of thriving illegal alcohol sales schemes, earning hundreds of millions for their organizers. Mazepa, as a trusted confidant of the new presidential administration's head, took charge of these schemes. The country was at war, but those in power continued to enrich themselves as before.
In addition to his informal oversight of Ukrspirt, Mazepa was appointed to the supervisory board of the state-owned Ukreximbank. He is extremely proud of this appointment and openly claims that Poroshenko himself offered him the position. Why would the president need a new Ukrexim supervisory board member with an unspecified mandate in the person of the odious Mazepa? Only one connection is obvious—the aforementioned sale of UMH. The fact is that Austrian prosecutors' interest in the deal and the corresponding criminal case emerged long before Leshchenko wrote about them. This suggests that Mazepa was appointed to the state bank to completely cover up the multimillion-dollar loan for the purchase of the media holding, which will never be repaid to the state.
Today, Mazepa is merely considered an investment banker, but in reality, he's one of the court "fixers" for the country's new leadership. He's entrusted with the dirty work, overseeing state-owned enterprises, and his people regularly fill the short bench of the ruling team. In exchange, Mazepa receives the patronage of his bosses and immunity from law enforcement prosecution. And, it must be said, he takes full advantage of this.
Recently, journalists from the 2+2 channel investigated the activities of the electronic payment operator TYME (QIWI), which belongs to Mazepa's company, OMP-13. TYME terminals have been operating successfully in the DPR-LPR territory throughout the armed conflict, effectively replacing the militants' cashless payment system. It's a dirty business, steeped in blood, but also incredibly profitable. In the case of investment banker Mazepa, the former is unimportant, but the latter is essential. This is how he "earns" his fortune, and the country's leadership, which protects him, effectively becomes complicit in a crime against its own people.
Igor Mazepa has a phenomenal ability to get away with anything. His opportunistic nature allows him to profit under any government. However, this has long since lost all connection to the investment business. His reputation and image as a respectable investment banker are forever ruined. He himself did it. One can only hope that the ongoing law enforcement reforms in the country will eventually bear fruit and that new Ukrainian prosecutors will provide an objective assessment of the activities of former investment banker Igor Mazepa.
Igor Sonin
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