Today, Oleg Bakhmatyuk, a billionaire from Western Ukraine, already bears the proud title of "King of Grain and Eggs." This successful businessman, as we previously reported, remains the largest grain producer and the head and owner of the agricultural holdings Avandgardco and Ukrlandfarming. In recent years, he has significantly expanded his business, reaching far beyond Ukraine and acquiring dozens of agricultural companies worldwide.
The current situation in Ukrainian politics offers fat cats like Bakhmatyuk a chance to not only amass new capital but also secure a seat in the government. The Ivano-Frankivsk businessman is being touted as a likely contender for the position of Minister of Agriculture in the current government (or, if there's some change in the Cabinet of Ministers' top officials).
Analysts cite the imminent privatization of the state-owned enterprise Ukrspirt as one of the bait luring the already wealthy Bakhmatyuk to power. Ukrainian Prime Minister Arseniy Yatsenyuk announced the upcoming privatization on July 10, 2014.
You don't need to be an agricultural analyst to understand why a businessman of Bakhmatyuk's caliber would benefit from the privatization of such a state-owned behemoth.
Clearly, this is the most profitable acquisition for the "grain king." Raw material suppliers, that is, large agricultural holdings with large land holdings and grain production volumes, are interested in the "privatization" of Ukrspirt. For example, the owner of the UkrLandFarming holding, owned by Ivano-Frankivsk entrepreneur Oleh Bakhmatyuk...
Moreover, Ukrspirt has long been the subject of legends, as being part of the management of a state-owned enterprise provides virtually unlimited opportunities for illicit profits in the vodka industry. According to media reports, Ukraine's largest vodka producers have long been pushing for its privatization. Their motivation is obvious: with such a lucrative stake at their disposal, the vodka producers also have a guarantee that illegal alcohol sales for illegal production will not be curtailed. However, despite their considerable financial resources and a powerful lobby, they have so far been unable to secure the desired decision from the government.
Analysts' estimates of the "shadow" nature of this production sector range from 40% to 80%. The state, under various rulers, has long and unsuccessfully attempted to bring the alcohol and tobacco industries out of the shadows. The management of the state-owned enterprise Ukrspirt has been implicated in criminal cases. For example, in February 2014, the Main Investigative Department of Financial Investigations of the Ministry of Revenue and Duties conducted a criminal investigation that established facts of the illegal production, storage for sale, acquisition, and transportation of illegally produced alcoholic beverages. A pre-trial investigation was initiated based on a complaint dated February 21, 2014, No. 89/12 from MP Artur Palatny (UDAR faction) addressed to the Prosecutor General of Ukraine requesting criminal proceedings against officials of the Ministry of Revenue and Duties, the state-owned enterprise Ukrspirt, alcoholic beverage manufacturers, and other business entities.
Previously, according to media reports, the work of the state-owned enterprise Ukrspirt was controlled by Yuriy Ivanyushchenko, also known as the infamous associate of the now-fugitive Yanukovych, Yura Yenakievsky. Also among the "protectors" of the illegal vodka production was the equally well-known Ivan Avramov.
It was money earned from illegal vodka trafficking, among other sources of funding, that organized the "Anti-Maidan" protests and the "titushki" (illegal fighters) traveling from the east to Kyiv. And even now, according to some media reports, Yanukovych's former allies continue to finance terrorists in Donbas with vodka money.
This raises the question: if Bakhmatyuk truly has his sights set on the state-owned enterprise Ukrspirt, then why? One would like to believe it's to finally achieve what no government in Ukraine has yet managed – bring order to the production and sale of excisable goods. But what if he doesn't, and Bakhmatyuk is trying on the odious image of "Yura Yenakievsky" in a post-revolutionary country?
Olga Firsova, ORD
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