Attempted corporate takeover of Agrosvit: Are law enforcement, the judiciary, and the courts operating in a new way?
In just 10 months, raiders destroyed a successfully operating agricultural enterprise.
There will be no investment in the Ukrainian economy. At least not under this government. The prosaic lack of solvent demand is cited as the reason for businessmen's reluctance to enter the domestic market. Indeed, our country's population has become at least three times poorer over the past two years. But that's not the main point. Today, as in the distant 1990s, corporate raiders have become more active, with the not insignificant support of officials, destroying businesses that are trying to thrive even in these difficult times.
Meet Agrosvit, LLC, a leading player in the Kharkiv region agricultural market until mid-2015. The agro-industrial association comprised a group of companies owning three grain elevator complexes, two processing plants (one for grain and one for feed), a fleet of 35 vehicles, warehouses, and a number of non-core assets.
Agrosvit Director Elena Lupinskaya says: "We employed 500 people. The grain elevators' annual throughput reached 250 tons. The grain processing plant operated at 100% capacity and around the clock. The LLC's authorized capital was 160 million hryvnias. And according to an international audit, the company's value in 2014 was over 30 million euros."
Today, all these indicators can be forgotten. It appears that the company has become hostage to its own success, as it has become attractive to corporate raiders. And since the current authorities, as practice shows, are not interested in the development of Ukrainian business, there is no one left to protect the enterprise. To say the least.
Alexander Bichuch: "I hope that corruption will one day end in our country. The rule of law, not the dictatorship of money, will prevail." Katerina LASHCHIKOVA
AgroSvit LLC was founded by Kharkiv native Alexander Bichuch (born 1960). He graduated with honors from M. Gorky Kharkiv State University with a degree in physics. From 1986, he worked in research at the Low Temperature Department. However, in 1989, like many young scientists at the time, he changed his field of work and went into business (electronics).
In 1998, seeing potential, he tried his hand at agribusiness, initially as a trader. He founded several successful companies: Sloboda LLC, Vesta LLC, and Nadiya LLC. In 2008, he founded Agrosvit, which included several operating companies engaged in various activities, including storage, processing, and distribution of agricultural products.
In the late 1990s, Alexander Lvovich met Sergei Polumysny. As it turned out 20 years later, this meeting proved fatal for Bichuch's business. It was Sergei Valerievich who launched a corporate raid on Agrosvit in the spring of 2015, taking advantage of the fact that Alexander Bichuch was undergoing surgery at the time.
Sergei Polumysny (born 1976) earned a degree in management from Kharkiv Polytechnic University. He also completed a correspondence course at the Police Academy, where he presumably made valuable connections that would later serve him well in the challenging field of corporate raiding.
Bichuch recalls: "When I met Polumysny, he was engaged in small-scale commerce—transporting excisable goods to Moscow. He was experiencing financial difficulties and legal problems. I helped him resolve all his issues and offered him a job at my company. Our enterprise was rapidly developing, and gradually he rose from a rank-and-file manager to a businessman. At first, I gave him a 30% stake in our company, then almost 50%, and in 2011, he became an equal partner."
"I didn't have children of my own for a long time," Alexander Lvovich continues, "and I treated him like a son, even though there's a 16-year age difference between us. I taught him and raised him. For several years, Sergei practically never left my office."
For a long time, the partners shared a common vision for building a company. In 2011, they established several companies in Cyprus: A.S. Agro Capital Limited (owned by Alexander Bichuch) and Novaagro Limited (Sergey Polumysny). These two companies, in turn, founded another Cypriot company, Agrosvit Limited, with equal shares, which ultimately became the 100% owner of the Ukrainian APA Agrosvit LLC.
Double game
Both partners were authorized to manage Agrosvit Limited, which meant that each of them could independently hold general meetings of Agrosvit LLC's shareholders. "But as soon as Polumysny received the status of an equal partner in the company, he began to play a double game," concludes Bichuch.
On April 15, 2015, Polumysny, using a broad power of attorney and acting as a representative of Agrosvit Limited (without the knowledge of the Cypriot company or Alexander Bichuch), held a general meeting of Agrosvit LLC. Following the meeting, he unilaterally, in violation of the current charter, decided to liquidate the LLC and appointed Volodymyr Parkulab, his long-time business partner, as liquidator. In accordance with Ukrainian law, information about the company's liquidation and the liquidator was entered into the Unified State Register.
Sergei Polumysny's phone has been unable to receive calls for several weeks now, Katerina LASHCHIKOVA
The question arises: why liquidate a company that was successful at the time? It's very simple. This decision allowed Polumysny to dispose of Agrosvit's property and assets as he saw fit, without his partner's knowledge. This is classic corporate raiding.
Indeed, with the assistance of Andrey Levin, the then director of the LLC, Sergey Polumysny began actively siphoning off the company's funds and assets to his affiliates: Novaagro Ukraine LLC, Edelweiss Trading House LLC, Agrosvit Trading House LLC, DIKV-L Management Company LLC, and Sadovod JSC. According to Oleksandr Bichuch's estimates, hundreds of millions of hryvnias have already been illegally transferred from Agrosvit to date.
"Proof that Polumysny and his people have siphoned off large sums of money from our company," explains Alexander Bichuch, "is that recently, for some reason, the Antimonopoly Committee of Ukraine granted permission to the Cypriot company Novaagro, which belongs to Sergey Valerievich, to purchase two grain elevators in the Kharkiv region and two more in the Luhansk region. Now he's laundering the funds stolen from us in this way."
Interestingly, Serhiy Polumysny has long been talked about as a raider in the Kharkiv region. "I heard various rumors," says Oleksandr Bichuch, "but I refused to believe them. Now I deeply regret it." Although there are still people who can reveal at least two incidents involving Polumysny.
Kharkiv entrepreneur Yevhen Bondarenko recounts: "In 2007, Polumysny tried to force some kind of contractual relationship on Vladimir Sazonov, the chairman of the Lozovenka farm. The chairman resisted as best he could. Ultimately, Vladimir Mikhailovich was found hanged in the woods. I'd known this man for many years; he had no plans to die. After his death, Polumysny became the owner of Lozovenka."
"In 2009," Bondarenko continues, "Sergey Polumysny wanted to buy the private enterprise 'Markos,' a farm in the village of Aseyevka. My father-in-law, Vladimir Soroka, was the director of the enterprise. After signing a number of documents and transferring corporate rights, Vladimir Vladimirovich died suddenly. I don't believe in such coincidences. Furthermore, Polumysny failed to fulfill his obligations to our family and didn't pay in full for the acquired property. Farms were seized using a similar scheme in other districts, but at least the chairmen there remained alive. I contacted the regional prosecutor's office. I think Polumysny got scared and quickly sold all these farms."
Back then, Sergei Valerievich was afraid. Today, apparently, he fears nothing and no one anymore, because his cooperation with officials has reached a new and much higher level. The courts, the police, and the justice system—without the help of these government agencies, the corporate raid on Agrosvit would have been impossible. Below, we'll look at examples of this symbiosis between a businessman and the authorities.
A trial to nowhere
Upon learning of his partner's actions, Alexander Bichuch was forced to defend himself. But unlike his opponent, he coordinated his actions with the owner of the LLC, the Cypriot company Agrosvit Limited. On April 21–22, 2015, he held a general meeting of APA Agrosvit LLC, cancelled the company's liquidation proceedings, dismissed Andrey Levin, and appointed a new director of Agrosvit, Elena Lupinskaya.
However, he failed to register the decisions made in the Unified State Register, as required by law. On the same day—April 22, 2015—in order to prevent the cancellation of the LLC's liquidation, Vladimir Parkulab submitted to the state registrar a decision of the Kyiv District Court of Kharkiv prohibiting the registration of APA Agrosvit LLC, dated April 22, 2015.
Legal practice shows that such coincidences in dates are unlikely. Rather, they indicate a clear and comprehensive preparation of the actions.
"The first-instance court's decision to open proceedings is illegal, as such disputes are not heard by local courts, only by the Commercial Court," explains Kharkiv lawyer Oleg Atiskov. "And the appellate court, when subsequently reviewing the complaint, confirmed the violation of jurisdiction. However, the raiders' intended goals were achieved, as they had to wait almost two months for the appellate court's decision."
During this time, the raiders created a veritable conveyor belt of court decisions. The Kolomaksky District Court of Kharkiv Oblast (Judge Andriy Yakovenko), the Kyivsky District Court of Kharkiv (Svetlana Shmatchenko), the Commercial Court of Kharkiv Oblast (Sergey Prokhorov), and others all made their mark. These decisions followed one after another, ensuring that no entry in the state registry was possible.
"We're currently seeing 50 court cases a month," laments Alexander Lvovich. "At least two a day! And there's no end in sight. But at the Kharkiv and regional level, no one wants to listen to us."
The most striking example is the work of Kolomaksky District Court Judge Andrei Yakovenko. On July 13, 2015, he opened proceedings on Andrei Levin's claim and prohibited the registration of changes related to the appointment of a new director of Agrosvit. On July 14, he reversed his own prohibition and issued a new one—for the state registration of the cancellation of the liquidation of Agrosvit LLC.
On July 16, Yakovenko made three decisions. The first clarified the essence of the July 14 resolution, and the second and third rescinded the document he had issued banning registration actions.
The judge's behavior isn't entirely logical, is it? "In this case, the judicial system's inconsistency raises many questions. And this could indicate the judge's bias," Oleg Atiskov emphasizes.
Needless to say, the judicial blockade for several months made it impossible for employees of APA Agrosvit LLC to perform their official duties in any normal manner.
"Back in June," recalls Natalia Gritsenko, an Agrosvit employee, "former director Andrei Levin gathered us all and asked us to submit resignations, threatening to withhold wages and bonuses for those who refused. I refused, since Andrei Petrovich was already the former director at that point and had no authority to dictate anything to us." Ultimately, 24 of the office's 30 employees submitted resignations.
"On July 1st, those who refused to resign were evicted from their workplaces to the building's basement," Gritsenko continues. "We remained there until July 13th. And on July 14th, we weren't allowed into the office at all, not even allowing us to retrieve our personal belongings. We called the police, as we believed they were trying to fire us for absenteeism. The police recorded this violation, and this continued (including daily police calls) until July 22nd, that is, until the court injunction preventing state registration of changes to Agrosvit LLC was lifted."
"On July 22, when the decision regarding my appointment was finally entered into the register," recalls Elena Lupinskaya, director of the LLC, "we arrived at the office and discovered that all the documentation, computers, and servers were missing. Access to the company's accounting database had also been blocked. Clearly, it was impossible to conduct business under such conditions."
No less revealing is Polumysny's cooperation with law enforcement. For example, on July 30, 2015, Andrei Levin filed a complaint with the Kominternovsky District Police Department alleging that Alexander Bichuch, Elena Lupinskaya, and other company employees intended to illegally seize APA Agrosvit LLC.
The very next day, investigator Liliya Dudnik opened a criminal case based on this statement. However, Dudnik turned a blind eye to such a "trifle" as territorial jurisdiction. After all, according to the law, once opened, the case must be sent to the location where the crime was committed—in this case, to the Kyiv District Police Department in Kharkiv, where the legal address of APA Agrosvit LLC is located.
"Polumysny was declared the injured party, which he is not under the Criminal Procedure Code. Nevertheless, the 'injured party's' property is being seized, further paralyzing Agrosvit's operations," explains Oleg Atiskov.
At the same time, the investigator is refusing to allow the sole owner of APA Agrosvit LLC, the Cypriot company Agrosvit Limited, to participate in the criminal proceedings. And, as you've probably guessed, the investigator is denying all of Elena Lupinskaya's petitions without explanation.
From June to September 2015, at the instigation of Oleksandr Bichuch, three criminal cases were finally opened in two district police departments and the Kharkiv Investigative Department in connection with the actions of Andriy Levin and Volodymyr Parkulab. However, on November 4, the prosecutor's office transferred all cases to the Kharkiv City Police Department. The following day, the cases were closed "due to lack of evidence." Meanwhile, on November 7, the Kharkiv City Police Department was liquidated due to reform.
"When making this decision, the prosecutor's office couldn't have been unaware of the imminent liquidation of the city police department," Atiskov comments. "Therefore, transferring the cases to such a body made no procedural sense. Moreover, this decision defied logic. But if we look at the situation from the perspective of some kind of agreement between the interested parties, then it certainly makes sense. The case was transferred, closed, archived, the pre-trial investigation agency was liquidated, and the cases were buried."
As can be seen from the documents presented, all three orders to close criminal proceedings were signed by one investigator, Andrey Bulakh, who, like Liliya Dudnik, now continues to work in law enforcement agencies in the Kharkiv region.
"In the 10 months we've been combating corporate raiding," says Alexander Bichuch, "we've uncovered numerous cases of corporate raiders collaborating with government agencies. And we're no longer surprised by the most absurd things and the corruption that flourishes in our region."
Friends and classmates
"The Ukrainian Ministry of Justice is also involved in the scheme," continues Oleksandr Lvovich, "represented by the Kharkiv registration and enforcement services. The enforcement service is placing endless seizures on our property and accounts. Elena Lupinskaya hasn't made a single payment in her six months as the company's director!"
"State bailiff Oleksiy Kuzmenko, ignoring the decision of the Kharkiv Commercial Court of Appeal, wrote off more than 15 million hryvnias from the company's accounts on January 18 and 19 of this year through a payment demand," Oleg Atiskov cites as an example.
"We will definitely reclaim these millions, as the bailiff's actions are completely illegal," Bichuch emphasizes. "But since I believe Novaagro no longer has this money, the funds will be forced to be compensated from the state budget."
Alexander Lvovich also points to other strange occurrences: "Earlier this year, Alexander Viktorovich Chursin was appointed head of the Ministry of Justice's main territorial department in the Kharkiv region. There's nothing unusual about this, but a certain connection to our story can be traced. It turns out that Chursin and Parkulab were in the same class at the Yaroslav the Wise National Law Academy in Kharkiv. It also seems to be a coincidence that Chursin's wife, Marina, was a co-owner of DIKV-L Asset Management Company LLC until mid-2015, which has now been acquired by Polumysny's company, Novaagro, and into whose accounts, among other things, he is siphoning Agrosvit assets."
As we discovered from open sources, prior to his appointment as head of the regional justice department, Chursin worked in the State Migration Service, which reports to Arsen Avakov's Ministry of Internal Affairs. He was appointed to his new position by order of Justice Minister Pavlo Petrenko. This is what physics calls a "closed circuit," in which hundreds of millions of hryvnias of Agrosvit flow instead of electricity.
Interestingly, the Unified State Register (usr.minjust.gov.ua) lists five entities with the abbreviation "DIKV-L" in their names: a public organization, an asset management company, a pawnshop, a law firm, and a recruiting agency. According to the ORD portal (www.ord-ua.com), all of these companies are associated with Kharkiv resident Ihor Repeshko, who was appointed head of the Main Directorate of the Ministry of Internal Affairs of Ukraine in Dnipropetrovsk Oblast in May 2015.
It should be noted that Major General of Police Repeshko has repeatedly featured in various journalistic investigations, which recount his turbulent activities during his service in the internal affairs agencies and tax police of the Kharkiv and Poltava regions.
Be that as it may, today the Cypriot company Agrosvit Limited, having lost its last vestiges of trust, has decided to begin the liquidation process of APA Agrosvit LLC, appointing Alexander Bichuch as liquidator. Indeed, what future can one possibly talk about under a judicial blockade and blatant asset stripping?
"During the corporate raid," says Elena Lupinskaya, "the workforce was reduced by 200 people, grain storage turnover at the company's elevators fell by 2,5 times (to 100 tons per year), and the plants were only operating at half capacity. After all, the enterprises were financed primarily through bank loans. But the opponents sent every court decision to every bank. Naturally, financial institutions couldn't lend to a company whose future was so uncertain. And the funds in the LLC's accounts were frozen, making them unusable. However, the funds were later transferred through fictitious contracts to Polumysny's companies."
And what about Sergei Polumysny? Nothing. Sergei Valerievich's cell phone number, which we know, has been "unable to answer calls" for several weeks now.
It seems as if a powerful, multifaceted mechanism for confiscating other people's property has been established in Arsen Avakov's homeland, the Kharkiv region. I suspect no one would have built such a densely populated, corrupt edifice even for the several hundred million hryvnias already siphoned off from the Agrosvit association.
This means the partners' plans extend even further. It's possible that Alexander Bichuch and his firm's employees aren't the only ones to suffer as a result of the vigorous activity of Polumysny and his partners. It's entirely possible that the raiders' other victims, like the owner of Agrosvit, are keeping silent for the time being, hoping for an amicable resolution to their differences. As experience shows, this is in vain.
"I hope that corruption will one day end in our country. The rule of law will prevail, not the dictatorship of money. Now, if a judge suddenly refuses a large bribe, we consider it a heroic deed! But that shouldn't be the case; the judge is simply doing his job and not committing a crime! Prime Minister Arseniy Yatsenyuk constantly claims that the investment climate is improving, that significant changes have taken place in the country since the Maidan. Unfortunately, we don't feel it," concludes Oleksandr Bichuch.
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