Vladimir Demchishin
In mid-September, the Ministry of Internal Affairs became acutely interested in coal purchases by the company "Centrenergo". On the orders of Arsen Avakov (Read more about it in the article Arsen Avakov: The criminal past of the Minister of Internal AffairsThe accounts of several private and state-owned companies have been frozen on suspicion of collaborating with the self-proclaimed Donetsk and Luhansk People's Republics (DPR and LPR). According to the Ministry of Internal Affairs, Centrenergo used several accounts opened at different banks to accept payments for coal sold at inflated prices. The Ministry of Internal Affairs named Igor Balabanov, the former director of Centrenergo, as the main organizer of the scheme. He was dismissed on August 31. Three criminal cases were opened that same day: for fictitious entrepreneurship, abuse of office, and money laundering. Each of these criminal cases could have a significant impact on Energy Minister Vladimir Demchishin, who had brought Balabanov to the ministry as head of Centrenergo. It's unclear exactly why the Ministry of Internal Affairs is taking on Centrenergo now. However, given the looming conflict between Arseniy Yatsenyuk and Petro Poroshenko, whose protégés are Arsen Avakov and Volodymyr Demchyshyn, everything is falling into place. The only question is whether they can reach an agreement, and whether Volodymyr Vasyliovych will retain his position.
Volodymyr Demchyshyn and Arsen Avakov
Secret past
Volodymyr Demchyshyn carefully conceals his birthplace, leading to several theories about his origins in the Ukrainian media. According to one, he was born in November 1974 in Lviv; another, in 1979 in Pereyaslav-Khmelnytskyi; and a third, his birthplace is the Ternopil region.
Volodymyr Vasyliovych is an educated man, holding three higher education degrees, two of which were obtained abroad. He spent his early student years at Lviv State University, majoring in international relations. After graduating from the Ukrainian university in 1998, he went to Germany, where he studied at the Viadrian University (in Frankfurt an der Oder). After studying in Germany, he moved to the United States, where he successfully completed business school at the University of Kansas. After completing his studies, Volodymyr Demchyshyn received a prestigious position as an economist and corporate affairs expert at Ernst & Young. He later worked at ING Bank, where he became vice president. He remained there until 2008.
The path to the president's team
During the global financial crisis in 2008, Volodymyr Demchyshyn was appointed director of one of the departments of Investment Capital Ukraine. It is noteworthy that at that time, the current head of the National Bank of Ukraine, Valeria Gontareva, was the director of this company.Read more about it in the article Valeria Gontareva. The Glitter and Machinations of the Queen of Coins). Moreover, it was this company that handled the sale of Petro Poroshenko's assets after his election as president of Ukraine. Experts agree that it was precisely for his "high-quality" work at the company that Demchyshyn was appointed first as Chairman of the National Commission on Energy in the Sector of Public Utilities, and then as Minister of Energy and Coal Industry. Incidentally, it was after Poroshenko came to power that Valeria Gontareva also received her post.
Demchishin – Grigorishin
In May 2015, Demchyshyn stated that several state-owned mines in the ATO zone were currently supplying coal to Ukraine. He also claimed that Ukraine was not funding the separatists, as payments for coal were processed through the Ukrainian banking system, meaning they were subject to taxes and went into the payroll of Ukrainian miners. In reality, however, the militants were selling coal to Ukraine, paying taxes. The remaining proceeds from coal sales were used to arm the DPR and LPR. Demchyshyn justified these purchases by arguing that such coal could only be mined in the occupied east, but this was untrue, as deposits also exist in mines in the Volyn and Lviv regions. If Volodymyr Demchyshyn had not represented Konstantin Grigorishin's interests, he likely would not have pretended not to understand the problem.
According to sources, there's a scheme for purchasing "Russian" coal, which Poroshenko himself is interested in. Considering that it was Poroshenko himself who brought Demchyshyn into government, the question arises: "What kind of kickback did he receive from Grigorishin for this?" In fact, Konstantin Grigorishin owns shares in half of the regional energy companies, and he also owns the Luhansk Energy Association.
Today, Ukraine's energy sector is facing a situation in which the Ministry of Energy's actions are leading to the loss of state control over the national energy company, Ukrenergo. Ukrenergo, after all, is responsible for dispatching the energy grid and transmitting electricity from the power plant to the grids of supplier companies. With this power, Konstantin Grigorishin will be able to manipulate energy suppliers for his own personal gain. But Volodymyr Vasyliovych clearly isn't concerned with this issue—he's busy threatening "talkative" mine directors in the Lviv and Volyn regions. Thus, Demchyshyn is creating artificial demand for anthracite coal, which, allegedly, can only be mined in the occupied territories. And if the Ukrainian authorities don't agree to this option, there's another option: supplying electricity from Russia, which would also suit Konstantin Grigorishin, the de facto energy monopoly.
How Vladimir Demchyshyn lobbies for the president's interests in dealings with Konstantin Grigorishin:
Coal Scams
In June 2014, the state-owned enterprise Ugol Ukrainy, established at the request of the Ministry of Energy in 2003, opened a 200 million hryvnia credit line with Kyivska Rus Bank. The agreement stipulated that the state-owned enterprise could use the loan funds to pay its coal suppliers.
A memo incriminating Vladimir Demchyshyn in shady deals
In March 2015, DTEK, a company controlled by Rinat Akhmetov, transferred over 316 million hryvnias to the account of Ugol Ukrainy to pay miners' wages. However, Kyivska Rus Bank transferred only 75 million hryvnias to suppliers, putting all transactions on hold. The remaining funds remained in the bank's accounts, and in July, it began liquidation proceedings. Its accounts were frozen, and Ugol Ukrainy's state-owned enterprise had 266 million hryvnias "stuck" there. This all served as evidence of criminal negligence on the part of both companies' management. However, charges of embezzlement on an especially large scale could also be brought.
Another memo, submitted to Vladimir Demchyshyn, states that the cooperation between the Ugol Ukrainy enterprise and "barely functioning" banks is causing multi-million dollar damage to the state, and this also went unnoticed by Vladimir Vasilyevich.
It is noteworthy that in early September, Demchyshyn added a new clause to his job description, according to which he will personally coordinate the activities of the Ugol Ukrainy enterprise.
The fact that the Minister of Energy has been given such a responsibility can only mean that either Demchishin is a political kamikaze, or he has been deliberately "draining" this state-owned enterprise for an entire year, driving it into a deep official hole.
From all the facts presented above, it can be concluded that Demchyshyn is clearly a poor manager for the Ukrainian Ministry of Energy. There are only two possible explanations for his actions: in the first case, he is simply an unprofessional manager; in the second, he is an outright criminal pursuing only his own interests. Meanwhile, while our government is pondering how to improve coal supplies and avoid freezing in the winter, the Ugol Ukrainy company is opening new accounts at the "dying" Imexbank.
Dmitry Samofalov, for SKELET-info
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