Serhiy Kurchenko, Yanukovych's "wallet money" who fled to Russia, is reviving a powerful media holding in Ukraine. For what purpose? The answer lies in the investigation by Novaya Gazeta's own correspondent, Olga Musafirova.
Sergey Kurchenko
REFERENCE FROM "NOVA"
The UMH media holding, part of Sergey Kurchenko's VETEK group of companies, owns and manages the licensed Ukrainian versions of Forbes, Vogue, Korrespondent, Telenedelya, Komsomolskaya Pravda, Arguments and Facts, the online resources i.ua, bigmir.net, football.ua, the FM stations Nashe Radio, Retro FM, Europa Plus, Avtoradio, and other assets.
In April 2014, the Prosecutor General's Office of Ukraine placed Kurchenko on the international wanted list, and the Ministry of Internal Affairs announced eleven criminal cases against his companies for fraud and embezzlement. However, the fugitive's lawyers insist that Ukrainian law enforcement is currently conducting no investigations.
"Nugget" King
In November 2012, Forbes Ukrainian journalists Sevgil Musayeva and Oleksandr Akimenko published an investigation on the publication's website with a headline so explosive it was impossible to ignore. "The Gas King of All Ukraine"—that was the title. The article described a modest Kharkiv company that, in a matter of months (the pace accelerated after Viktor Yanukovych became president in 2010), had transformed into an influential player in the oil and gas market.
Journalists examined the success story of the Gaz Ukraina-2009 group of companies—from being registered in a Khrushchev-era building to a front-runner against state-owned Ukrgazvydobuvannya and Ukrnafta in liquefied natural gas auctions. In the state registry of court decisions, Forbes found approximately 50 cases involving companies on the list. They were united by their activities in virtually all regions of Ukraine and Crimea: "they created the appearance of conducting financial and business transactions" and "seized state funds on an especially large scale." But the courts didn't interfere with their tender victories, as at crucial moments, a call would ring, for example, from the Prosecutor General's Office. (Forbes sources pointed to the friendly favors extended to Gaz by MP Artem Pshonka, son of Prosecutor General Viktor Pshonka—both have now found refuge in Russia.)
Connections to Kyiv's top brass originated in Kharkiv, through a single individual, the project's de facto leader. Those he spoke to—officials and businessmen—called him variously: sometimes a talented young lawyer, sometimes a true genius. But more often, they preferred not to offer any descriptions, as it would be too much of a hassle. By the time of his scandalous benefit performance at Forbes, Serhiy Kurchenko had turned 27. A reclusive provincial, he refused to meet with reporters.
The interview took place in late June 2013. By this time, Kurchenko's office was already located in the Arena City complex in Kyiv, and the Gaz Ukraina-2009 office, after rebranding, became the Eastern European Fuel and Energy Company (VETEK). The rapidly legalized businessman himself was busily pursuing yet another series of expensive acquisitions: the Metalist football club, the Odessa Oil Refinery, and then the UMH media holding, which published, among other things, Forbes Ukraine.
The new owner, journalists noted, laughed loudly and loudly—especially when asked why he had acquired an asset that was not his core business, a gas company. (The holding company, a leader in Ukrainian press, radio, and the internet, boasts an audience of 11 million people, representing over 50 brands.) "...You wrote an article in December, and I decided to buy the entire holding company? Brilliant! Please write that! What a funny joke."
Immediately after the publication on Forbes.ua, Kurchenko, in the best traditions of party and Soviet bigwigs, actually visited UMH management—either to threaten or to negotiate amicably. The holding's lawyers were tasked with re-examining the entire evidence base of the article. The review dragged on for so long that Vladimir Fedorin, the magazine's editor-in-chief, resorted to extreme measures. He said: either the article goes ahead, since there's no doubt about the professionalism of his colleagues, or he himself will resign without submitting the next issue.
The issue was published. The facts, as they used to say in the Party and Soviet era, were confirmed. But they didn't interfere with anything further—just like in the investigation described above.
According to various estimates, the holding company cost its buyer, Serhiy Kurchenko, between $350 million and half a billion. (The significant discrepancy in the information is explained by the fact that the parties did not disclose the amount, while simultaneously spreading rumors both upward and downward.) "This is 100% a business deal and a bargain!" Kurchenko assured Forbes journalists, announcing significant investments in product development. He promised not to tone down the usual topic—even if it concerns abuses by Yanukovych's "Family!"—and emphasized: "I will strictly comply with the licensee's requirements."
Serhiy Kurchenko's first interview, however, wasn't with Forbes, but with another UMH publication, Korrespondent magazine. It was titled, rather amicably, "The Golden Guy" (without quotation marks). The young oligarch shared, "I know at least five or six people in Russia and Ukraine who had as much, and maybe even more, at that age: (Mikhail) Prokhorov, (Roman) Abramovich, (Petro) Poroshenko, (Konstantin) Zhevago. How did it happen for me? I started working as a courier at 15 for Expogaz... Then I came up with the idea of wholesale."
...Vladimir Fedoryn resigned in June 2013, unwilling to even meet the "natural-born king." He believed that UMH publications would henceforth play roles far removed from the media business. Specifically: to engage in every possible editorial policy in the upcoming 2015 presidential campaign on Viktor Yanukovych's side.
In November, thirteen employees of the magazine and website resigned, including the authors of a well-known investigation and interview. Katerina Kobernik, who held the position of deputy editor, bid farewell to readers: "We were not allowed to cover topics we considered important. Without explanation. In a manner that is not customary for Forbes editorial communication with journalists."
That same November, two dozen employees resigned from Korrespondent, including editor-in-chief Vitaly Sych—he was the one who had been conducting a loyal interview with the "golden guy." And in December 2013, Korrespondent established a department dedicated to censorship.
Fedorin's predictions began to come true.
Two weeks before Maidan
The Ukrainian media holding (now UMH Group) was founded in 2000 by Boris Lozhkin, a native of Kharkiv, who could be called a natural talent and, to some extent, a king.
He'd been involved in journalism since the age of fourteen, and by eighteen, he was already the publisher of the popular "Telenedelya" newspaper. In 1998, he bought a franchise to publish newspapers in Ukraine—Komsomolskaya Pravda and AiF—for those nostalgic for the "old press." In late 2009, he gave a gift to everyone who despised ex-Soviet journalism: he obtained a Forbes license. Lozhkin was beloved by athletes (Football), drivers (Behind the Wheel), and glamorous young ladies (Vogue), not to mention radio audiences ranging from Retro FM to Europa Plus and a multitude of diverse online resources. The holding company was among the top ten publishing companies in the Russian Federation and, according to researchers, dominated the minds and tastes of 12% of the adult Russian-speaking population in the former USSR. In 2008, multimillionaire Boris Lozhkin was awarded the title of "Best Media Manager of Russia." Ukrainian nationalists labeled him the country's chief Russifier, but the head of UMH paid no attention. After all, both Rinat Akhmetov and Petro Poroshenko were happy to become his business partners.
In the spring of 2011, Jed Sanden, owner of the KR Media holding, sold a whole line of high-quality media outlets, including Korrespondent, to the owner of Channel 5 television, MP Petro Poroshenko, and Boris Lozhkin. And in the winter of 2012, as reported by the press service of the Ukrainian Media Holding, UMH, KR-Media, and Media Group Ukraine (part of Rinat Akhmetov's SCM Group) announced the merger of their assets.
Who, even more powerful, would now decide to tap into the source of the printed word, as well as the unprinted, that is, the broadcast word? (Lozhkin had never been involved in television projects in Ukraine, rightly believing the channel prices to be unrealistic, non-market, and based on the purely political conjuncture of the product.) One answer was obvious. Especially given the crisis in the local media business, against the backdrop of which large-circulation, high-budget, free newspapers emerged, oriented toward a union with Russia—and not just the Customs Union.
The "golden man" acted as the harbinger of change in Boris Lozhkin's fate. Before him, a former top manager of the holding company told Novaya Gazeta on condition of anonymity, partners from Gazprom-Media had expressed interest in purchasing the company. Gazprom was politely turned down. (The source denied rumors that Alexander Yanukovych, head of the MAKO group, intended to acquire the media asset.) "Kurchenko received an order from Bankova Street (the street where the Ukrainian presidential administration was located – O.M.): 'Buy it!' Just before Viktor Fedorovich's presidential election. And to do a little sewing for Kurchenko himself... By that time, many critical videos about him had already appeared online. And he realized he needed his own resources to fight back."
Petro Poroshenko's share in UMH and the share of billionaire and co-owner of the Privat group Gennady Bogolyubov (Read more about it in the article Gennady Bogolyubov: What Privat's other half is keeping quiet about?) Lozhkin had to buy out his stakes in the Ukrainian "Komsomolskaya Pravda" and the Russian "Telenedelya" channel. Bogolyubov made it clear that he knew the potential buyer well and therefore wasn't considering staying. There were also reports that his Russian partners, Leonid Makaron and Vadim Goryainov, intended to sell their stakes in UMH and its projects, but I couldn't find any confirmation of this. Lozhkin maintained a gentlemanly demeanor and didn't hint at pressure. "I'm tired of looking for investment, and besides, they offered me a very good price," was all he said as he bid farewell to his brainchild.
Poroshenko, however, shared his recollections with the press at length: neither the president (Viktor Yanukovych), nor the prime minister (Mykola Azarov), nor the speaker of parliament (Volodymyr Lytvyn) ever called him. They didn't call after the publication of the aerial photograph of Mezhyhirya in Korrespondent, nor about the investigation into the massive scale of illegal coal mining in Donbas, with the possible involvement of Oleksandr Yanukovych, the president's eldest son, nor about the refutation of a journalistic article about the sources of the head of state's income. The calls came from certain "others," who believed they were being targeted by an information attack, and that Petro Poroshenko was a participant in it.
The deal was scheduled to close in the spring of 2014. However, Kurchenko made the final payment in early November 2013, taking out a bank loan. Something was already in the air… The sales documents contained a clause stating that until final payment was made, the buyer could not influence the holding's publication policies. The denouement of Yanukovych's European integration story was approaching, along with the Eastern Partnership summit in Vilnius.
There were two weeks left before Maidan.
Image is everything?
Events in Ukraine then flew like Molotov cocktails. The information flow grew no less heated.
The holding's recent co-owner, opposition MP Petro Poroshenko, was at the forefront of the revolution. Boris Lozhkin (who mentioned dreaming of living in Silicon Valley, waiting for fresh ideas) was relatively unknown. Serhiy Kurchenko, an associate of the "Family," was suspected of directly financing the violent suppression of the Maidan, and later of organizing armed separatist uprisings in the Donbas.
Each dramatic episode resulted in journalists leaving UMH's editorial offices, individually or in groups. Working on the "temniki," which were personally or through trusted representatives controlled by Kurchenko's "governor," Yuriy Rovensky, chairman of the holding's supervisory board and former head of RBC, seemed like a chore. This was a boon to Yanukovych's government. But Forbes lost its license, and the once-popular Korrespondent, not to mention Komsomolskaya Pravda, lost its face and audience.
When blood was spilled on the streets of Kyiv, CEO Yulia Kovaliv also resigned. Several other experienced managers followed her example, replaced by an on-call team from Moscow. Now the tone of UMH's publications was in complete harmony with the Russian Federation's state mouthpieces. The holding's financial situation worsened. Rovensky continued to promise development of the television segment—the effectiveness of Dmitry Kiselev's propaganda was, after all, a source of creative envy.
After Yanukovych's flight, it became clear that there was no need to overexert himself in the 2015 presidential campaign. And there was no need to prepare for the early elections with the candidate. Viktor Fedorovich faced another sentence – prison. Following Yanukovych, according to media reports, Serhiy Kurchenko also fled the country, having been placed on the international wanted list by the Prosecutor General's Office. Journalists and public activists discovered only dozens of garbage bags filled with hastily shredded documents in the parking lot near the VETEK headquarters. Yuriy Rovenskyy himself was banned from entering Ukraine for three years. He continued to manage content from Moscow. Compliance with instructions was becoming less and less effective – life itself was returning the teams to a normal professional routine.
In March 2014, journalists even discussed a sensation: Kurchenko was apparently ready to form an alliance with the representative of the winning side, Vitali Klitschko. Envoys of the "King of the Nuggets" offered trusted associates of the UDAR leader the opportunity to buy or lease with the option to buy, under very favorable terms, the UMH media holding, a suitcase without a handle and without profit. The UDAR people were primarily interested in political resources (nothing personal, just elections looming!), and they didn't know what to do with entertainment projects. Kurchenko, for his part, simply wanted to repay the enormous bank loan he had taken out to acquire the asset at a time when Viktor Yanukovych's power seemed secure and promising. The deal fell through for unknown reasons.
In May, Petro Poroshenko won the early race for the presidency and peace in Ukraine in a single round. His first decree effectively appointed Borys Lozhkin as head of the presidential administration. Experts cited not only the undeniable organizational talent of Poroshenko's former business partner but also his long-standing contacts with virtually all the country's oligarchs, as well as with Serhiy Lyovochkin, Yanukovych's former head of administration. Serhiy Kurchenko began actively pursuing the lifting of the sanctions through the Council of Europe. The lawyer claimed that the Prosecutor General's Office of Ukraine has no evidence of illegal activity by his client, and no criminal case exists. Journalistic investigations? Well, that's just black PR!
The terrible summer of war had passed. By its end, the president had identified a necessary condition for a societal reset: early parliamentary elections. The Party of Regions refused to participate in the campaign. Following the Euromaidan and the events in the east of the country, its ratings fell to historic lows. But the spirit of the Party of Regions did not vanish; rather, it permeated the newly formed Opposition Bloc.
A delegation of the new opposition flew to their colleagues in the Duma for ideological support. They also sought advice from a young exile from Kyiv. Party of Regions MP Olena Bondarenko returned with an offer to replace Yuriy Rovenskyi as head of UMH. A quote from the "golden man," who suddenly sounded like the General Secretary of the CPSU Central Committee, was included: "Today, people with extensive political experience are entering the media all over the world. The growing public interest in politics predetermined my decision, which should give new impetus to the holding's development."
Bondarenko responded in unison: "I am grateful to Sergei Vitalyevich Kurchenko for the trust he has placed in me." She had risen rapidly from press secretary of Donetsk businessman and politician Boris Kolesnikov to a distinguished journalist of Ukraine, had experience battling "Banderovites" on television, and could direct the ideological front's fighters to anything. Some of her subordinates resigned without waiting for the next reload of their multiple rocket launchers.
"Kurchenko's image is difficult to erase," a former top manager at the holding company told Novaya Gazeta. "Therefore, for those in Ukraine who risk negotiating with him, contacts are fraught with reputational risks. However, he does have a chance to return—once the shooting in the east stops. To do that, Kurchenko must make a firm commitment—namely, to help end the war, no more, no less. That means, from Moscow, influencing the business elite and finding arguments. He has always been a kind of bridge between the Russian 'there' and the Ukrainian 'here.'"
For some reason it seems like these people will come to an agreement.
Olga Musafirova, Новая газета
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