Yuriy Vitrenko, oil and gas business mogul
Yuriy Vitrenko is the son of the leader of the PSPU, Natalia Vitrenko, and a major financial tycoon who decides matters of national importance. He trained and worked not in the impoverished "brotherly" country of the USSR, as his mother, a progressive socialist, advocates and waxes nostalgic about, but in the decaying capitalist countries of Europe and America.
Having gained experience, the foreign manager carried out scams at the Naftogaz National Joint-Stock Company, and then founded an investment company that wanted to profit from the bankruptcy of the state-owned enterprise Ugol Ukrainy.
Today, Vitrenko is practically at the helm of the National Joint Stock Company "Naftogaz of Ukraine" ("Naftogaz Ukrainy"), serving as the company's commercial director, and applies all of his "foreign" experience "for the benefit" of Ukraine.
Yuriy Vitrenko. Family Matters
On September 17, 1976, in Kyiv, the second child was born to Natalia and Yuriy Vitrenko, a young, unremarkable Soviet family. The happy parents named him Yuriy after his father. The boy grew up in a truly ordinary family: his mother was finishing her postgraduate studies at the Kyiv Institute of National Economy, and his father worked as an economist at the Podolsk branch of the State Bank in the capital.
Father of Yuri Vitrenko, also named Yuri
By the time their second child was born, Natalia and Yuriy Vitrenko were actively advancing in the party ranks: Natalia had joined the Communist Party of the Soviet Union (CPSU), and Yuriy was deputy secretary of the Komsomol committee and secretary of the Komsomol committee of the D.S. Korotchenko Kyiv Institute of National Economy. As you've already guessed, we're talking about the same Vitrenkos—Natalia Vitrenko, the leader of the PSPU, and Yuriy Vitrenko, deputy minister of economy in Mykola Azarov's government. (more about it in the article Nikolai Azarov. The Survivor).
At age five, little Yuriy's parents enrolled him in Kyiv's Ukrainian-language School No. 172. Apparently, the then-young Natalia Vitrenko—now a progressive socialist who despises everything Ukrainian—hadn't yet come to terms with her radical views. The decision to send their child to school so early was most likely made by the parents due to a turning point in their careers. Natalia became an associate professor in the statistics department at Kyiv National Economy Institute, and Yuriy Vitrenko went to work for the Ministry of Finance of the Ukrainian SSR as a leading economist in the Department of Education, Science, and Culture Financing.
The Vitrenko family
After 8th grade, Yuriy enrolled in the economics class at Gymnasium No. 153. He also studied at the Kyiv School of Management "STEP," which was transformed into the Lyceum of Economics and Business (since 1993, the Kyiv Lyceum of Business). Around this time, the prosperous Vitrenko family experienced a breakdown. Rumor has it that Vitrenko Sr., unable to tolerate his wife's harsh temper and political views, filed for divorce in 1991. Perhaps the reason for the split was the head of the family's meteoric rise—he was appointed deputy head of the Department of Economics and Forecasts for the Development of Public Education and Culture at the Ministry of Economy of Ukraine. He had no use for his troublemaking wife. Vitrenko Sr. took his son to live with him.
Young prodigy
While studying at the Lyceum of Economics and Business, immediately after his parents' divorce, Yuriy Vitrenko gained his first experience in finance through an internship. At the age of 15, he became an assistant accountant at Ukrinbank. Incidentally, in 2014, representatives of the All-Ukrainian women's public organization "Gift of Life," led by Natalia Vitrenko, attempted to transfer 2 million hryvnias to Russia through this bank.
After completing an internship and gaining experience, the young specialist found a job in 1992. No, he wasn't handing out flyers or mopping floors at McDonald's. Vitrenko took a position as an analyst at the Ukrainian Financial Group. At the same time, the child prodigy enrolled in the Faculty of International Economics at the Kyiv National University of Economics. He worked in his spare time from his full-time studies.
In 1995, the gifted student was invited back to Ukrinbank. There, he became a second-category specialist in the department of foreign economic activity and international settlements. While working at the bank, Vitrenko completed his bachelor's degree at KNEU with honors. Yuri then took a year off from work, deciding to pursue a master's degree in international business management at KNEU. Upon completion, he again graduated with honors. During his studies, Vitrenko Jr. traveled to the "decaying" United States to complete an internship at the Iowa University of Science and Technology. Oddly enough, his mother was completely unconcerned with these trips.
After graduating from university, the master's degree holder found a job at the Ukrainian branch of the international audit and consulting firm PricewaterhouseCoopers (PwC). He attempted to combine this field with his academic work, working as a junior research fellow in the International Integration Strategy Department at the Institute of Economic Forecasting of the National Academy of Sciences of Ukraine. But ultimately, his consulting instincts prevailed. Vitrenko spent two years moving from position to position in PwC's management consulting division, eventually becoming a senior consultant specializing in financial management. He oversaw the financial strategies of domestic and international companies. At the same time, another successful young genius, Andrey Kobolev, was working at PwC.more about it: Andrey Kobolev. An unnoticed "veteran" of the gas pipeline.). Yuriy Vitrenko took Kobolev under his wing. The tandem proved so successful that the young people have been working together for 15 years now.
"Eternal Advisor" and Foreign Experience
In 2002, by decree of President Leonid Kuchma, Yuriy Boyko became the head of the NAK Naftogaz (read about it in the article Yuriy Boyko – "The Untouchable"). Those were turbulent times – the monopoly's leaders didn't last long in office. It was fortunate if they simply went underground without any money, but some were less fortunate – criminal cases were brought against them. Boyko proved smarter than his predecessors and decided to devise new schemes for laundering money into offshore accounts, but exclusively under the guise of the law. To do this, he needed people who understood the NAK's corporate securities, could secure foreign loans, and be responsible for international financial transactions. Oddly, these responsibilities were intended to be assigned to newcomers. Most likely, Boyko and his associates decided to rake in the cash through the hands of others.
Naftogaz opened a vacancy for consultants specializing in international finance and corporate law. Luck smiled immediately – two suitable candidates were found: Yuriy Vitrenko and Andrey Kobolev. The first applicant even submitted his resume to the National Joint Stock Company.
And then the strangest thing emerged: it turned out the young wunderkind didn't have the impressive track record his official biography would lead the average person to believe. According to his resume, Yuriy Vitrenko studied until 2002, worked for four months at an academic institute, and another three at PWC. Despite this, he was hired by Naftogaz Ukrainy. The 26-year-old Vitrenko immediately (!!!) became an assistant to the deputy chairman of the board, Oleksandr Kovalko (Anatoly Kinakh's son-in-law). His friend, 24-year-old Kobolev, settled for less—the position of chief specialist in the corporate finance and pricing policy department. However, the appointments weren't random, as it turns out. Skelet.OrgThe boys were protected by Kovalko's sister, who was then working with them at the audit and consulting company PwC.
Vitrenko handled financial matters at NAK: he calculated gas prices and reverse flows, concluded contracts, and took out loans.
In early 2004, Yuriy Vitrenko quit his job at Naftogaz and decided to study at the European MBA school Insead. In fact, he never left Naftogaz: the indispensable assistant continued to assist his boss, albeit from a distance. After graduating from Insead, the newly minted specialist was offered a summer internship at the investment bank Merrill Lynch in London. Vitrenko had plenty of time on his hands, so he accepted.
In the fall of 2004, Yuriy Yuryevich returned to Ukraine with a newfound knowledge. The National Joint Stock Company welcomed its prodigal son with open arms. He was promoted to deputy department head, and soon became head of the Department of Economics and Pricing Policy. But the Orange Revolution ruined everyone's plans. Natalia Vitrenko fell into disgrace, so her son, through higher-ups, was asked to resign from the state monopoly, and the National Joint Stock Company was replaced by Oleksiy Ivchenko. Rumor has it that Viktor Yushchenko personally called Ivchenko and asked him to remove the undesirable. Vitrenko refused to adapt to the regime and went to London, where he took a job at Merrill Lynch. His starting salary was $110 per year, plus a bonus of the same.
Yuriy Yuryevich handled mergers and acquisitions in Ukraine, Russia, and Eastern Europe. He was directly involved in the acquisition of two of the largest domestic banks, Aval and Ukrsotsbank, by foreign investors. Aval Bank had a very interesting story. Alexander Derkach and his partner Fedor Spieg They sold the financial institution to the Austrian group Raiffeisen International for a then-record $1,028 billion. However, the initial negotiations had suggested a price of $400-600 million. The increase in the sale price could be attributed to both the bank's strong brand exposure to potential buyers and the increased capital. However, it's more logical that one of the speculators behind the deal simply took advantage of the deal and received a kickback.
However, Yuri Yuryevich could not leave Naftogaz NAK. His homeland called him back in 2006. Having left the foggy Albion, Vitrenko immediately became an advisor to Vladimir Sheludchenko, Chairman of the Board of Naftogaz NAK, and some time later, his chief advisor.
During this period, a gas conflict erupted between Russia and Ukraine. The Russian concern Gazprom intended to raise prices for gas supplied to Ukraine in line with prices on the European gas market. Only Naftogaz disagreed. What happened next was this: Russia stopped supplying gas to Ukraine, but the country continued to use natural gas from the gas transmission network for several days. The escalation of the scandal led to the entry of the Swiss company RosUkrEnergo (50% owned by Gazprom and Centragas Holding AG; the latter is owned by Dmitry Firtash and Ivan Fursin) into the gas market. more about them: DMYTRO FIRTASH. THE STORY OF A TERNOPIL BILLIONAIRE и Ivan Fursin: How Levochkin's friends milked and continue to milk Ukraine). It was the sole intermediary between Gazprom and Naftogaz. It's worth noting that RosUkrEnergo became involved in the gas supply scheme at the instigation of Naftogaz. It's pointless to talk about a lucrative contract for Ukraine. Most likely, the "Swiss" were simply given a chance to make money. Firtash and Fursin received $1,5 million from the deal.
In 2007, Vitrenko left NAK. However, he remained a part-time advisor to all subsequent leaders of the monopoly.
A year later, Oleg Dubin, Chairman of the Management Board of Naftogaz, approached Yuri Yuryevich for help. More precisely, he assigned his formal advisor, Andrei Kobolev, and his part-time advisor, Yuri Vitrenko, to correct the mistakes they had made. The gist of it was this. A month after Yuri Vitrenko arrived from London to work for Naftogaz in 2006, a loan agreement was signed with the London branch of Credit Suisse AG. The monopolist borrowed $550 million from the bank at 3,5% annual interest. The loan term was approaching, and the money was in short supply. Then Yuri Vitrenko came up with a brilliant plan: repay the debt and launder the money. He told Andrei Kobolev about it. And he launched it. They decided to restructure the external debt through a formal exchange of Eurobonds and other obligations for new securities of their own issue. Upon completion of the transaction, a debt of $0,3 million remained, along with a currency option, which was based on the initial loan amount—not the remaining $0,3 million, but rather $550 million. The interest rate also increased from 3,5% to 9,5%. Ultimately, Naftogaz paid $7,8 million in commission to the London bank's dealer manager, $1,6 million in bank fees, and $55 million under the option. And note! NAK was required to pay an additional $155 million under the option by 2011. An interesting detail: a foreign company, Squire Capital Limited, registered in Cyprus six months before the restructuring began, participated in the process.
Yuriy Vitrenko also participated in the signing of a gas contract with Gazprom in 2009, which was disadvantageous for Ukraine. His role was to calculate an adequate price for the gas and work out all the terms of the deal. Ultimately, Ukraine received natural gas at a record price of $450. In this situation, Yuriy Yuryevich played into Vladimir Putin's hands. Yulia TymoshenkoBut no one could prove his guilt.
Yuriy Vitrenko. Playing for Big Stakes
After officially retiring from his job at Naftogaz and playing the civil servant game to his heart's content, Yuriy Vitrenko realized it was time to go into big business. In 2008, he became one of the heads of the Amstar Europe private investment fund, part of the international Amstar group of funds headquartered in Denver, USA.
The fund was involved in nothing more than land acquisition. In 2009, Amstar Europe acquired land plots totaling 54 hectares along the Kyiv-Zhytomyr highway (E-40) in the Kyiv region. The plan was to build a logistics center and a premium cottage community, Manor Springs Gated Community, there.
Manor Springs Gated Community, a premium cottage community
By the beginning of 2010, the fund’s Ukrainian portfolio included approximately 40 land plots.
In 2010, Yuriy Vitrenko decided to build his own business in corporate finance. He also remembered his friend Andriy Kobolev, who had just been fired from Naftogaz. Thus, the inconspicuous company AYA Securities LLC was born. Three years later, this company became notorious throughout Ukraine for its attempt to extort 3 billion hryvnias from creditors of the state-owned company Ugol Ukrainy. Skelet.Org I found out how it all began.
Let's return to 2005. Then, young specialists Vitrenko and Kobolev had just joined NAK and were learning the ropes. At the time, the monopoly was working closely with a firm called KPSM-Consulting, headed by a certain Vadim Ivanov from Moscow. Officially, the firm specialized in pipeline diagnostics and pipeline exploration. It's impossible to fully understand this area of activity. But if you decipher the acronym "KPSM," you get "combined porous mesh metal." This material is truly exclusive and essential for purifying liquids and gases from mechanical impurities.
Vitrenko and Kobolev propose a merger with Ivanov. Their first move is to rename KPSM Consulting to AYA Capital. To conceal their ownership, they list an offshore company in Cyprus, Nestras Holding, as a founder. Incidentally, this offshore company shares the same address as Leonid Yurushev's offshore company, Bonnlack Finance Limited.more about it: Leonid Yurushev. Arseniy Yatsenyuk's secret "sponsor"). The gang then "clones" AYA Capital and creates AYA Securities at the same legal address in 2006. Yuriy Vitrenko becomes the sole owner of the company and contributes 7,1 million hryvnias to the authorized capital. All other participants in the operation were relegated to the background: Vadim Ivanov became a "signatory," and Andrey Kobolev became the managing director and advisor. Yuriy Yuryevich himself claims that AYA Securities was only created in 2010. In fact, the unemployed Andrey Kobolev joined the firm in 2010.
In 2013, Vitrenko and his firm became famous in the case involving the state-owned company Ugol Ukrainy. Perhaps no other firm has ever acted so brazenly.
So, Ugol Ukrainy had been receiving loans from state-owned banks for many years. Oschadbank, Ukreximbank, Alfa-Bank, and others injected approximately 2 billion hryvnias into the company. The loans were issued with state guarantees. In 2011, Ugol Ukrainy stopped paying its loans, owing the banks 1,3 billion hryvnias. The banks filed a lawsuit, and only two years later were able to secure the seizure of the state-owned company's accounts. In 2013, the Ministry of Energy and Coal Industry announced the liquidation of the troubled enterprise. It became clear that no one was going to repay the banks. Then, the financial institutions received a "happy letter" from AYA Securities, offering to buy Ugol Ukrainy's debts for 30% of their face value.
This is a brilliant scheme to convert a state-owned enterprise's debt into private profit. The profit from the deal was expected to be 3 billion hryvnias. Yuriy Vitrenko was assisted by high-ranking officials: Eduard Stavytsky, the former Minister of Energy and Coal Industry, who signed the order to liquidate Ugol Ukrainy (more about it: Eduard Stavitsky: Where's the money, Eddie?) and one of the bankers close to the family of President Yanukovych.
However, the deal never took place. Maidan was to blame. Kobolev and Vitrenko quickly disavowed the Ugol Ukrainy scheme.
Yuriy Vitrenko. And again "Naftogaz"
Yuriy Vitrenko witnessed the outbreak of the Maidan in Austria at a meeting of the Ukrainian Ski Club. The news of the student dispersal shook him deeply, and he decided to come to Ukraine. Or perhaps Yuriy Yuryevich realized that the time had come to realize his potential.
As soon as Arseniy Yatsenyuk's government was formed, Andriy Kobolev was offered the position of head of Naftogaz. He accepted, and took on his boss, Yuriy Vitrenko, as his advisor, working a 25% salary. And from that moment on, reforms began.
The first thing the young Naftogaz team announced was "diversification." This means expanding the range of purchased and manufactured products, and reorienting the procurement and sales market. In Ukrainian realities, this roughly translates to "we won't pump gas from the aggressor country; we'll find another supplier." Kobolev stated that Ukraine, represented by Naftogaz, will continue to purchase some gas from Gazprom, and will obtain the rest through reverse flows from major European companies. As we understand, this ingenious idea was conceived by Yuriy Vitrenko.
European energy corporations such as E.ON, RWE, ENGINE (previously GDF SUEZ), and StatOil began to participate in supplying Ukraine with natural gas. TrailStone unexpectedly became the leading supplier. However, the supplier's gas price was clearly inflated. However, this was kept quiet because the average price was within the allotted limits.
Yulia Tymoshenko was the first to react. She stated that TrailStone was represented by Ukrainian citizen Pavel Levin, who has direct ties to the NAK management. Andriy Kobolev immediately defended the supplier, explaining that the founder of the European company has been operating in the gas market for 15 years.
But this turned out to be untrue. According to all available data, the "official" American TrailStone was registered in 2013, and not, as Kobolev claimed, "15 years ago." But the truth is different: it's not the American company that operates in the Ukrainian market, but the Berlin-based TrailStone GmbH. This company's information is hidden from the German legal entity register. It is only known that its main shareholders include residents of the Cayman Islands.
And the most interesting detail: the German company TrailStone was only accredited in 2014. So the gas trader is clearly a newcomer. Another fact that requires attention: Naftogaz announced that it would purchase gas from TrailStone two days (!!!) after it received accreditation. However, there was no mention of the actual purchase price. The transactions were not covered by the state procurement law, so the monopolist did not publish their monthly volumes or prices.
TrailStone had never traded gas. It learned of its mission after Vitrenko joined Naftogaz. Yuriy Yuryevich had known its director, Ante Pogačić, since his internship at Merrill Lynch in London. Incidentally, Pavel Levin, a TrailStone representative, had also left RWE and joined the gas trader relatively recently… just before Vitrenko's appointment.
In 2015, Arseniy Yatsenyuk announced that Ukraine would purchase more gas from TrailStone. As a result, the trader became the third-largest supplier to Naftogaz.
Unbeknownst to Kobolev, Yuriy Vitrenko, became the director of development for the NAK Naftogaz company. And a new scam erupts, this time involving Egyptian oil and gas fields.
In early 2015, reports surfaced that Naftogaz might lose its right to develop oil and gas fields in Egypt due to the refusal of the State Fiscal Service to replenish the authorized capital of Zakordonnaftogaz, a subsidiary of the National Joint Stock Company (NAK) Zakordonaftogaz, by 20 million hryvnias. This is a paltry sum given the scale of the oil production project in Egypt. Moreover, Zakordonaftogaz has no connection to the Alam El Shawish East field, which is under threat of closure. Production is handled by a joint venture, Petrosannan Company, established by Naftogaz and the Egyptian General Petroleum Corporation. However, Yuriy Vitrenko, determined to develop the business—not without reason, he holds the relevant position—and rashly devised a plan to remove the Alam El Shawish East field from Naftogaz's control and transfer it to Zakordonaftogaz. Thus, the profitable business is likely to end up in private hands. For now this situation has calmed down, but who knows how it will turn out in the future.
Yuriy Vitrenko also played a role in the scandal between Andriy Kobolev and Ihor Kolomoisky over a management change at Ukrnafta and its return to state control. As a reminder, until May 2015, 50% plus one share of Ukrnafta belonged to the National Joint Stock Company (NAK), and 43% belonged to companies affiliated with Ihor Kolomoisky's Privat Group. Although the state held a controlling stake, Kolomoisky's management completely controlled the company. Vitrenko and Kobolev failed to remove Ukrnafta's management, appoint an acting manager, or block the possibility of siphoning funds from the company. Instead, they allowed Kolomoisky to withdraw approximately 12 billion hryvnias from Ukrnafta between May and September 2015.
Yuri Vitrenko. Hobbies and Weaknesses
If Yuriy Vitrenko weren't a financier, he would have been an athlete. At least, that's the future his parents, Natalia and Yuriy Vitrenko, wanted for their son. As a child, little Yury was even sent to Dynamo Kyiv, where he trained with Andriy Shevchenko.
These days, Yuriy Vitrenko is actively racing down snowy slopes on alpine skis and has also taken a liking to golf.
Yuriy Vitrenko with his family
In February 2017, Yuriy Vitrenko announced that natural gas prices for households could increase by 40% starting April 1. Apparently, Yuriy Yuryevich was once again making calculations in his favor.
Arina Dmitrieva, for Skelet.Org
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