A former Ukrainian billionaire redefines the meaning of the term "serial entrepreneur." It turns out that sometimes they're paranoid and won't stop until they've squandered everything.
It would seem that after the spectacular bankruptcy of Finance and Credit Bank, Konstantin Valentinovich should have paused, reflected on what had happened, and drawn conclusions. But that's not the case with our Zhevago.
On March 31, a post appeared on Facebook by Andriy Artemenko, a member of parliament from Lyashko's Radical Party ( more about him in the article "Mafioso Andriy Artemenko. Dossier and biography of the scandalous Radical Party deputy" ). The following content was posted:
""Not for an hour…" This was the response from the distinguished Minister of Fuel and Energy of Ukraine, Volodymyr Demchyshyn, when I placed on his desk a draft memorandum on the creation of a consortium for the construction of an LNG terminal and the diversification of natural gas supplies to Ukraine from Qatar. So, Mr. Minister, we'll do without you and your corruption schemes and kickbacks. It's high time you were consigned to the dustbin of history. The initiative of private capital and the desire of the Qatari Minister of Energy and Industry to diversify consumers and expand into new markets have done their job, and we secured Qatar's consent to supply Ukraine with up to 5 billion cubic meters per year, which we discussed with the management of Ras Gas…
Some talk, and we do. Here's an example of the RPL's implementation of its economic program to pull Ukraine's economy out of its tailspin... And you talk about a coalition..."
For those unfamiliar, the man on the far left in this photo is Zhevago. Clearly, his satisfied face in this picture epitomizes that very "private capital initiative that did the trick" with Qatar's second-largest liquefied natural gas producer, RasGas Company (created 15 years ago by state-owned Qatar Petroleum and ExxonMobil).
We anticipate the indignant cries of Konstantin's many supporters: "Again, f...!" Indeed, even compared to his Ukrainian oligarch colleagues, Zhevago seems like some kind of fantastical optimist, ready to repeatedly resort to yet another "Panama" scheme abroad. Clearly, concluding agreements under conditions of poorly predictable hydrocarbon price dynamics, the absence of an LNG terminal in Ukraine, and the de facto ban on the passage of liquefied gas vessels through the Bosphorus is a mega-gamble.
Zhevago's business biography featured numerous such projects. The third quarter of 2013 was the most fruitful for such "projects."
Initially, in July 2013, Zhevago's Kerch-based Zaliv shipyard announced the signing of an agreement to purchase the shipbuilding division of Norway's Bergen Group ASA. For $18,2 million, Zaliv acquired a 51% stake in the newly created company. The Fosen and BMV shipyards, both owned by Bergen Group, will be transferred to this new company. Following the completion of the transaction, both shareholders jointly contributed 50 million kroner ($8,36 million) to the new company's working capital for further development. In addition, the company received approximately $40 million from Zhevago's entities to finance shipbuilding.
In early September of that year, Zhevago acquired VA Intertrading, a major commodities trader. VA Intertrading's founder and largest shareholder, Voestalpine Group (Ferrexpo has been a major supplier of iron ore to the Austrian concern's metallurgical plants for many years), announced the sale of a 38,5% stake in the trading company to entities belonging to a Ukrainian oligarch for "several tens of millions of euros."
In September of that same year, it was announced that Ferrexpo had acquired 15,5% of the Brazilian mining company Ferrous Resources, operating in the Minas Gerais iron ore basin, since January 2013. A total of $82 million was paid for this stake.
Ultimately, all these foreign investments went to waste. The purchase of the Norwegian shipyards became meaningless after the annexation of Crimea, which deprived Zhevago of control over the Kerch Bay and, consequently, any prospects for establishing production cooperation with the Bergen Group.
In the case of the acquisition of Brazilian Ferrous Resources, Ferrexpo was forced to write off half the value of this "investment"—$40 million. The British company's report cites the decline in iron ore prices as the reason for this investment failure.
The same crisis in the commodity markets also finished off the acquired Austrian trader VA Intertrading: it is obvious that it is impossible to make money in a stagnant market overflowing with cheap commodities.
It's curious that Zhevago clearly doesn't understand what's going on. A year ago, explaining his constant absence from Verkhovna Rada sessions as a member of parliament, Zhevago stated:
" I certainly don't participate in meetings where various appointments are made, which are often later criticized as being an agreement between factions, where someone is dividing things up, sawing things down. I don't want to be involved in that. I don't want to participate in meetings where populist issues are raised, which usually end in some kind of brawl or physical altercation near the Verkhovna Rada rostrum. I simply feel sorry for the deputies' time, which is paid for by taxpayers. I feel sorry for my time. There's a huge amount of work that needs to be done, completed, or started. Our (Ferrexpo) partners are numerous and deserve our attention for one simple reason: they improve the well-being of Ukraine and local territories, bring more foreign currency into the country, increase exports, and create more jobs. I want to spend the time that many deputies waste in the Verkhovna Rada building, arguing and brawling, on creating ."
Clearly, if Konstantin had remained quiet in the Rada and not engaged in "creation," it would have been cheaper not only for him but also for Ukrainian taxpayers. After all, according to NBU Governor Valeria Gontareva, of the total loan portfolio of the bankrupt Finance and Credit Bank of 27 billion hryvnias, 22 billion were issued to Zhevago's entities. Meanwhile, the bankruptcy of his bank will cost the Ukrainian budget almost 17 billion hryvnias: 10,4 billion hryvnias, which must be reimbursed to Finance and Credit clients through the Deposit Guarantee Fund, plus 6,45 billion hryvnias in refinancing funds, which Zhevago's bank received from the NBU and which can now be forgotten.
To be fair, Konstantin's current "project" is nothing like his previous ones. It's a real sure thing! After all, his partner here is the experienced Oleg Lyashko. For Zhevago, this is a unique opportunity to "have his cake and eat it too."
It's no wonder Lyashko has been buzzing for the past week about his alleged "golden share" in the new coalition he plans to form with the BPP and the People's Front. It's clear that Zhevago also wants to participate in this political coitus. After all, at stake today isn't just the collateral he so imprudently handed over to the NBU as a personal guarantee for the refinancing of Finance and Credit, but also, possibly, his personal freedom. And with such stakes at stake, any Qatar would do just to worm its way into the pro-government coalition.
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