What Pavel Fuks lost in Ukraine and what it will result in
What connections and schemes the SBU might uncover if they delve into his story
The Ukrainian law enforcement have reached the sanctioned russian investor Pavel Fuks. On Tuesday, 16 May, the SBU reported that over 240 properties and cars were seized from participants of a scheme linked to him. In addition, property rights and accounts of “101 companies involved in illegal activities and the claims rights on over 1600 repurchased bank loans.” Some of the seized assets have already been put under the management of Asset Recovery and Management Agency (ARMA). The suspects were accused of financial violations, including large-scale tax evasion. Mind looked into which of Fuks' assets are in question and who could have been a partner or competitor of this russian businessman in the struggle for control over the now lost property.
The strike on companies and individuals affiliated with Fuks proved so painful that, without wasting time on legal expertise, he retaliated the next day and accused officers of the Security Service of Ukraine (SBU) of conducting commercial activities in public service. "The SBU statement is solely related to the personal economic interest of certain individuals in the leadership of the SBU and other structures," Pavel Fuks said on his Telegram channel.
Suspicious neighbourhood: Why should one buy something near Poroshenko's offices?
On the surface of Pavel Fuks's turbulent business in Ukraine lies one historical failure: in 2009–2012, through his partner russian real estate offshore moscow City (MosCityGroup Ltd), he undertook to implement a similar skyscraper project on the Rybalsky peninsula in Kyiv.
The construction project of a unique “cloud droplet of moscow” in the Ukrainian capital was named Kyiv City. This russian investment project then had influential neighbours and landowners: Defence Intelligence of Ukraine, General Staff, Armed Forces of Ukraine and several enterprises of Petro Poroshenko – the Kuznia Na Rybalskomu factory, the Fifth Element sports club etc.
Over the long period of project implementation at Rybalsky, attempts were made to negotiate with the peninsula neighbours about “consolidation” of their plots. On what terms the structures of the former President of Ukraine agreed to “consolidate” in favour of Fuks and his partners is unknown. However, attempts to evict the Ukrainian military intelligence from the centre of the Ukrainian capital were quite public and led to criticism from the media.
The russian press at that time claimed that Pavel Fuks's partners in moscow City were the daughters of former president Boris Yeltsin – Valentina and Tatyana. Their investments in a bundle of skyscrapers in moscow were managed by Fuks, who was also looking for clients to rent business centres.
In the ultimately failed Ukrainian project Kyiv City, Fuks was also not an independent figure. The key investor was Prime Asset Capital, an offshore group of russian investor Vladimir Tatarchuk, a board member of Alfa Bank. Fuks and Tatarchuk together owned the oil and gas company Proxima Capital Group and the retail network RosAgromarket.
Sectoral press at that time assumed that Tatarchuk and Fuks, through the British JKX Oil&Gas by power of attorney of anonymous third parties from the russian federation (there are no reliable facts that it's about anyone from the Yeltsin family), controlled a significant Ukrainian industrial asset – about 20% stake in the Poltava Gas and Oil Company (PGNK) extraction company, which was is of the largest private enterprises in Ukrainian oil and gas extraction.
Golden Derrick: “Do you like assets? No. But the very process of reselling...
After the Kyiv City project was deemed a failure, the Ukrainian press began to highlight another asset affiliated with Pavel Fuks in Ukraine – the offshore oil and gas extraction company Golden Derrick Ltd., which was renamed to East European Petroleum (EEP) during its operation. Like PGNK, it is among the top five leading Ukrainian producers of natural gas and oil condensate (raw material for the LPG car fuel production). And it certainly could not fail to attract the interest of the SBU.
Over a relatively short period, in 2009–2011, this company grew rapidly and became perhaps the largest of the private extraction companies in our state. During this “finest hour” it even outperformed Viktor Pinchuk's group of companies and Igor Kolomoisky's Privat group.
The peak of EEP's prosperity coincided with the period when the Ministry of Ecology and Natural Resources, which issued special permits for deposits, was headed by Eduard Stavytsky-Rosenberg. After being dismissed from his position, this former minister moved to Israel – a country that does not extradite fugitives to anyone. And from there, he began to transmit statements to the media that he had nothing to do with Golden Derrick Ltd. Except that he may have heard about it by chance...
The Ukrainian press voiced versions that Stavytsky-Rosenberg's affiliated offshores sold founding shares in the capital of Golden Derrick Ltd to offshore companies of Sergiy Kurchenko's Vetek group at the beginning of the company's build-up. Kurchenko's supporters denied this transfer of ownership. According to other data, the founders of Vetek had the task of organising a large-scale migration of capitals from the russian federation and Ukraine to Europe, and therefore contributed to the “Europeanisation” of the Golden Derrick Ltd brand. So that instead of the too “Klondike”-like name, this company began to bear a name that was more acceptable to the European ear – East European Petroleum.
In the second stage of asset development, the controlling stake in the capital of Golden Derrick Ltd. moved from “Young Donetskers’” offshores orbiting Kurchenko to the wealthiest Moldovan oil and gas magnate Anatol Stati. He lived in moscow for a long time and had dual citizenship of Moldova and the russian federation. Stati is the only person who has publicly acknowledged ownership over Golden Derrick Ltd./EEP.
After all these ownership transitions, at the final third stage of EEP's development, full control over it began to be bought out by companies that, according to press data, were directly affiliated with Pavel Fuks. It's worth reminding that, just as in the episodes with Stavytsky-Rosenberg or Kurchenko, Pavel Fuks completely denies any relation to the EEP Ltd. oil and gas company. He has heard of it, but nothing more.
Two obvious details can be seen without delving into the complexities of this company's asset development. The first one: almost all the named asset owners, except for Anatol Stati, have denied and continue to deny their involvement with EEP. And the second, even more important detail: all the mentioned investors, except for the same Stati again, are focused primarily in real estate and trade in their business careers, not in the extraction of energy resources, which was what the EEP Ltd company was engaged in.
Unlike the retailers and traders, Stati, through Casco Petroleum Overseas Ltd and his Ascom Group, conducts oil and gas extraction in quite risky areas – the politically unstable Kurdish sector of the Republic of Iraq and in the Republic of South Sudan. Until recently, the Ascom Group owned quite powerful industrial assets in the Republic of Kazakhstan. All other investors, whom the press episodically attributed control over EEP Ltd., did not have similar industrial assets.
What will the arrest of Fuks' assets result in?
The Moldovan press asserts that Anatol Stati has friendly partnership relations with Vladimir Plahotniuc – Moldova’s most famous oligarch and ex-president of Ukraine Petro Poroshenko’s long-time companion. Among other things, Plahotniuc is known for supporting the local pro-moscow Șor party. Therefore, one can see a rather clear plot line in the property vicissitudes around the owners of Golden Derrick Ltd.
Either in the case of Fuks' failure with the Kyiv City project, or in the episodes of the development of Ukrainian oil and gas assets, a certain cyclical nature of his strategies is observed, focusing on the figure of the former Ukrainian president. The one who had the power and authority to resolve a host of issues regarding Golden Derrick Ltd.
Such issues, for example, as whether or not to allow ex-minister Eduard Stavytsky, who was involved in the company's licences, to leave Ukraine. Or whether to physically eliminate Sergiy Kurchenko's companies GazAlliance and VneshTorgService in the economy of certain areas of occupied Donbass.
Whether the current government will unravel Fuks' connection with Poroshenko, time will tell. But it's obvious that FCA Partners, which manages the assets of the Kyivsky Сlosed Undiversified Venture Fund, where Pavel Fuks is a beneficiary, or his share in Kolomoysky and Khomutynnik's Ukrnaftoburinnia gas producing company, which has been seized and transferred to ARMA, were unlikely to be the final goal of the SBU. Although getting rid of a russian oligarch on Ukrainian territory is always pleasant.
If you have read this article to the end, we hope that means it was useful for you.
We work to ensure that our journalistic and analytical work is of high quality, and we strive to perform it as competently as possible. This also requires financial independence. Support us for only UAH 196 per month.
Become a Mind subscriber for just USD 5 per month and support the development of independent business journalism!
You can unsubscribe at any time in your LIQPAY account or by sending us an email: [email protected]
