Публікація

Kings of Ukrainian Gas

Our investigation began with a scandal. In order to find out who has been receiving the largest gas deposits during Yanukovych’s presidency, we sent a request to the State Service of Geology and Mineral Resources. The official response of Derzhgeonadr was somewhat unexpected. The list of companies that was returned to us included only state entities. But … no private ones or persons. It looked suspicious. We had already been approached by our colleagues from the “Ekonomichna Pravda”, who had sent the same question to Derzhgeonadr. But they got a response, which stipulated that, besides the state, there were many private organizations listed among the owners of gas deposits.

Why did Derzhgeonadra suddenly begin to conceal information about the private owners of Ukrainian gas deposits? Previously, journalists sometimes didn’t even receive a response to their requests. But, presenting falsified documents instead of an outright refusal … this was the very first time that such a thing had happened!

Iryna Zheleznyak, the Derzgeonadr employee, who had prepared the response to our request, refused to explain why the document had been falsified. She advised us to get in touch with the management. Unfortunately, Oleksandr Sushko, the director of the company, couldn’t find time to comment on this regrettable incident.

As “Slidstvo.Info” soon discovered, Mr. Sushko has a reason for withholding this information. Before he was appointed to Derzhgeonadr, he was the director of a company belonging to one of the players of our investigation. A company, which had been allocated an incredible number of gas deposits over the last year. (Read more about this in the second part of our report).

- “You’re wasting your time waiting for them to answer”.- told us the head of a department at the State Service of Geology and Mineral Resources in a private conversation- “As soon as Stavytsky was appointed Minister of Environment and Natural Resources, we were ordered to conceal all information on reserves and owners of gas deposits as much as possible. Moreover, even if you get true information officially, you actually cannot use it.”

- Why?

- “Because totally different persons and companies are really behind the official owner. For example, Oleksandr Yanukovych, the President’s son doesn’t get licenses for his company directly, but through the Zasyadko mine. And that’s the way it is with many gas deposits – it’s not easy to find who the real owner is, but all paths seem to lead upward towards the top.”

As we had failed to get true answers from this state institution, we tried to find them by ourselves. Who has received the most gas deposits in two and a half years of Yanukovych’s rule? Whose names is Derzhgeonadr hiding so carefully? We decided to start with the President’s son.

Quid pro quo” (One good turn deserves another)

The director of a large enterprise in the Donbas Region, personally acquainted with Yukhym Zvyahilsky, states that a year ago he spoke with the eternal chief of the Zasyadko mine.

- You see, Yukhym has a dream: he’s still alive and in power, so he wants to privatize the Zasyadko mine. Well, Yukhim told me the following: “I visited the Tsar (Viktor Yanukovych – auth.). He doesn’t mind me privatizing the mine. But, the Tsar said: Put the gas deposits in your name, and hand half of them over to Oleksandr (Yanukovych’s son – auth.). Then we’ll give you the mine”.

 

For some time now, Yukhym Zvyhilsky has been thinking about privatizing the Zasyadko mine

Exchanging a state-owned company for gas resources and presenting it as a gift to your family – such a story is in the spirit of current Ukrainian reality. Even worse, it’s been confirmed by a lot of evidence. This means that Viktor Yanukovych and Yukhym Zvyhilsky may well be accused of taking possession of public property through abuse of official capacity.

Let’s look at the hard facts:

On November 19, 2010, the State Property Fund of Ukraine approves Order No.1710 on the privatization of the O.F. Zasyadko mine.

A month later, on December 22, 2010, the government approves a decision to hand nine oil and gas fields in Eastern Ukraine to the Zasyadko mine without organizing tenders.

“Slidstvo.Info” discovers that the Zasyadko mine gave four of these nine fields to an unknown company in Donetsk called Inter-Regional Gas Company LLC.

This is how it happened: In 2011, the Zasyadko mine contributed 25 thousand UAH to the authorized capital of Inter-Regional Gas Company LLC. Having become a member of the founders, the mine could transfer its licenses for exploration and gas extraction to this obscure company. Information about this matter is recorded on the balance sheet of the O.F. Zasyadko Mine PJSC, which can still be found on the website of this coal company.

Industrial ownership                                                                               126,340        47,010        79,330Right of usage/land rental                                                                        16,642          1,526        15,116Other non-material assets                                                                            971             769             202According to Order No.1387 dated 25.11.2011, the annual inventory of non-material assets was conducted during the reporting period, before the annual report of the Company.

2.Financial investments

During the reporting period, the value of long-term financial investments increased thanks to:                                  -a contribution to the authorized capital of State Enterprise, Ahrofirma Shakhtar – 5,160 thousand UAH;                     -a contribution to the authorized capital of Private Joint-Stock Company, Kramatorsky Myasopererobny Zavod – 25 thousand UAH;                                                                                                                                                             -contribution to the authorized capital of Inter-Regional Gas Company LLC – 25 thousand UAH;                                    As of 31.12.2011, the balance sheet of the Company lists the following financial investments:

Name of issuers                                         Date of commissioning                                          Value, thousand UAH        -Which are listed as participants in the capital of other enterprises:                                                                  CJSC Kramatorsky Myasopererobny Zavod            06.1997                                                   8,164                          CJSC Slavmoloko                                                     07.1997                                                 11,557                           OJSC Slovyansky Kombikormovy Zavod                03.1998                                                       3,292                        LLC Slovyansky Kombinat Myasoproduktiv          01.2002                                                      42,042                          LLC NIO ENERGOMETAN                                   02.2010                                                              7                          KSP Svitanok                                                        12.1997                                                           274                          JV Ahrofirma Stepove                                           01.1998                                                           449                          JV Kramatorske                                                    12.1997                                                           126                          JV Ordzhonikidze                                                 12.1997                                                         1,106                          JV Ptytsia                                                             10.1998                                                         1,656                          JV Kolos                                                               12.1997                                                            527                    

Evidence of a partnership between O.F. Zasyadko Mine and Inter-Regional Gas Company LLC can be found on the balance                   sheet of the mine

We managed to find Oleh Kushch, Director of Geological Service in Inter-Regional Gas Company LLC, who said that the company was currently working in the Serbska, Zolotarevska, Syrotynska, and Nyzhnortyshchivska fields (Luhansk and Kharkiv Regions).

These four fields appear on the list of nine fields that were previously transferred to the Zasyadko mine by the Cabinet of Ministers. The remaining five are being developed by the mine itself, a fact that was corroborated by Boris Bokiy, Deputy General Director of the Zasyadko mine.

This means that by the end of 2010, the government had handed nine fields to Zasyadko mine, and the mine then transferred four of them to Inter-Regional Gas Company LLC in Donetsk in 2011.

The final link in the chain of operations called “a mine in exchange for natural deposits” was to remove the mine as state-owned property. This is what actually happened on July 22, 2011.

A question arises: Who is the owner of Inter-Regional Gas Company LLC, which received four gas fields from the famous mine?

The founder of Inter-Regional Gas Company LLC is Gasinvest-Group LLC, which was in turn founded by SL-Group LLC. This “matryoshka” game finally ends at Eduard Slynko, who is the principal owner of SL-Group LLC.

Series AA                                                                                                                                                  No.009078UNIFIED STATE REGISTER OF LEGAL ENTITIES AND PERSONS-ENTREPRENEURSIn accordance with Article 20 of the Law of Ukraine “On state registration of legal entities and persons-entrepreneurs”, and the request dated 24.07.2012, No.14332600 from 24.07.2012, and in compliance with the following criteria:Identification code: 38220430

information will be given out from the Unified State Register of Legal Entities and Persons-Entrepreneurs  (USR) in the form of 1 notation:

Notation 1

Complete name of legal entity and abbreviated form, if any: LIMITED LIABILITY COMPANY “SL-Group”, “SL-Group” LLC

Complete name and abbreviated form, if any, in English:  no available data

Registration number of legal entity in USR: 10104763527

Identification code of legal entity in USR: 38220430

Location: 138A Artema Str., Kyiv District, Donetsk, Donetsk Region, 83004

Director of legal entity and authority: EDUARD OLEKSANDROVICH SLYNKO (in accordance with  the Charter)

Managing the reorganization of the company: no available data

Data on the volume of authorized capital (authorized or collected capital) and date of its final formation: 20,000,000 UAH, 27.04.2013

Central or local executive authority, administering the public company, or share of the state in the authorized capital of the legal entity, if this share amounts to at least 25 percent: no available data

List of founders (members) of the legal entity: EDUARD OLEKSANDROVYCH SLYNKO, 9 25-Richya RSChA Prospekt, Apt.17, Voroshylovsky District, Donetsk, Donetsk Region, 83001; contribution to authorized capital – 19,980,000 UAH; SERHIY VOLODYMYROVYCH VORONKOV, 27 50 Hvardiyskoyi Dviziyi Str., Apt.10, Kalininsky District, Donetsk, Donetsk Region, 83052; contribution to authorized capital – 20,000 UAH;

 

                                                     

 

This resident of Donetsk is a Deputy of the Donetsk Regional Council, representing the Party of Regions, and… moonlighting as General Director of Management Assets Corporation (“MAKO”).

Site page: Donetsk Regional Council (official site)

Deputy of Donetsk Regional Council, 6th Convocation (elections of 31.10.2010)

SLYNKO Eduard Oleksandrovych (short biography)

Date of birth: February10, 1967; Place of birth:_______; Date of election: October 31,2010; Elected: according to party list (Party of Regions); Party: Party of Regions; Education: Higher; Place of work: General Director of Management Assets Corporation (circled in red); (on the right) Party of Regions, member of the Commission for Environment and Mineral Resources

“MAKO” is the cornerstone of Yanukovych’s family business. The owner and president of the corporation is the President’s son – Oleksandr. Earlier, Oleksandr Yanukovych and Eduard Slynko founded Donsnabtara LLC, where one of the founders to keep them company was Valentyna Arbuzova, the mother of Serhiy Arbuzov, Director of the National Bank of Ukraine. Moreover, one of Eduard Slynko’s favourite hobbies is guns.

 

But now Mr. Slynko will have less and less time to enjoy his hobby. After all, the President’s son has big ambitions in the gas business. Four gas fields, obtained without tenders – this is just the beginning. In May this year, Inter-Regional Gas Company LLC received the Baranykivska field free-of-charge from the Luhansk Regional Council for exploration and extraction of gas. According to our sources, the company, closely associated with Oleksandr Yanukovych, will soon get five more licenses.

 

Page : (from left to right, top to bottom): GAS BUSINESS BELONGING TO YANUKOVYCH’S SON, Picture of Oleksandr Yanukovych, Inter-Regional Gas Company

KHARKIV REGION (left): Bohodukhiv, Kharkiv, Vovchansk, Chuhuyiv (5), Kupyansk, Izyum

3 billion m3 (approximate amount of natural gas reserves)

LUHANSK REGION (right): 4, 2, 3, Stakhanov (1), Luhansk, Alchevsk, Krasny Luch, Antratsyt

Gas fields: 1. Serbska; 2. Syrotynska; 3. Zolotarevska; 4. Baranykivska; 5. Hyzhniortyshchivska

           Investigation: “Slidstvo.Info” Design: Ukrainian Media Service

Important question: Which natural gas reserves are now controlled by the President’s family? It’s obvious that the answer to this question can be provided by Inter-Regional Gas Company LLC. But, the director of this company, Serhiy Voronkov, categorically refused to talk about it. He was particularly angered by our questions concerning the owner of Inter-Regional Gas Company LLC:

 - “Every person has the right to enjoy some semblance of privacy! The company also has a right to privacy! I’m not obliged to tell you about the owners. You’re asking me questions about information that should never be disclosed!”

However, our sources in the Ministry of Environment gave us information on the forecast value of reserves attributed to the gas company, which is closely linked to the President’s son:

- “There are about three billion cubic meters of gas in these fields. That’s not much.”

- So, why is Yanukovych’s son so interested in them?

- “There are no good specialists in his company! Or else they themselves may not know that this is a poor gas field. Or else they know it for a fact, but don’t tell him the truth. And he believes them!”

We know that Oleksandr Yanukovych cannot be considered an outstanding businessman; we’ve heard that repeatedly from different sources. The situation in the gas market partly confirms this assertion. In fact, the tastiest and largest morsels (gas fields) were obtained not by the president’s son, but by a more experienced businessman – Ihor Kolomoisky.

“Derypon’s” largest deposits

The international scandal involving the largest Ukrainian gas field – Sakhalinska (Kharkiv Region) ended when Derzhgeonadr recently registered it with Ukrnaftoburinnya. The media has always linked this company to Mykola Zlochevsky, former Minister of Environment and Natural Resources.

When approached by “Slidstvo.Info”, the Public Information Department of the National Security and Defense Council of Ukraine, where Mr. Zlochevsky currently works, refuted this information. Moreover, the department flatly denied that Mr. Zlochevsky was involved in two other companies, which had received eight exploitation licenses over the past year and a half, namely Pari LLC and Esko-Pivnich LLC.

Mykola Zlochevsky used to be a gas magnate

However, Pari and Esko-Pivnich actually belonged to Mykola Zlochevsky and his deceased partner, Mykola Lisin some time ago. They controlled them through a Cypriot company – Burisma Holdings Limited. The website of the US Securities and Exchange Commission still mentions it.

But, Burisma changed owners last year: instead of Zlochevsky and Lisin, the company was taken over by a Cypriot off-shore enterprise called Brociti Investments Ltd. Pari and Esko-Pivnich also changed their address: they moved from Kateryny Bilokur Street to 10a Rylyeyeva Stree in Kyiv. A third company was already waiting for them in the same building – the above-mentioned Ukrnaftoburinnya.

If these three companies were brought together under one roof, it’s logical to assume that they were all owned by one person. At least “Slidstvo.Info” managed to find out the name of the owner of Ukrnaftoburinnya. According to the SMIDA state system, 90% of Ukrnaftoburinnya is owned by a Cypriot company, Deripon Commercial Ltd. With the help of our colleagues from the International Fund OCCRP (Organized Crime and Corruption Reporting Project), we learned who “derypons” the largest gas field in Ukraine.

In fact, the end owner of Deripon Commercial Ltd. is a company based in the British Virgin Islands – Burrad Financial Corp. This company has often been involved in various financial schemes of the Privat Group and especially with Ihor Kolomoisky.

 

The founder of Deripon Commercial Ltd. is a company orbiting around Ihor Kolomoisky

 

Ihor Kolomoisky controls three private gas companies (Photo-Ukrayinska Pravda)

 

The owners of Ukrnaftoburinnya, Pari, and Esko-Pivnich were finally confirmed through first-hand sources. Oleh Kanivets worked as CEO of Ukrnaftoburinnya for two years. He confirmed who actually controlled the above-mentioned companies to “Slidstvo.Info”.

- The Privat Group is the immediate owner. This company was founded by Mykola Zlochevsky some time ago, but he later sold his shares to the Privat Group.

Thus, Ihor Kolomoisky managed to seize the largest reserves of natural gas in Ukraine. But, given the appetite and possibilities of his business rivals, Kolomoisky will not last as a leading player for very long. Read a more detailed account in the second part of the investigation.

Dmytro Hnap, Anna Babinets, “Slidstvo.Info”, August 14, 2012