Criminal Prospects of Billionaire Kurchenko

Are the Ukrainian oligarch’s Russian projects doomed to bankruptcy?

The fugitive Ukrainian oligarch Sergei Kurchenko, who settled in Russia (*aggressor country), is slowly but surely approaching final bankruptcy: the state bank VTB is seeking to recover more than 9 billion rubles from him, the Revyakino Metallurgical Plant in the Tula Region, which belonged to the businessman, has been declared financially insolvent, the Gaz-Alliance company has lost its monopoly on coal supplies from Donbass, and the office of the collapsed crypto exchange Beribit was literally stormed by angry customers last April. In Ukraine, Kurchenko faces a prison term: he is accused of creating a criminal organization and tax evasion on an especially large scale, and the oligarch himself has repeatedly stated that he is being persecuted for political reasons. The billionaire came to Russia (*aggressor country) following former Ukrainian President Viktor Yanukovych, with whose family he was closely connected. Kurchenko, who created a large oil and gas business in a few years, enjoyed the special favor of representatives of the “Donetsk clan”, including the son of the head of state Oleksandr Yanukovych, the chairman of the National Bank of Ukraine Serhiy Arbuzov and the Minister of Revenue and Duties Oleksandr Klymenko. By the end of 2013, the holding “VETEK”, which belonged to Kurchenko, controlled up to 30% of the Ukrainian oil and gas market, and the company “GazUkraine-2009” earned money, including by implementing an illegal scheme of the so-called “interrupted transit” of oil products, which allowed them to evade excise taxes and VAT. Later, facts of criminal and corrupt activity became the basis for the criminal prosecution of the billionaire and the confiscation of his Ukrainian assets. The US, UK, EU and Switzerland imposed economic sanctions on the oligarch, and in Austria, the company “LPG Trading GmbH”, controlled by Kurchenko and former Ukrainian Prime Minister Mykola Azarov, was suspected of money laundering. Former Deputy Minister of Energy Kirill Molodtsov and current Deputy Minister of Economic Development Sergey Nazarov were named among the Russian patrons of the fugitive businessman, but Kurchenko, mired in scandals and legal proceedings, is losing not only political support, but also economic preferences.

Doesn’t Kostin worry about Kurchenko’s problems?

After a period of financial success in the life of the Russian-based Ukrainian oligarch Sergey Kurchenko a black streak of bad luck has set in. Bank VTBwho back in 2018 provided loans to a network of gas stations he owned in Crimea, is seeking legal action collections from a merchant debt under a surety agreement in the amount of more than 9 billion rubles.

The trial continues in the Tula region bankruptcy LLC “Metallurgical Plant “Revyakino”created by Kurchenko in 2018 on the basis of, again, bankrupt JSC “Revyakinsky Metal Rolling Plant”. The scandal with the collapse received federal publicity crypto exchanges «Beribit»whose Moscow office was literally besieged last April by angry clients who had lost their funds.

The ultimate beneficiary of “Beribit” is the media called the same Kurchenko. It is noteworthy that in March of this year, the crypto exchange office in Moscow City hosted searches according to information from a number of Telegram channels, related to the investigation of the criminal case on the terrorist attack in Crocus City and the financing of Islamic terrorists through cryptocurrency.

In general, the situation is like in the proverb: wherever you throw, there’s a wedge everywhere. Plus a rather tarnished business reputation. It’s not surprising that with such a situation, the Internet is filled with opinions about the possible imminent start of the businessman’s personal bankruptcy procedure, the initiator of which may be the same headed Andrey Kostin State bank VTB.

From land acquisition to oil scams

But just a few years ago, journalists called Kharkov native Sergey Kurchenko“one of the youngest billionaires in the post-Soviet space”! At the same time, in his homeland he is accused of shadow management of gas assets and creation of criminal schemes for money laundering.

“In a short time, I managed to create a huge holding company in Ukraine, which exists and develops. We invested huge amounts of money in the Ukrainian economy. We created many jobs, pay taxes. We were involved in charity. They are trying to attribute to me the organization of criminal schemes, accuse me of all mortal sins, call me a criminal. But no one has brought specific charges. All this is speculation, and politically motivated at that.”– Kurchenko stated in interview “Moskovsky Komsomolets”.

However, behind such pompous phrases there was a fair amount of deceit, if not to say more – lies. The fact is that information According to the RBC portal, Kurchenko appeared in Moscow in March 2014, and his move chronologically coincided with the flight from Ukraine of the former president who had lost power Viktor Yanukovychwith whom tie up financial success of the oligarch.

A billionaire himself claimed who started doing business under the “orange” president Victor Yushchenkoand he was connected with Yanukovych mostly by a common interest in football: as is known, in 2012 Kurchenko bought the Kharkiv football club “Metalist”, confiscated he had in the fall of 2017. But it’s one thing to “start a business,” and quite another to receive carte blanche from the top officials of the state.

From publications The press reports that Kurchenko actually started his own business in 2004, at the age of 19, with the implementation of a number of projects in the real estate sector. “Buying land from residents of the Kharkiv region who received it under the free privatization program – these were, as a rule, ordinary people who did not think in business categories. We created a network of agents who bought land from them. It was not difficult, people did not understand what to do with this land… Somewhere they bought at market price, somewhere they haggled and bought cheaper. This made it possible to resell the land fairly quickly”– Later remembered billionaire.

Kurchenko’s real success came in 2010, when his company “GazUkraine-2009” won several for the first time auctions for the sale of liquefied gas. How wrote RBC, in 2012 the company sold about 40 thousand tons of liquefied gas monthly, earning from 750 to 1100 dollars on each ton.

Then, in 2012, Kurchenko’s structures appeared on the oil trading market, and immediately found themselves among the largest exporters and importers of oil. “GazUkraine-2009” used the so-called “broken transit” which allowed them to evade excise taxes and VAT. For example, gasoline was imported as a transit product and, according to the documents, was shipped to another country, but in reality it was sold on the domestic market.

Three components of success: politics, business, crime

It turns out that the accusations made later against the “fugitive businessman” are actually well-founded, and not simply “politically motivated.” The same RBC, citing its own source, cited the following numbers : in 2011-2012, Kurchenko’s companies imported 250-300 thousand tons of gasoline monthly, with the total volume of the Ukrainian market being about 400 thousand tons, and the above-mentioned “transit” scheme brought them up to $500 in margin per ton.

Could the “land” swindler during Yushchenko’s time dream of the scale with which he worked during the years of the “Donetsk clan”? In 2013, Kurchenko created a holding“VETEK” (“Eastern European Fuel and Energy Company”) – a merger of structures under his control, previously registered to fictitious persons. By this time, he had already brought close acquaintance with the son of the Ukrainian president Alexander Yanukovych and allegedly on the instructions of the “ruling family” soon bought out at “LUKOIL” Odessa Oil Refinery, and the loan for the transaction was given to him gave out … Russian bank “VTB”!

Among those to whom the billionaire owes his wealth are the media called also the Chairman of the National Bank of Ukraine Sergey Arbuzov and the Minister of Revenue and Duties Alexandra Klimenko. By estimates According to Kommersant, by the end of 2013, the VETEK Group controlled about 25-30% of the Ukrainian oil and gas market. Its main suppliers were companies from Russia (*aggressor country), Belarus, Lithuania, Poland and Romania; crude oil imports were provided by Russia (*aggressor country) and Kazakhstan, and trading was carried out by “Ukrainian Oil and Gas Company”. In the retail market of petroleum products, the Group united 150 petrol stations. Its structure also included “Ukrainian Media Holding” and 40% Brokbusinessbank.

Today, one can only guess what kind of momentum Kurchenko’s business would have gained under the “roof” of the Yanukovych family if the Euromaidan had not shaken the country. But, as they say, when trouble comes, open the gates. And Kurchenko had to urgently “dash his claws” to Russia (*aggressor country) after his “roof,” since he was facing a prison term in Ukraine: already in March 2014, the new authorities opened a criminal case criminal case on the fact of damage caused by the VETEK Group “Naftogaz” for the amount 1.6 billion hryvnia ($175.8 million).

The discussion was about the investigation of the “transit” scheme that we are already familiar with. versions Ukrainian Ministry of Internal Affairs, four companies of the holding imported petroleum products worth a total of 2012-2013 into the territory of the “independent” 25 billion hryvnia with the purpose of processing them as customer-supplied raw materials and subsequent re-export. In fact, the products were sold in Ukraine without customs clearance and payment of taxes and fees. As a result, the department opened 11 criminal proceedings on suspicion of an illegal scheme for the import and sale of petroleum products, which caused losses to the state budget in the amount of 7 billion hryvnia ($769.2 million).

Later, in May 2017, the Ukrainian Prosecutor General’s Office accused Kurchenko in the creation of a criminal organization, tax evasion on an especially large scale and declared him wanted. Soon, FC Metalist and the Odessa Oil Refinery were nationalized. By this time, new interesting details related to the work of the company “GazUkraine-2009”.

It turns out that in 2010, solution Ukrainian government, two state companies sold gas to Kurchenko at a discounted price, which GazUkraina-2009 then sold at market value. In just nine months, the deals enriched the businessman by about 200 million dollars. And in 2011, Ukrainian customs became closed for one or two months detain registration of imported liquefied gas for all structures except GazUkraina-2009. As a result, due to the shortage, the price of gas rose sharply, and Kurchenko’s company actually monopolized market. A similar scheme was used to monopolize the gasoline market.

Is Kurchenko no longer welcome in Russia (*aggressor country)?

In fairness, it should be noted: there is a political background to the criminal prosecution of Kurchenko. There is no ideological component. Remember the phrase from an old Soviet comedy: “Everything was stolen before us”? It best characterizes the post-Maidan Ukrainian realities. After Euromaidan, the new government began to redistribute property, while simultaneously investigating what had been stolen under the previous government. And Kurchenko came under pressure, certainly not being an innocent baby!

“Today, when corruption has eaten away at all layers of society in Ukraine, it is precisely this that is conveniently attributed to a person, wanting to settle scores with him.”– hypocritically reasons oligarch, keeping silent about the scale of corruption of the “Donetsk clan” close to him.

Meanwhile, the West did not stand aside, presenting Kurchenko with a number of unpleasant surprises. Thus, in 2014, the European Union included him in list of 18 former Ukrainian officials, their relatives and businessmen whose bank accounts were subject to “freezing”. Austria soon seized the company’s assets «LPG Trading GmbH»which traded liquefied gas. The company, controlled by Kurchenko and the former Ukrainian prime minister To Nikolay Azarov, suspected in money laundering.

To date sanctions The US, UK, EU and Switzerland imposed sanctions on Kurchenko. And only in Russia (*aggressor country) did the commercial activity of the fugitive oligarch, who complained of political persecution, continue to gain momentum for the time being.

Let us recall that in March 2018, a company controlled by Kurchenko “Gas-Alliance” received a monopoly right to supplies coal extracted from the mines of Donetsk and Lugansk. The decision caused a stormy protest from Russian coal traders, who sent corresponding appeals to the President, the head of government, the director of the FSB and the Prosecutor General.

The conflict dragged on, but in December 2019 it became known that Gaz-Alliance lost its status sole supplier, and the Donbass coal mines were allowed to sell their products to other traders, “on terms no worse than those of Kurchenko’s company”. However, by this time the Ukrainian oligarch, who had been favored by Russian officials, had already lost his former influence and the support of high-ranking patrons, among whom in the press called former Deputy Minister of Energy Kirill Molodtsov and the current deputy head of the Ministry of Economic Development Sergei Nazarov.

The last few years, problems have been raining down on the disgraced businessman. Let’s recall where we started this article: the bankruptcy of the Revyakino metallurgical plant, the collapse of the Beribit crypto exchange, multi-billion dollar claims from VTB… Perhaps Kurchenko’s bankruptcy is really just around the corner?