Unfulfilled budget lines – Privatisation

January 14, 2018

One of the trademarks of recent years has been the overly optimistic expectations of the Ukrainian leadership in relation to privatising State Owned Enterprises (SOEs) that have historically been grant and subsidy black holes, mismanaged, wasteful and overly bureaucratic, often hindered by minority shareholding oligarchs, or with supply chains overflowing with oligarch companies, many adding no value but rather acting as a siphon to extract funds.

A recipe for rampant corruption of course.

For example, for the fourth time, Odessa Port Side is scheduled for privatisation in February 2018.  All previous attempts have failed to attract any real interest – which is hardly surprising when there are issues of $527 million to oligarch in exile, Dmitry Firtash.  Even if such a debt was not prohibitive, there is perhaps the “association” issues for any buyer when in purchasing this industrial plant, of having paid such sums to Mr Firtash who is currently wanted by the US for corruption.

Further, to be blunt, this industrial plant probably has an “on the books” value less than that of the Firtash debt.  In the current global market place, a sale price of approximately $350 million is probably there or thereabouts – without any outstanding debts.

Who will buy it in February?  The circumstances surrounding the sale and the contractual conditions of sale have not changed from the numerous previous attempts to find a buyer.

Further, as Prime Minister Groisman acknowledges, there are legislative issues to swiftly resolve.  The Prime Minister expects the adoption of a relevant legislation on privatization that will “unfreeze” the process. “Now we are ready for a new step – the adoption of the law on privatisation.  I think that we have worked well with the parliamentary committee and have reached a balanced solution.  I very much hope that we will be able to make the necessary decisions within January, possibly next week.” 

The 2018 budget foresees a very ambitious UAH 22.5 billion from privatisation – particularly ambitious considering that the previous years privatisation revenues have not come anywhere close to achieving budgetary expectations.  How seamless the process will become after the adoption of any new legislation remains to be seen.

Whatever the case, the “star privatisation” from the schedule for 2018 and slated for June is probably Centrenergo.  78.3% of State shares are for sale.  What is worthy of note is that despite all the usual issues of a Ukrainian SOE, Centrenergo manages to be profitable.  Net profit January – September 2017 was reported as a little over UAH 2 billion.

Well at least it was profitable.

By the end of December 2017, the debt to the State was UAH 670 Million.

It would appear that since Centrenergo was slated for privatisation it has suddenly become one of the biggest State debtors.

A cynical reader may be (rightly) thinking that “vested interests” either do not want Centrenergo to be privatised, or that because it is actually a fairly attractive asset, “vested interests” would prefer to scare away foreign/external interest and capture this asset domestically.

If rumour be any guide, then Centrenergo will not be the only energy SOE to see mysteriously high indebtedness to the State, where once there was little or none.  Certain Oblast energy companies also slated for privatisation are likely to see the same phenomenon.

Those same rumours would suggest that the “vested interests” involved are the brothers Ihor and Hryhoriy Surkis, who are very much within the orbit of Ihor Kononenko – President Poroshenko’s parliamentary metaphorical “leg-breaker” and member of the president’s most trusted innermost conclave.  Mr Kononenko has appetites when it comes to energy assets.

To be very clear, the only effective way to “de-oligarch” the Ukrainian economy is to open it up to major foreign market entrants throughout the economic spheres that are currently captured by the oligarchs.

It is a matter of diluting the market place of their influence – for that oligarch influence will otherwise not be reduced.  None will go to jail, nor will any “asset reallocation” among the domestic elite release Ukraine from such an economy retarding situation.  Ergo, what prima facie appears to be deliberate and current attempt to capture, via preemptive “debt-ladening” attractive privatisation assets will have to be watched very carefully, and called out publicly for the sabotage that it appears to be – not only of the privatisation process itself, but sabotage of the national budget too.



The nationalisation of UkrTelecom – or not

January 8, 2018

In 2011 the Ukrainian State sold 92.79% of Ukrtelecom to a company called ESU for UAH10.6 billion.  ESU was a subsidiary of EPIC, an Austrian company.

In 2011, the UAH – US$ exchange rate was approximately UAH8 = S1, so the sale raised +/- $1.3 billion (for somebody, as this was during President Yanukovych’s reign, so who knows where the funds ended up).

In 2013 Raga Establishment Ltd (formerly trading as Epic Telecom Invest Ltd), a Cypriot company owned by Ukrainian banker (and London resident) Denis Gorbunenko, bought Ukrtelecom from ESU.

Raga also occasionally appears in the orbit of Sergei Liovochkin.  Perhaps unsurprisingly as Denis Gorbunenko was head of Rodovid Bank (until it went bankrupt in 2010) as this bank then orbited around the Firtash empire – and Sergei Liovochkin is a creature of Mr Firtash.

That same year, Raga Ltd sold Ukrtelecom to Rinat Akhmetov’s SCM empire – at $465 million cheaper than the initial 2011 privatisation.

What’s going on?  A reader may well suspect shenanigans between the then leading backers of Party Regions via a trusted intermediary (Mr Gorbunenko and his Cypriot offshore vehicle).  Living rather nicely in London, Denis Gorbunenko did not become a former Ukrainian banker worth in excess of $230 million by losing money – but he probably became one by facilitating perhaps nefarious transactions before the bank he ran went bankrupt.

2014 brought about the ouster of President Yanukovych (and an on-going war with Russia).  Many of SCM’s assets have fallen behind enemy lines and have subsequently been legally declared beyond the control of SCM.  Needless to say, financial forecasting made in 2013 has little relevance to today for SCM.  Loans and bonds to Oschadbank and Ukreximbank (to name but two) relating to UkrTelecom have not been repaid when due in March 2017.

These two State owned banks had their loans backed by shares in UkrTelecom.

Whatever the failures of reform and policy change in Ukraine, the cleanliness and transparency of banking sector, though not perfect, has dramatically improved.

Thus claims against SCM and Ukrtelecom were forthcoming, and Ukrtelecom and SCM lost in the Ukrainian courts – twice.

The second hearing occurring almost two months ago, provided for the State (via the State Property Fund) to take control of Ukrtelecom.  However The State has not yet taken control, pending a final appeal in the Ukrainian courts the result of which is imminent.  Perhaps the more “out of favour” oligarchs would not be treated so graciously.

However, prior to the await exhaustion of Ukrainian due process, Raga Establishment Ltd (or Mr Gorbunenko) has now made a claim against UkrTelecom and SCM for breach of the sale contract, claiming only $100 million has thus far been received – and that $100 million was paid in 2013.  Raga, being a Cypriot registered company made a claim through the Cypriot courts, freezing $820 million of SCM (thus Rinat Akhmetov) assets.

A reader may rightly ponder just why Raga (or Mr Gorbunenko) has said nothing of apparently outstanding $ hundreds of millions until now?

The why now is clear – to make the claim before the Ukrainian State can take control of UkrTelecom.  The mens rea behind the timing, a reader may suspect has nothing to do with any outstanding funds – if there are any that were ever meant to be repaid regardless of what any contract may say.

A reader may rightly suspect that this Cypriot action has been instigated to either prevent the nationalisation of UkrTelecom or to frustrate and dissuade any potential buyer interest in a future privatisation.

In short a last minute, deliberate legal muddying of the waters – perhaps on behalf of, and to the benefit of Mr Alkhmetov – despite the initial perception of the Cypriot court decision.

Mr Akhmetov’s lawyers are currently in Cyprus.  No doubt the waters will be yet muddier by the time they have done their work.

A reader will be mindful that Ihor Kolomoisky and the on-going PrivatBank court cases will also not be “resolved” until after the 2019 elections.  Perhaps “solutions” may be found should Mr Kolomoisky’s media empire be favorable to the current presidential incumbent during campaigning (which has unofficially started).

Thus if a cynical reader is perhaps wondering why the State (via the SPF) had not already assumed control after two court decisions in its favour, (rather than wait for the last appeal to be exhausted in the immediate future), and thus allowed a last minute legal intervention, then it would be wise to recall that Mr Akhmetov also owns some rather influential media – media that would be perceived to benefit President Poroshenko if it were on his side for the 2019 elections.  “Solutions” regarding UkrTelecom may therefore be found should legal gymnastics drag on (and on, and on) relating to SCM debts to the State owned banks if President Poroshenko is reelected – depending upon favorable media coverage, or not.


Odessa NABU Regional Chief finally appointed (after 20 months of trying)

January 5, 2018

Vladimir Deulin, a former police officer (internal affairs) and the Deputy Head of PR and NABU personnel applications for the Odessa region,, has been appointed regional NABU Chief for the Odessa region – Odessa, Mykolaiv, Kherson and Kirovograd.

His appointment, now authorised by NABU Chief Artem Sytnik, brings to an end a 20 month saga – and four previous and failed attempts to find a regional NABU Chief.

On the fifth attempt to fill the vacancy, Mr Deulin has been appointed.

The first attempt in April 2016 saw Deputy Head of Odessa Customs Semen Krivonos win the competition – only for him to refuse the position after criminal charges of extortion and bribery came to light.  He decided to remain in Customs.

In July 2016, the next competition for the Odessa NABU Chief vacancy competition collapsed as literally no applicants met the requirements.

In January 2017, Dmitry Rudenko from Vinnitsa won the competition – however Mr Rudenko was involved in a scandal surrounding the death of human rights defender Dmitry Groisman several years earlier.  The NABU executive decided not to appoint Mr Rudenko.

A fourth competition was held in the late Spring of 2017 – which again met with failure as all applicants were rejected due to either low professional acumen and/or severe doubts about the integrity of the applicants.

Finally, after 20 months and at the fifth attempt, an applicant from within NABU has managed to fill the NABU management void in the Ukrainian south-west.  A reader can only ponder why existing NABU personnel did not apply before.

It’s to be hoped he doesn’t resign or manage to get himself sacked – for it could be years until another suitable candidate would be found to replace him!

Nevertheless, wish Mr Deulin bon chance, (or bonne chance) for there is no shortage of work for NABU within the Odessa region.


Crystal Ball gazing 2018 – reshuffling the President’s men

January 3, 2018

Loathed as the blog is to embark on crystal ball gazing for 2018, (simply because there is every chance that progress will be minimal and defending previous gains will become the meme for 2018), in response to a reader’s email, there are a few possibilities worthy of note.

It appears President Poroshenko will base his 2019 reelection campaign upon the defence and national security platform – where to be fair, those running against him will have the most difficulty in undermining his tenure.

The front line along the occupied Donbas is now entrenched – literally – and further Russian/Russian sponsored surges into Ukrainian with the objective of taking and controlling more Ukrainian territory unlikely.

This is a war of political and societal exhaustion being waged by The Kremlin, and as such there is no political or societal need to make any further territorial gains for the sake of either improving its negotiating position or wearily attempting to grind away at Ukrainian public resolve.

Neither is there any end to this war in sight.  Ukraine matters more to The Kremlin than any other expedition it has, or may yet embark upon.  That was, is, and will remain the case.

However, while the armed forces are certainly far more professional, experienced, better equipped and trained than when President Poroshenko began his first tenure, there is still a very long way to go in order to meet and/or approximate with the numerous NATO standards which President Poroshenko has repeatedly (and rightly) stated is the aim.  Article 3 of the Washington Treaty is a worthy (and necessary) goal – albeit Article 3 should be viewed not only as a military goal, but also political, societal, and economic target too, for national resilience is much than having a respectable military.

As such the oligarch capture of large sections of the economy, and with corruption unambiguously being a national security issue, there is clearly a long way to go before Ukraine gets anywhere near Article 3 compliance and/or approximation.

Nevertheless, the teeth arms have radically improved in quality and ability over recent years, even if corruption and waste (often intertwined) in military logistics and production remain problematic.  The 2018 military budget is a record UAH86 billion – it remains to be seen (or perhaps not seen) just how much is lost to waste and/or corruption.  It further remains to be seen just what external lethal weaponry will begin to appear – and from whom (aside from Lithuania currently, and the US soon).

With the military being the most trusted of State entities by the public, clearly President Poroshenko will also spend more time embedding himself with the military in an attempt to reap the benefits of voter psychology.

This however will not be enough.  With a defence and national security electoral platform, President Poroshenko will have to be seen to be doing something (other than spending UAH86 billion) and rightly lauding those brave souls on the front lines, and getting defence and national security legislation passed and onto the statute books.

Ergo, with NATO standards as the declared objective, and electoral political framing and action a requirement, it seems almost certain that General Stepan Poltorak will either leave his post as Minister of Defence, or he will leave the military to remain in post.  The NATO normative is that a Ministry of Defence is headed by a civilian, which discounts General Poltorak whilst ever he remains a serving military officer.

The chances are he will be replaced – albeit there will be other military orientated openings to fill.

Who will replace him?

When Yuri Lutsenko was shoehorned in as Prosecutor General, it was clear that it occurred for a few reasons.  First his loyalty to President Poroshenko.  Secondly his ability as a “time served” Grey Cardinal to strike grubby deals behind the curtain (and subsequently not manage to jail any “big fish” during his tenure (how ever long that might be).  Lastly, he clearly wanted to return to the Cabinet of Ministers and the top of Ukrainian politics, but there were no suitable positions for a Grey Cardinal and former Interior Minister.  Prosecutor General was a high profile “parking” position.

Mr Lutsenko will want out of the Prosecutor General’s role as soon as is practicable.  That not one “big fish” has been convicted and gone to jail despite Mr Lutsenko’s oft bellicose public proclamations is hardly doing what is left of his political capital much good.  A role where “achievements” manifest is desired.

Thus moving Mr Lutsenko (perhaps Spring/Summer) to replace General Poltorak would deal with numerous issues for President Poroshenko.  Firstly a NATO normative will have been met.  Secondly yet more delays in (successful or otherwise) prosecutions relating to “sensitive individuals” may be further justified as any new appointment “familiarises” themselves in a new role.  Lastly, Mr Lutsenko returns to top tier politics and the Cabinet of Ministers (as well as a seat on the NSDC) leading a Ministry of Defence with its biggest ever budget.

There are also on-going issues within Ukroboronprom that may possibly see the current CEO, Mr Romanov (and others) removed.  There will probably be very senior vacancies for Poroshenko-loyal “government” and “military” personnel who may be looking for “parking” positions within six months.

As stated months ago, there is also a long overdue requirement to reform the SBU, which spends far too much time dealing with matters that are not its core competencies.  For example, in areas such as organised crime (which is a national security issue) its activities go far beyond “oversight” and intelligence, and manifest in almost daily operations that the police are more than capable of carrying out and investigating.

As such, SBU reform will require the surrendering of some responsibilities to other existing agencies – and if the new National Bureau for Financial Security comes into being, then economic intelligence is about as far as the SBU remit should go.

To be blunt, there is enough counterterrrorism, counterintelligence, and counterespionage work for the SBU to concentrate upon that an overseeing and intelligence gathering ability upon organised crime and economic issues from a national security perspective should mean all SBU resources are constantly very busy – without getting involved in daily “policing”.  Whether the current SBU Chief, Vasyl Hrytsak shares that view (having previously headed Department K – the corruption and organised crime department within the SBU) is perhaps going to be irrelevant.

In meeting NATO standards with a civilian as defence minister, is there a likelihood that the Ukrainian spook agency may also see a civilian head too.

The issue here being that with any civilian Minister of Defence by definition will be a politician as a Minister (perhaps Mr Lutsenko, perhaps not), while the head of the Ukrainian spook service would ideally be a civil servant rather than a politician.  The point being that intelligence is supposed to assist in shaping policy, and policy/politics should not shape intelligence product.  Ergo an a-political civil servant rather than a politician will be perceived as the “intelligent” way forward in the absence of a career spook heading the service.

Unfortunately the SBU has always been a political instrument of any sitting Ukrainian president – and remains so today.  Should Mr Hrytsak be replaced it will be because he is not “political enough” – despite his loyalty to President Poroshenko.  Who would replace him is simply speculation – but politician rather than civil servant would seem more likely.  It would be somebody with all the right clearances.  Perhaps somebody that will not be required to play a major role in the presidential reelection campaign and thus not missed, but by virtue of being actively within the Bankova already has presidential trust (which matters more than ability)?

The most likely candidates to run the Poroshenko reelection campaign would appear to be Ihor Rainin or Alexandr Turchynov – as to be blunt there are not that many people in Ukraine capable of running a national reelection campaign for the incumbent who can raise the money, strike the grubby deals, spend the money (without stealing it) effectively, do not require micromanagement, and have a vested interest in the incumbent winning and are yet coercive enough and without too many (current) sworn enemies.

The question is where Mr Turchynov sees his future, and how much of the People’s Front would follow him down a Poroshenko path, or whether Mr Rainin would frustrate the assimilation of the “best of the bunch” from the People’s Front and simultaneously make the final year of the Verkhovna Rada unworkable as the coalition fell apart.

The crystal ball now becomes more than a little blurry – and will perhaps stay that way until late Spring/Summer 2018 when President Poroshenko will have to decide who will run his reelection campaign.

Nevertheless, predictions within the next 3 to 9 months with regard to defence and national security in particular – Out will be some of the executive leadership of Ukroboronprom, and in particular the CEO, Mr Romanov.  Also out will be General Poltorak as Defence Minister.  Yuri Lutsenko wants away from the PGO and a return to top-table politics as a politician, and Mr Hrytsak’s SBU position could well be in danger as while politically subservient, he is not “political enough”.

Thus there will be vacancies to fill within the defence and national security framework, and Yuri Lutsenko as Minister of Defence answers political many problems – so maybe that will happen.  Whether General Poltorak or Mr Hrytsak would entertain a senior role at Ukroboronprom – who knows?  As there is no longer a requirement for formal legal qualifications to become Prosecutor General, there are numerous possibilities for a Lutsenko replacement – but a Poroshenko political animal it will surely be.  Perhaps somebody from within The Bankova.  There will also be a role to fill as head of any new National Bureau for Financial Security – if Mr Hrytsak is deemed to be “not political enough” to remain SBU Chief, would the same view apply for this new role?  That is open to question – if he were interested in the position at all.

Aside from that, the prediction for 2018 is that it will be a very difficult political year where domestic progress will be slow, and defence of what has already been achieved will become a priority – such will be the nature of a year where all domestic political eyes (and vested interests) look to the presidential and then Verkhovna Rada elections of 2019.

Naturally the external Russian threat will remain omnipresent – and expect cyber issues to cause more problems than military ones, though they will not be the only way Kremlin shenanigans manifest within Ukraine.

It will be necessary to keep the faith.


Coincidence or conspiracy – The Nozdrovska murder

January 2, 2018

The murder of lawyer and activist Irena Nozdrovska is yet another high profile death that has captured headlines in Ukraine.

Thus far the usual suspects that are  publicly bellicose with high profile cases – Anton Gerashchenko and Yuri Lutsenko –  normally followed by silence when no progress occurs, appear subdued.

A hopeful sign of increased professionalism in 2018?  Alas hope is normally the last human emotion to leave, and an emotion that can take a severe and repeated battering despite no change in circumstance.  No doubt the usual less than circumspect or objective commentary will soon be gushing forth from both men once again.

What has resonated within Ukrainian society is that Ms Nozdrovska’s murder follows threats made against her while seeking justice for her sister – killed by the nephew of a Judge who was head of the Vyshhorod District Court from 2007 to 2010, and then Acting Head from 2015-16.

The circumstances surrounding that case and the threats made to Ms Nozdrovska are summarised in English by KHPG.

Two days after her latest court appearance seeking justice for her sister – Ms Nozdrovska disappeared and was later found murdered.

Naturally a reader may assume that the court ruling of 27th, together with numerous threats made against her by the defendant, as well as friends and family of the defendant, would suggest some conspiracy to murder Ms Nozdrovska a few days later.

Well perhaps.  That is hardly a theory that can or should be ignored.

But to “assume” can bring about an “ass – u – me” outcome.

There will be numerous other individuals to rule “in” or “rule out”.  Individuals that fall outside any professional advocacy Ms Nozdrovska was involved in.

Thus investigations take time – even flawed investigations.

Further, and cynically, due to the blood ties of the defendant to the Ukrainian judiciary, relating to the death of Ms Nozdrovska’s sister, many will also presume that “impunity by bloodline” even if not offered, will be sought and will have been expected by the defendant.  Thus far that “impunity” and/or “professional favour” does not appear to have manifest on his behalf – yet.

(Having previously “categorised” the types of judges active in the Ukrainian judicial system, there is that rare breed – the honest Ukrainian judge.   Honest judges are oft mentioned, but seldom named – so, just for precedent, the blog will name one that prima facie appears to be that rarest of creatures – Judge Irina Puchkova in Odessa.  This lady, it is known, does not entertain prosecutors or defence lawyers outside the courtroom – ergo no illicit deals can be easily struck.  It is also undoubtedly why she has never received a case that would “resonate” with the public, or a case that would require “specific outcomes” for political expediency or “vested interest” benefit.)

Nevertheless, based on assumptions or presumptions, and no doubt a cynicism well founded upon historical and recurring judicial and investigative negligence and/or shenanigans, several hundred people demonstrated outside the Ministry of Interior in Kyiv demanding a thorough, integrity based investigation into the murder of Ms Nozdrovska – as is their right.

Unusually for a high profile murder in Ukraine, there appears to be numerous possible suspects where normally there appear to be few (if any).  The pressure to successfully prosecute a suspect will be great.  Society must allow the investigation to progress unhindered.  The investigation will equally have to be seen to be done with the utmost integrity.

A case to watch not only for the way the investigation is conducted but for the way it is communicated.  A murder of coincidental timing – or a conspiracy to murder?


Zhevago takes control of Espreso TV

December 31, 2017

With elections 15 months away, as previous stated by the blog, it is now worth keeping a watchful eye over the Ukrainian media – national and local.

The oligarchy and local vested interests will, by the summer of 2018, have cast their lots – with many of the oligarchy backing several candidates for president (albeit it is in parliament they can do the most damage).

Akhmetov’s Perviy may well get behind President Poroshenko, so too Mr Pinchuk’s ICTV.  Depending upon the conversation in The Netherlands between Prosecutor General Lutsenko and Ihor Kolomoiswky, 1+1 (and others) of the Kolomoisky media empire may also get behind the President (and the PrivatBank issue suddenly be resolved, or the legal ball deliberately dropped post elections).  But who else will they back?

If Mr Zakarchuk runs, (and that will become clear during summer 2018), do they back him too?  Which oligarchs and/or minigarchs will he accept backing from?  (His natural orientation would suggest a bias toward Samopomich and Dem Alliance – perhaps even the Georgians.)

Maybe if Mr Firtash’s business interests suddenly become “easier”, Inter may also be less critical of the President – or perhaps Ms Tymoshenko’s Vienna visit during the summer of 2017 has sealed a deal already?

What of the current Zik media environment?

When Rabinovych fails, will NewsOne be the Tymoshenko platform?  Which media owners will side with whom – and why?

And so it goes on.

When the wives of Messrs Yatseniuk, Knyazhytsky, and Avakov bought Espreso TV in August 2017, a reader would have perhaps understood the purchase to be a TV/media outlet for the promotion of their political futures, or to act as an irritant for the political futures of others.

Media ownership by the political and/or vested business interests both before and behind the curtain in Ukraine is par for the course – as was hiding assets among relatives (and trusted school friends) prior to public e-declarations.

Naturally the usual chain of companies remain involved in any acquisition (sometimes for good reason, sometimes for nefarious reason).

For example, Mr Yatseniuk acquired his shares in Espreso TV via Goldbury LLC, which is owned by Astra Finance.  Astra Finance has Mr Yatseniuk (30%), Mrs Avakov (40%) and Mrs Knazhytskya (7.5%) among the shareholders.  A particularly “People’s Front” orientated business entity.

However, it appears that after 5 months of ownership, Astra Finance has sold 77.5% of the shares in Espreso TV (the shares of Avakov and Yatseniuk) to Atmosphere Entertainment Inc.  The remaining 22.5% of Espreso TV remaining with Mrs Knazhytskya – for now.

Behind Atmosphere Entertainment Inc sits Ivan Zhevago – who ultimately now owns 77.5% of Espreso TV.

Ivan Zhevago is the son of Russian born, Ukrainian oligarch Konstantin Zhevago.

Konstantin Zhevago owns in part or in full, among other things (via “Finance and Credit Group”) – Ferrexpo, Poltova GOK, Kremenchug AutoKraz, CISC Rosava, Omega Insurance, “Salute Hotel” Kyiv,  pert of Yushni Port, “Kievsoyuzdorproekt”, “Biloterkovna teploelektrotsentral”, Ukrenerhosbyt, Odessaoblenerho, Ukrainian-German “Mega-motors”, Luhanskoblenerho, “Kremenchug Factory of Technical Carbon”, Stakhanov Factory of Technical Carbon, LTD. “Ukrtekhuglerod”, Zatisnyansk Chemical Factory, Uzhgorod “Turbogaz”, Kharkov Instrumental Factory, Stakhanov Carriage Works, Berdychiv machine-shop “Progress”, Poltava machine unit factory, Zaliv Shipbuilding, “Kyiv shipbuilding and reconstruction factory”, Skopski Legury (ferro-alloys), electro-metallurgical plant “Vorskla Steel”, electro-metallurgical factory “Vorskla steel Denmark”, “Kievmedpreparat”, “Gemoplast”, “Galichfarm”. and “Kremenchuk Yaso”.

The blog may have missed a few companies, and the now bankrupted Finance and Credit bank was deliberately omitted.  RasGas, an entirely unclear deal involving Qatar, has also been omitted precisely because it is unclear as to the extent of involvement, or whether any agreement is even on-going.

Konstantin Zhevago has, since the 1990s, been actively involved in politics too, beginning in local politics in Poltova and becoming a Yulia Tymoshenko ally upon the national stage – although currently he is in bed with The Radical Party.

In summary Mr Zhevago (Senior) is in politics, chemicals, finance and insurance, real estate, energy, engineering, shipbuilding, food, metals, and pharma – but not media.

It has to be said that as Konstantin Zhevago benefited from a well placed father, so too may his son Ivan.

There is nothing to directly connect Atmosphere Entertainment Inc to Ivan’s father Konstantin (other than a blood relationship – and probably, directly or indirectly, the purchase capital required).

Nevertheless Espreso TV is hardly a major media outlet.  It is certainly not a major revenue provider.  When the Yatseniuk-Avakov-Knyazhytsky (People’s Front) bought it, there was perhaps a fairly clear political rationale for doing so when President Poroshenko (and the then new owners) will need all the “friendly” media he can find in 2019.

It would/could have also acted as a platform for any re-branded reincarnation of the People’s Front (which will be otherwise slaughtered at the ballot box).

The plans for Expreso TV under Mr Zhevago Jr (or Snr) therefore seem somewhat unclear, albeit there is certainly capital to invest in the station.  Nevertheless a challenger to Kolomoisky’s 1+1, Firtash’s Inter, or Pinchuk’s ICTV, is unlikely to be realised any time soon.  It probably won’t even reach the status of Muraev’s (Rabinovych-centric) NewsOne before 2019.

That said, some serious expenditure on licencing for Game of Thrones, The Americans, and whatever else is currently “en vogue” TV, may well rapidly grow audience numbers despite the losses incurred.  Media in Ukraine is not necessarily owned to make money – for often it doesn’t.  It is owned for political reasons.

Is this a matter of Espreso TV no longer being “People’s Front TV” and becoming “Radical TV”?

If so why would (albeit fractious) coalition partners of President Poroshenko sell their TV station before the elections into The Radicals orbit?  After all, where will all those (significant) current People’s Front parliamentarians go if not to Poroshenko’s Solidarity Party (in the absence of creating a new brand, which is probably now too late, less a Groisman factor is included in a new party)?

How does selling a TV station into the sphere of influence of a populist prima donna (and otherwise entirely empty shell) like Oleh Lyashko assist the current coalition prior to 2019?

The answer perhaps, is that swivel-eyed populists Oleh Lyashko and Yulia Tymoshenko fight for the same rural populism-receptive voting constituency.  The thinking perhaps is that every vote Mr Lyashko takes from this community is one less for Ms Tymoshenko – and one which President Poroshenko would probably not have won anyway.

Crudely put, the better Mr Lyashko does in the countryside, the worse Ms Tymoshenko will do – so why not sell a TV channel owned by the coalition to those within his orbit?  At present, President Poroshenko would certainly prefer to face Mr Lyashko rather than Ms Tymoshenko in any second round of presidential voting – so why not add to the Lyashko arsenal?

Time will tell fairly swiftly the true nature behind the sale and purchase of Espreso TV.  It may well be that Ivan Zhevago simply fancies the idea of owning a TV station as a “rich kid’s play thing” – or not.


Prisoners with “added value”

December 28, 2017

A few weeks ago an entry appeared relating to the 2nd May 2014 tragedy in Odessa and the “prisoner swap” that occurred on 27th December 2017 – “Of the two most prominent Russian citizens, Sergei Dolzhenkov has either refused to partake in the prisoner swap or has inexplicably been omitted from the list, but Evgeni Mefedov appears set to return to Russia.

A further 4 Afghan veterans who attempted to create the “People’s Republic of Odessa”, as well as  Igor Makhinenko and former City Councillor Alexander Lutsenko also appear to be heading to Russia or the occupied Donbas in exchange for Ukrainian prisoners in the captured in the East.

Adding to that list heading to East is Vladimir Dorogokupets, Semen Boitsov and Maxim Genko (although not Miroslav Melnyk who appears not to be on the list for exchange).  Finally Alexei and Elena Vlasenko will also leave (government controlled) Ukraine too.

The exchange will mean that numerous cases (but not quite all) relating to 2nd May 2014 will effectively close.  Also cases of espionage, terrorist recruitment, conspiracy to murder (in fact a conspiracy to commit a political assassination), and a car bombing among others effectively shut too.”

While the nominated prisoners all headed east in preparation for the exchange, the Russian citizens upon the list were subsequently removed prior to the exchange.

Nevertheless 74 Ukrainians, the majority of which were not those who fought on the front lines, were released in exchange for 237 individuals prepared to enter the occupied Donbas.  (A further 40 were simply released rather than exchanged, and 29 at the last moment decided that Ukrainian detention was preferable to heading into the occupied Donbas.)

If not an “all for all” exchange, then 74 returning is still 74.  A tremendous result.

There remain well over 100 Ukrainians still in captivity in the occupied Donbas, plus those in Russian and annexed Crimean prisons.  Negotiations over another 29 Ukrainians are already underway.

So why, having been transported to Sviatohirsk in preparation for exchange, was Yevgeny Mefedov (a Russian participant in the 2nd May tragedy) struck from the list (together with Igor Kimakovsky, Olga Kovalis, Pavel Chernykh, Hajiyev Ruslan and several other Russian citizens)?

It is very clear that the courts and prosecutors office in Odessa would happily see him returned to Russia and the case, effectively closed, stamped “Prisoner Swap” (or similar).

Preparations for his exchange had been on-going since the entry linked above several weeks ago.

What changed?  And when?  And why did the other side accept it?

According to Valantin Rybin, Mr Mefedov’s lawyer, that Russian citizens had been struck from the list only became known very shortly before the exchange.  Yet despite the “This looks like a blatant deception” rhetoric of Mr Rybin – was it?

It appears that prisoners who hold the citizenship of the Russian Federation are to have, or are perceived to have “added value”, and that Ukraine intends to hold them and exchange them only for Ukrainians held in Russian and annexed Crimean jails.

So be it.  A dullard can see the perceived additional leverage/strengthened negotiating position in adopting such a stance in relation to such exchanges.

Perhaps the question is why was such “added value” seemingly recognised so late in the day?

Moscow has always taken pride in making every effort, often successfully, to get their citizens home.  Kyiv too will take pride in doing so – and it will certainly boost a potential defence and national security platform President Poroshenko may choose for reelection.

Quid pro quo?  Well perhaps.  If so it may well fall under the long shadow of politically expedient timing.  If that shadow prove very long, then Ukrainian due process will have to continue rather than sit in suspended animation – to the almost certain angst of the prosecutors and courts of Odessa.

More interestingly is when Moscow accepted that this was to be the case.  Or did it propose it?

One way or another both Ukraine and Russia had to buy into, or sell, no exchanges of Russian citizens relating to the occupied Donbas, yet allow other exchanges to occur.

The exchange of the 27th December occurred.  No last minute spanners were thrown into the works.  No cries of deception from either side have been made (lawyers for Russian individuals aside).

Does this separation of Russian prisoners allow The Kremlin to continue its farcical claim (even if only it believes anybody else believes) of non-involvement in the occupied Donbas?  A deliberate separation of Russian prisoners from any grubby exchanges related to the occupied Donbas, for the consumption of the domestic audience or the objectively retarded, hardly hinders such (threadbare) fiction.

Whatever the case, The Kremlin allowed the exchange to go ahead (let us not pretend the “Republics” have that sort of agency as an actor on the stage).  There is no reason to doubt the next prisoner exchange will occur – and perhaps reasonably swiftly.  It seems unlikely it will consist of any Russian citizens however – lest they lose their “added value”.

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