Archive for July, 2017

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Odessa MP appearing in the Trump-Russia orbit? Not quite

July 20, 2017

In the US the Trump-Russia affair continues to muffle much of the news across the globe as one questionable occurrence appears after another.

Whether or not President Trump, or his campaign, colluded/conspired with The Kremlin remains to be proven in a court of law.  To be honest, when it comes to President Trump, his business empire and any kompromat and/or Russian influences, it is probably wiser to follow the money and look to money laundering either knowingly or negligently over the decades.  Quite clearly no due diligence was entered into when it came to the legitimacy of the money used to buy or invest in Trump real estate.

The clouds that hang around his family and entourage seemingly also continue to darken.

Prejudging on-going investigations are a somewhat pointless affair even if they make good media copy and/or click bait – and anyway this blog focuses on Ukraine.  Thus perhaps the affairs of Paul Manafort are about as close to anything in or surrounding the White House behind the curtain issues?

In a very recent New York Times article the name Ivan Fursin appeared in relation to a string of offshore companies and apparent debts of Mr Manafort.

Small change perhaps?  That depends upon what a reader knows of Mr Fursin.  With very little said of Mr Fursin, so perhaps a little background?

He is after all an MP for Odessa.

Ivan Fursin is allegedly a childhood buddy of Sergei Liovochkin – who with Dmitry Firtash currently sits behind the Opposition Block (remnants of Party of Regions) of which Mr Fursin is an MP.  It is claimed that Mr Fursin’s father once worked in the Ministry of Interior under General Liovochkin, Sergei’s father and there began is a lifelong friendship.  Whether or not that is true, both men went to Kyiv Economics University at the same time (1989 ish) and certainly bonded there if not before.  (Within that university circle of friends are several other (in)famous names which are not relevant to this entry.)

In 1993 Messrs Liovochkin and Fursin (and a few others) opened a bank in Kyiv called Askold.  That the bank survived nefarious and violent interests during those wild, wild days of the 1990’s can perhaps be put down to Sergei Liovochkin’s father – the aforementioned General within the Ministry of Interior.

The bank also managed to attract one or two quality customers – perhaps again thank’s to the General.

Whatever the case the bank also become one of the major currency converters – for the legitimate customer or otherwise.

By 1995, with a bit of offshore smoke and mirrors, Askold Bank became the infamous Banking House (also known as Gangster House by the late 1990s).  Naturally the temptation to avoid nefarious deeds was too great – questionable property financing, insurance and trusts etc.

Banking House closed in the late 1990’s mired in scandal – though naturally nobody went to jail.

Mr Fursin then appeared in Odessa in 1999 with a new bank called Misto Bank (which he created with Sergei Kivalov, Artem Ershovym and another).  Mr Ershovyn would continue to feature in the business of Messrs Liovochkin and Fursin via his East-West finance vehicle.  It is about this time that Dmitry Firtash and small shares in an oil and gas company company called Basco all appeared within the Fursin orbit – via Sergei Liovochkin.

For the next decade Mr Furzin built his empire, much of it along side and with minority shares within the Firtash empire – Clearing House, Centragaz, Raiffeisen Investment and more.  This in turn and via these entities, led to Mr Fursin having an indirect minority share in the notorious RUE monopoly gas intermediary between Russia and Ukraine.  Mr Furzin began collecting Odessa landmark property while Misto Bank lent large sums to select clients in Kyiv – some of which were then “taken over”.

In 2012, Mr Furzin entered the Verkhovna Rada for the Party of Regions having won single mandate seat 138 in Odessa – which was just as well as he had become a person of interest in the Boiko Towers oil rig scandal via, by then, a vast web of smoke and mirrors offshores, and his Centragas interests.  Naturally nobody has yet gone to jail.

He remains a parliamentarian for the Opposition Block.

So the apparently still unpaid “loan” to Mr Manafort of $9.9 million via all the corporate smoke and mirrors – small change or not for Mr Fursin?  Well he’s certainly not hurting!

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Grid integration – ENTSO-E

July 19, 2017

19th July 2017 marked 600 days without Ukraine buying Russian gas.

Quite an achievement and in no small part due to friendly nations toward Ukraine stepping up to the plate when needed.

Historically gas always seems to have taken the headlines when it comes to the Ukrainian energy mix – predominantly of course, due to The Kremlin having used gas as both carrot and stick to both please and punish the Ukrainian elite via the associated corruption and enormous wealth that came with it, as well as a lever to stoke social unrest and populist (almost reflexive control) politics in mid-winter.

Thus it is the latest in a string of less headline-grabbing electricity market reform issues that catches the eye.

On 28th June 2017, CEO of the State Owned Enterprise (SOE) Ukrenergo, Vsevolod Kovalchuk signed an agreement regarding the terms of the interconnection of the Ukrainian grid to that of ENTSO-E (the European Network of Transmission System Operators for Electricity).  ENTSO-E is comprised of 41 system operators from 34 countries.  Needless to say when it comes to energy security in the form of electricity, this is perhaps a matter of national security.  Russian electricity plays its out-sized part in the Ukrainian electricity market as Russian gas used to do.

However there is much to be done before acceding to the ENTSO-E network.  It is not as simple a matter as the reverse flow gas agreements rapidly thrashed out between friendly sovereign states.

Ahead are years of work to be realistic.

There are few ways to expedite Ukraine meeting the technical and legislative requirements.  By way of comparable and facilitating legislation Ukraine is absolutely nowhere near the ENTSO-E requirements.  Compliance with regard to hard and software will require robust argument to allocate sufficient budgetary funding over a period of several years to reach the standards necessary.  There are, as there always is, vested interests domestically to overcome too.

Perhaps the only possible way to concentrate minds, overcome probable legislative delays, find sufficient funding, and steamroll over vested interests, is to firmly and publicly fix the matter as one of national security and/or national interest, thus rudely dumping the problem upon the agenda of the NSDC (National Security and Defence Council) forcing it to take the lead.

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Novorossiya/DNR-LNR/Malorossia (delete as appropriate) – What’s in a name?

July 18, 2017

18th July witnessed the announcement by Alexander Zakharchenko of the creation of “Malorossia” (or Little Russia) thus rebranding the “Donetsk People’s Republic”.

Naturally the first reaction is to mock – particularly as the “Luhansk People’s Republic” apparently had no idea that such an announcement was forthcoming and denied any consultations regarding the creation of this “State”.  The “official” website of the “Luhansk People’s Republic” stating quite unambiguously “This project was not even discussed with the LC..

Clearly Igor Plotnitsky was not sat in the occupied Luhansk territories creating Ochen Malorossia (Very Little Russia), and it is highly unlikely he would entertain the thought of the merging of the “People’s Republics” unless he and not Zakharchenko was to sit atop.  That, if a reader is to grant that these two “leaders” have any form of meaningful policy/decision making ability free of Kremlin diktats.

The Kremlin too was swift to distance itself from Zakharchenko’s announcement (for whatever credibility a reader may give Kremlin denials) – “100% this is not the initiative of Vladislav Surkov.”  “This is a personal initiative of Zakharchenko and his entourage”.

So what happened?

Did Zakharchenko’s tin foil hat simply fall off and he manage to spout this flapdoodle before somebody managed to get it back on?

After all, changing the name of an unrecognised occupied territory for another name of that same occupied territory does not change the circumstances, advances no territorial gain, nor brings with it any form of legitimisation.  Form rather than substance.

However, if a reader is inclined to believe Mr Zakharchenko’s tin foil hat did not fall off when spouting such flapdoodle, there are several questions to be asked.

The first, and always the first question to be asked, is who benefits (either internally, externally or both)?

It has to be noted that the announcement of “Malorossia” also contained the statement that a 3 year state of emergency would accompany this transition.  From that a reader might infer that therefore, the next 3 years would not witness any form of elections or “elections” within that occupied territory.  As such Mr Zakharchenko was effectively insuring that via the state of emergency his reign would continue.  Therefore woeful as his leadership has clearly been for the constituency of the “DNR”, those constituents could put aside any notion of replacing him via elections (or “elections”) for another 3 years.

Whether that outcome would be agreeable to the Kremlin curators is also a valid question.

Ergo was this announcement a trial balloon, and if so, despite denials, did it occur with or without Kremlin knowledge?

How would the announcement benefit Moscow?  The very name “Malorossia” could make it far more difficult for The Kremlin to disown and/or distance itself from this occupied territory.  Perhaps Zakharchenko has a fear that The Kremlin is preparing to lessen its support (either for him and/or the region) and this is an attempt to prevent it via a necessary poke of the Donbas lobby in Moscow?

How does it assist The Kremlin games within the Minsk framework – if at all?  A reader should note that Germany, France, Ukraine and Moscow all declared it was not helpful.  Boris Gryzlov who heads the Russian Minsk negotiation team stated “Most likely, this proposal has to do with the information war, it is not a subject of real politics.”  A statement from Mr Gryzlov that invites a reader to listen to the adults (and curators) in the room, and not the children – just in case anybody was still under the misguided impression that the locals are running the show in the occupied territories.

However, as Mr Zakharchenko’s very future relies on Minsk never being implemented, for throwing him under a bus is an easy concession for The Kremlin to make when details are thrashed out, throwing up obstacles, or gifting Kyiv reasons to stall, is in his interest.

Maybe it is a simple attempt at distraction/narrative redirection from the 3rd anniversary of the MH17 crime in which the “DNR” is unquestionably involved?

Could it be that the hope was that the media would begin to use “Malorossia” rather than “DNR” in the months prior to the JIT MH17 criminal investigation conclusion, and thus it be an attempt to mitigate the international bloody stain indelibly cast upon this occupied territory by sending “DNR” into “search history”?

Perhaps it is an amateurish PR response from Zakharchenko regarding the almost certain and fairly imminent legislative declaration by Kyiv that these territories over which it has no control are officially “temporarily occupied territories”?  Such wording in that legislation undermines him and (rightly) places responsibility upon The Kremlin for the management of events occurring within the occupied territories.  After hubris comes nemesis those wise and ancient Greeks proclaimed.

Be the tin foil hat on, or be it the tin foil hat fell off, such statements as those made by Zakharchenko are not made without a reason – no matter how weak and faulty that reasoning may be.  So who did he think would benefit?

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MH17 and Hawk RQ4 Eyes in the Skies – Ukraine

July 17, 2017

Another year to the day has passed since the shooting down of MH17 killing all on board.

The international Joint Investigation Team (JIT) continues to work toward attributing criminal responsibility.  That Buk 332 of the 53rd Anti-Aircraft Missile Brigade of the Russian Armed Forces will be found the offending unit there seems little doubt.

There is perhaps more doubt when it comes to who exactly pressed the button that launched the missile that murdered so many civilians.

It is possible that the Russian Buk crew fired the missile.  It is also possible that the “separatists” and/or “Russian volunteers” fired it with technical assistance and/or training from the Russian military crew.  However the Buk has been in service since the 1980s and therefore there are also a lot of people that have at one time or another been trained in its operation.  It is thus possible, albeit most unlikely, that the Russian proxies/mercenaries fired it while the current Russian military crew stood idly by.

It will be interesting to see just how far down the chain of command the JIT can go with regard appropriating personal criminal responsibility, as well as how far up.

Whatever the case, the JIT is likely to find the Buk system responsible is that of the Russian military and therefore there is a Russian chain of command responsible for its deployment into the occupied Donbas, and its return to the Russian Federation the following day.

It appears that the JIT criminal investigation will probably appear in the public domain in early 2018 when no doubt many within the Russian chain of command will be personally identified even if the identity of the individual who pushed the button may not be.

As a  result of MH17 there has been no military air sorties in or around the occupied Donbas since, thus keeping military engagement very much land (and occasionally sea) based.

Aerial warfare by all parties has therefore been restricted to the tactical use of low altitude intelligence gathering drones, the fairly frequent hostile EW efforts to disrupt them, or their infrequent shooting down – including OSCE drones.

Or has it?

For example, just before 0800 hours on 16th July, from Sigonella, Sicily, a US RQ4 Hawk UAV made its way toward Ukrainian airspace.  Perhaps part of the on-going NATO Sea Breeze exercise taking place in the Black Sea and within Ukrainian territory?

No.

While heading toward Crimea at about 17000 meters, the Hawk became a blip on the Russian radar system, subsequently leading to the launch of a Russian SU 27 aircraft from the Belbek airfield at approximately 1025 hours.

The Russians it appears had intermittent eye contact with the Hawk for about 2.5 hours as the Hawk, travelling at about 650 kph, constantly changed altitude and course remaining within the Ukrainian airspace of Kherson and Mykolaiv.

Having passed Crimea, the US Hawk then headed toward Mariupol and the “contact line” with the occupied Donbas and then along the “contact line” before heading westward again deep within Ukrainian airspace before it then entered Romanian airspace at approximately 2110 hours in the Chernivtsi region, presumably then onward and returning to Sigonella, Sicily some 16 hours hours after its departure.

How regular, or indeed how infrequent, the US (and/or others) monitor the “contact line” and Crimea in this manner is a matter for a reader to ponder – as are the number of times the Russians decide to scramble – or not – in response.   There is, after all, no gain in shooting down a US Hawk drone in Ukrainian airspace for the Russians.

Nevertheless, this incident perhaps serves as a timely reminder on the third anniversary of the  MH17 crime, that there remains on-going military aerial sorties within Ukrainian airspace.  They simply do not directly result in the criminal deaths of MH17 as events 3 years ago today did.

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Prejudging the judicial reform – Supreme Court (Stage 1)

July 17, 2017

About a week ago an entry appeared that cast a somewhat pessimistic light upon the much needed judicial reform – bemoaning the structure and processes that will deliver judicial reform, but it would appear without reforming the judiciary.

“As such the judicial reform has already set off along a poor path as the structure and process behind what will result will not lead to a truly independent judiciary staffed by morally upstanding and individually independent judges.

The Prosecutor General’s Office will also never convincingly reform whilst ever it is run by a politician (and Yuri Lutsenko was, is, and will always be a politician) and any eventual structure and process reform is likely to leave this institution beholding to those in power.

The reason being that those historically and currently in power simply cannot find it within themselves to surrender the prosecutors and judiciary to genuine independence.  The sword, rather than the scales, seem likely to remain the preferred tool of the State.  For my friends anything – for everybody else the rule of law.”

Needless to say there are some significant issues within the Constitutional Court legislation rushed through the Verkhovna Rada on its final day of its final plenary session before parliamentary summer holidays.   The new legislation does not provide for a structure or mechanism to make the 6 parliamentary, 6 presidential, and 6 Congress of Judges appointments subject to any form of open competition.  Thus the most deserving and successful candidates will remain those politically deserving – no differently to what occurs now.

The new grounds for dismissal are both woolly in interpretation and can be equally politically driven (albeit that dismissal is now the sole purview of the CoJ).  The major pluses to the hurriedly passed  legislation are, well, none.

A dedicated Anti-Corruption Court is not going to appear any time soon leaving the anti-corruption institutions to present cases to an unreformed court – and Lady Justice in Ukraine remains a harlot for hire.

However it is with regard to the Higher Qualification Commission of Judges (HQCJ) that this entry appears, for 17th July will see it finally conclude its review of all applicants for the new Supreme Court.  The final 6 judges subjected to the probing and prodding of the Public Council on the Integrity of Judges (PCIJ) appear before it.  Among those to be considered is the notorious Judge Vovk, although none of the 6 being considered on 17th are particularly morally upright.

Indeed, whilst the PCIJ continues to highlight lifestyles and assets far beyond incomes, the HQCJ continues to demand proof of corruption.  In short the new Supreme Court will almost certainly not be staffed by those that passed every “sniff test” of a “reasonable person”, but will be staffed by those who, even if “smelly”, at least too much shit did not stick to their blanket under a cursory glance as far as the HQCJ is concerned.

A low moral and ethical bar has apparently been set.

When historically the European Court of Human Rights has said of the Supreme Court of Ukrainethe court believes that the rationale of the Supreme Court of Ukraine can be interpreted only as a” flagrant arbitrariness ” or “denial of justice it is surely not the best way to boost public confidence in the new Supreme Court when the public watchdog says “they smell” but the the HQCJ prefers not to sniff.

Thus far only 25 of those deemed “smelly” by the PCIJ have been deemed “smelly enough” by the HQCJ to prevent their running for the Supreme Court.  In percentage terms only 18% of those thought too smelly have been thought of as too smelly by both PCIJ and HQCJ.  Another 115 judges were allowed to continue to run for the Supreme Court by the HQCJ despite failing the PCIJ sniff test.

To be clear, Judegs Vovk, Marynchuk, Sirosh, Stupak, Okhrimchuk and Invanova that are before the HQCJ on 17th July have all failed the PCIJ sniff test.  Without doubt Judge Vovk is the most notorious and nefarious (and should he be allowed to continue to run for the Supreme Court it will say all a reader needs to know about the process), but smelly is smelly despite the toxicity of the odour.

Indeed, to be clear, of 382 candidates many have passed the PCIJ sniff test as well as the HQCJ hurdles – certainly more than enough to fill the new Supreme Court Judge vacancies and allow for some competition for those vacancies from among the odourless.

Whatever the case, and whatever the outcome, 17th July brings to an end the first stage in the selection of judges for the new Supreme Court – and unsurprisingly the results of the first stage do not bode well for that which will follow.

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Immunity, impunity and non-liability – A VR fail again?

July 14, 2017

The reformist parliamentarians are not happy.

Once again, despite promises to do so, the Verkhovna Rada has failed to abolish parliamentary immunity en masse from its members.

Way back in November 2014, when the newly formed “post-revolutionary” Verkhovna Rada first made this promise, an entry was written pondering just what degree of immunity, non-liability and inviolability would result – listing all the variants currently operating across Europe.  Surely from among so many, the Verkhovna Rada would not have to reinvent the wheel?

Needless to say a very premature entry, for absolute immunity and impunity remains.

It remains to be seen if the Verkhovna Rada will manage to avoid addressing the issue in the Autumn plenary session once again.  After all it requires constitutional change and the political will to change it.

Article 154 of the Constitution states there are but two ways to introduce amendments for consideration when attempting to change it – firstly a submission to the Verkhovna Rada by the President, or secondly by not less than 1/3rd of the parliamentarians agreeing to introduce amendments.

Ergo in practical terms 150 current MPs need sign a motion to introduce amendments removing parliamentary immunity for parliamentary vote if the President does not – and for the purposes of public perception it is surely better self-generated when it comes to removing your own immunity than coming from the President.

Lo it has come to pass that on the final day of the current plenary session, 150 parliamentary signatories have been found – even if the proposed degree of immunity, non-liability and inviolability is not entirely clear .  (Photo courtesy of Alexie Goncharenko who is a signatory).  After all most nations afford their parliamentarians some limited legal protection in the course of their political duties.  A robust non-liability that provides for the sensible exercising of strictly legitimate political engagement,  combined with the minimum possible inviolability (if any at all), to definitively display that absolute immunity with impunity is over in Ukraine should be the goal

Whether a constitution changing 300 votes will be found remains to be seen.  Nevertheless 150 parliamentary signatories have paved the way for an attempt at a self-generated en masse immunity removal – and presumably there are now at least 150 votes in favour of doing so.

Another complete Verkhovna Rada fail again – or half a step toward progress?  How many, if any, among the 150 signatories are signatories that are simply there to be seen whilst holding the belief that sufficient number of peers cannot be found to arrive at the desired constitution changing 300?  A matter of PR rather than desire or expectation of success?

Whatever the case, it seems now far more difficult to simply ignore the matter throughout the Autumn plenary session.

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Nibbling away at Novinsky

July 13, 2017

The Ukrainian headlines will be anything but the subject of this blog entry.  The headlines will be of Mikhail Dobkin being subject to 3 successful Verkhovna Rada votes regarding his criminal investigation.  The first vote in favour of allowing criminal prosecution, another allowing for his arrest and yet another allowing for his detention.  (As a reader can see, stripping a parliamentarian is not a simple process.)

Also the legislation relating to pension reform successfully made it through the Verkhovna Rada,

Yet again the Verkhovna Rada failed to appoint the NABU Auditor.

All to be expected as a last minute rush to get legislation through the Verkhovna Rada (or further delay it) occurs with little over 24 hours left in the final plenary week before the parliamentary holidays.

However, away from the Verkhovna Rada the empire of MP Vadim Novinsky and his Smart Holdings Group  continues to be subject to both prosecutor and judicial attention.

There is not very much that can be said of Mr Novinsky that can paint him in a positive light – and a potted history is required to explain why, for it is relevant.

Mr Novinsky is a Ukrainian billionaire of the Opposition Block (and formerly of the Party of Regions).  He is however Russian – and a well connected Russian within Russia and Ukraine since the 1990s.

He is also a Russian Orthodox (Moscow Patriarch) of the swivel eyed hard core type.  Indeed prior to becoming the Ukrainian president, in Februray 2014, a certain Petro Poroshenko called him an “Orthodox Bitch”.  Mr Novinsky has openly mocked the Ukrainian effort to appeal to His All Holiness Bartholomew 1, the Archbishop of Constantinople, New Rome and Ecumenical Patriarch, to release the Kyiv Patriarchate from subordination to the Moscow Patriarchate within the Russian Orthodox Church.

Mr Novinsky regularly stokes the Orthodox fires in Ukraine and is also under investigation for allegedly falsely imprisoning and assaulting senior members of the Kyiv Patriarch clergy when it refused to play the part former President Yanukovych and others wanted it to.

Naturally a reader should not expect Mr Novinsky to go to jail – no genuinely “big fish” have gone to jail during the 3+ years President Poroshenko has been fighting corruption and criminality among the elite.  Neither should a reader expect any “big fish” to go to jail any time soon (let alone for a proportionately long time for the crimes committed).  For the foreseeable future, Mr Novinsky’s problems will not have incarceration among them.

Suffice to say that among Mr Novinsky’s outstanding connections in Russia, they naturally include Patriarch Kirill and Archimandrite Tikhon Shevkunov, President Putin’s personal priest – as well as other elite clergy that lead what is a Russian Orthodox Church well infiltrated by the Russian security services.

To expand upon those outstanding Russian connections, and without going into the details of the “smaller fish” and all the business entities that connect, Mr Novinsky’s business career took off after arriving in Ukraine in 1996 with Luk Oil.  Behind a subsequently very swift climb in the business world, Mr Novinksy can thank Russian oligarch Alisher Usmanov, Russian politician Viktor Chernomyrdin (aided and abetted by Mr Chernomyrdin’s good friend at the time, then Ukrainian president Leonid Kuchma) and a very dodgy character called Andrei Klyamko (who is associated with the notorious organised crime group Tambov).

Mr Klyamko was officially a co-owner of Smart Holdings (an umbrella structure) with Mr Novinsky until 2014 (and in all probability unofficially still is).  Matters of perception considering the events of 2014 no doubt dictating a move from formal to informal co-owner.

It certainly helps to have a leading Tambov man as a business partner when buying up large parts of the Ukrainian economy during the 1990s and 2000s – and raiding and stealing other enterprises you don’t want to buy.  Perhaps that is why, when engaging in criminality to create a business empire, people can mysteriously fall from their high rise apartment windows (such as the Head of the State Property Fund Mikhail Chechetov during the early days of business empire), or otherwise cease they to be a potential problem another way.

A reader can also draw their own inferences regarding any President Putin/Klyamko/Tambov connection from 1990’s Saint Petersburg and any symbiotic, successful relationships that followed.

By the mid 2000’s Mr Novinsky owned (and/or otherwise controlled) mines, energy, metallurgy plants, agriculture, pig farms, banks, and shipyards, including interesting purchases in Ukraine, Moldova and Bulgaria that were on occasion immediately “flipped” to Alisher Usmanov.  Deals involving Roman Abramovich are also strongly rumoured.

In 2007, Mr Novinsky exchanged his metallurgy plants for a reasonably decent minority share in Rinat Akhmentov’s SCM entity.  Thus via Mr Novinsky’s outstanding connections in Russia Mr Akhmetov got a never-ending supply of cheap Russian money if and when required for expansion, and Mr Novinsky had a business partner in Ukraine that left him not only de facto untouchable, but also within the inner sanctums of the Party of Regions – and direct access to the Yanukovych body itself.  Here however is it perhaps necessary to underline that business partners does not equal friendship.

Of the acquired Novinsky assets, it is the Smart Holding shipyards that are currently of interest – or two of them in particular.  The shipyards of Kherson and the Black Sea Shipyard at Mykoliev.

Over the past 4 or 5 years, Mr Novinsky has been accused by many – most vocally Yulia Tymoshenko – of deliberately killing the Ukrainian shipbuilding industry by buying the shipyards, closing down tooling shops, laying off the workforce, and then, via deliberately defaulted contracts with other Smart Holdings companies, bringing the shipyards to bankruptcy.

Indeed both Kherson and BSS Mykoliev Smart Holdings shipyards are currently subject to bankruptcy via proceedings brought by Smart Holdings’ Balaklava Mine entity in Sevastopol.

If a reader is pondering why a billionaire would buy Ukrainian shipbuilding yards simply to degrade the workforce skill sets and bankrupt and close those assets, then of course it is necessary to consider who benefits?  And who benefits from a degraded and depleted Ukrainian shipbuilding industry if not the Russian shipbuilding industry – and in a time of war, The Kremlin?

When adding Mr Novinsky’s provocative socio-religious actions and statements to what can be perceived to be deliberate economic and infrastructural sabotage, a reader may ponder just who, if anybody, Mr Novinsky actually works for (part time or full time or ad hoc) and perhaps who really sent him to Ukraine in the 1990s and with what task?

Indeed so broad and lofty are his Russian connections, so great his wealth, and so provocative his oratory and actions, Mr Novinsky is probably a greater and more dangerous irritant to Ukraine than (the over-hyped) Viktor Medvedchuk.

Whatever the case, the Kyiv courts on 13th July arrested all assets relating to the Mykoliev Black Sea Shipyard, including all shares.  Bankruptcy on hold.  A pre-trial investigation into nefarious contract changes lowering required inward investment/development per sale clauses surrounding the Kherson shipbuilding yard is also underway.

No doubt considerable compensation for contractual breaches will be sought from Smart Holdings by the State, for it was the State that sold these shipyards to Mr Novinsky with contractual obligations.  In short the State will seek money from Mr Nevinsky (and the invisible Mr Klyamko).  This notwithstanding the alleged criminality surrounding illicit changes to the contracts themselves post sale.

The State is clearly attempting to chip away at Mr Nevinsky and his history of corporate raiding, regular contractual breaches, and generally nefarious business life since his arrival in the 1990s.  Smart Holdings has been raided several times by law enforcement recently.

However caution is required, for despite a clear criminal history (albeit it remains to be seen if any evidence can or will equate to a successful prosecution) and very questionable loyalties, the way the State is tackling Mr Novinsky may well be perceived as persecution rather than prosecution – especially when ultimately Mr Novinsky will not go to jail – instead possibly “losing” assets and “suffering” some historical financial “corrections” being a far more likely outcome.

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