Archive for October 17th, 2018

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The resurrection of the late and lamented Dmitry Malinovsky

October 17, 2018

The late and lamented Dmitry Malinovsky has been resurrected – or more accurately found living in a castle he had bought in Dijon, France – together with a classic Rolls Royce and a few Salvador Dali paintings.

He was promptly arrested during a joint Europol, Franco-Ukrainian investigation.  Ukraine has already requested his extradition.

Mr Malinovsky is accused of stealing Euro 12 million (or so) when he worked at the Odessa Port Side plant and then subsequently fraudulently creating his own death bureaucratically – thus disappearing to Dijon, France in 2014/15 ne’er to be seen again (as Dmitry Malinovsky, citizen of Ukraine).

Naturally the crime and particularly the efforts to fake his death on paper have caused some headlines – especially when caught in a French castle he’d bought with stolen funds.

But when, why, how and in what circumstances – and why bother to fake a death on paper when so many in Ukraine steal far more and do not go to such bureaucratic lengths as faking their own death?

Euro 12 million is, after all, small beans in comparison to many other thefts of funds in Ukraine by officials in office.

Perhaps an empirical look at the circumstances and vested interests would shed some light?

A reader need return to late 2014/early 2015 when Mr Malionvsky is suspected of his theft.  Odessa is witnessing the swapping of leadership of institutions and SOEs, not for the sake of combating corruption, but for the sake of redirecting corrupt money flows.  Organised criminality has long withstood the changing of political power in Odessa, but this time things are a little more fluid in certain quarters.  The Rubicon of Ukrainian blood has been spilled during the Revolution of Dignity.  All previously existing agreements with Tatar criminal gangs and Crimean authorities are off due to annexation by Russia and the Russian mob slowly moving in.  The additional attention of dealing with Crimea is not welcomed.  De facto, organised crime in Odessa becomes “patriotic” as a result.

Outside, or on the periphery of organised criminality, opportunities arise for those that know how things work during this period of flux.

At this time (and currently) Odessa Port Side is a State Owned Company that has long been scheduled for privatisation and that still has not been privatised.  In is in huge debt – with a considerable amount (over $200 million) owing to Dmitry Firtash, oligarch in exile in Vienna.

Like most SOE, there are also small shareholders of minority stakes.

There is also a long list of creditors beyond Dmitry Firtash, including OdessaEnergo.

Indeed OdessaEnergo was quite content to allow Odessa Port Side to run up huge debts – the plan being to make OPS bankrupt and seize it as an asset to repay the debt.  Among those behind OdessaEnergo were Alexander (Angel) Angert, Odessa’s most influential organised criminal (associated with Mayor Trukhanov, Leonid Minin, Alexander Zhukov, Alexander Galanternik etc, etc) and also Alexander Babkov, a Russian “businessman” currently under sanctions and the driving force behind VS Group (And VS Energy as a result).  There is also a certain Mr Granovsky, close to President Poroshenko, with “fertilizer interests”

Throw into the mix also the Surkis brothers and behind them Igor Kononenko who seemed determined to prevent the OdessaEnergo plan of claiming Odessa Port Side as payment for accumulated debts via the corrupt courts of Odessa.

In short organised criminality was strong if also in flux, political interest was that of assuming control of corrupt cash flows, the oligarchy and criminal hierarchy were fighting for the future of Odessa Port Side – and so opportunity arises for those with a one-off plan for personal enrichment as all eyes are elsewhere and looking at a bigger picture.

It would appear that Mr Malinovsky took the opportunity to redirect a pre-payment for fertilizer to the tune of Euro 12 million (or so) and redirected it to an offshore.  With or without any assistance or encouragement from those listed above (or others unlisted) is currently a matter of speculation.   Also a matter for speculation is quite whose Euro 12 million pre-payment it was.

Whether it was with tacit approval of any one of the above, it was clearly not done with the approval of all as they were engaged in a battle for control – and who was temporarily holding power over Odessa Port Side at the time is also subjective in judgement.

Whatever the case, the accusation that this theft is from “State Funds” is somewhat legalistic in its nature, for assuredly that Euro 12 million would not have been delivered to “State Funds” but rather redirected elsewhere anyway.

Nevertheless, turning over that stone and peering at what is underneath is unlikely to occur in any subsequent court hearing.  Officially the theft is from OPS and thus “the State”.  Assuredly that is all that will be declared in open court.

A reader therefore might (perhaps rightly) assume that the bureaucratic desire (and accomplishment) of Mr Mlinovsky to fake his own death and produce fraudulent death certificates etc., was not to escape Ukrainian justice – but rather to escape the justice of any number of those named above (or perhaps omitted but with an equal reputation for “robust business”).

Another question is why Mr Malinovsky appeared upon the Europol, Franco-Ukraine radar now?

Odessa Port Side is up for privatisation still.  Mayor Trukhanov at the end of August 2018 appointed Ivan Donchenko in charge of its privatisation locally.  It was something of a surprise (cyncism) that the previous appointee resigned unexpectedly.

Mr Donchenko is a share holder in the minority company within Odessa Port Side.  He is also a small share holder in OdessaEnergo (and thus indirectly associated with VS Energy, VS Group and the sanctioned Russian “businessman” Alexander Babkov) who are hotly tipped to actually purchase Odessa Port Side this time.  Clearly there is no small amount of vested interest at play – and certainly a tacitly turned blind eye by a State wanting to get this loss making asset off of the books.

And it is “of the books” that perhaps sealed the fate, the identification and location of Mr Malinovsky, for there are few able to fake their death without somebody knowing they are still alive and Odessa is a small place the higher up the greasy and nefarious pole an individual climbs.

It was perhaps decided that for the sake of “the books” or a new owner with a penchant for French castle’s in lieu, that Mr Malinvsky was identified to law enforcement.

That said, perhaps the Europol flags were simply raised via standard procedures and protocols – but if so, Euro 12 million is a fairly low bar considering that scale of corruption.

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