An article by Forbes Ukraine published in the December issue says that a little-known, mysterious company established in 2008 with just $8,000 in rural Kharkiv Oblast has in the last two years become a heavyweight player on Ukraine’s oil and gas products market.
Co-authored by Sevgil Musaeva and Oleksandr Akymenko and based on information from an unidentified government source, the article describes the GazUkraina-2009 group of companies as making huge inroads in importing hundreds of thousands of tons of oil products, being a consistent winner of liquefied gas auctions at state-owned companies and also for public procurement contracts.
Forbes alleged the group has possible ties with member of parliament Artem Pshonka, the general prosecutor’s son, and may have been given contractual preferences from brothers Serhiy and Oleksandr Katsuba, who until recently have and had high level posts at Naftogaz and a subsidiary of it.
Serhiy Katsuba denied to Forbes any sort of patronage regarding the group of companies, while Pshonka didn’t respond to an email message left on his personal website and parliamentary address. Forbes said it couldn’t reach Pshonka for comment. Serhiy Katsuba didn’t return a Kyiv Post telephone message left with his secretary.
Pshonka told Donetsk’s Ostrov news website that the Forbes article “didn’t contain any facts,”and called the alleged link between him and the group of companies “a mistake.”
The article also alleges that GazUkraina-2009 hadn’t paid excise duty on some 40,000 tons of liquefied gas that it had sold on the Ukrainian market since the beginning of 2012, more than a quarter of what Ukraine imports overall. In addition, Forbes wrote that the group of companies had imported up to 400,000 tons of oil products a month from May to October of this year. The magazine wrote that 50 percent of the liquified gas market in Ukraine belongs to GasUkraine-2009.
Allegedly more than 50 companies possibly make up the group, which, according to Forbes, had won a total of $262 million in government orders since 2011. In addition, the GazUkraina-2009 group owns, the Forbes article says, a bank, an insurance company, 150 gas stations and had $104 million in revenues in 2011.
In a response to Forbes, GazUkraina-2009 denied having any relation to the more than 50 companies the publication named in the article. It did acknowledge to Forbes that it consists of “30 companies that are engaged in the import and export, retail and wholesale of liquefied gas and light oil products in Ukraine, Russia and Europe,” and that it has plans to open up to 700 gas stations in one and a half years.
Forbes named Serhiy Kurchenko as the man behind the group of companies. Unidentified sources described the 27-year-old as a “person of natural gifts.” But only a man identified as Andriy Koshel would speak to Forbes on behalf of GazUkraina-2009, whose business card only listed his name and telephone number.
At the time of publication, GazUkraina-2009’s website was not functioning. The Kyiv Post left a message for Kurchenko at a Kharkiv telephone number; and an email message bounced back from the alleged company’s server.
Although the domain name of GazUkraina-2009 and legal address are registered in Crimea, its director’s residence is registered in a Kharkiv village apartment building that is actually occupied by a senior citizen, Forbes discovered. Yet the company officially lists a Kharkiv city telephone number — the same number the Kyiv Post dialed — also the same number that it has listed on bids to Naftogaz Ukraine and three of the state-owned monopoly’s subsidiaries.
One group company, Kyrovohradgaz-2000, also listed the same Kharkiv telephone number on bids. It won $24 million in public procurement contracts in 2011.
Forbes reported that some of the 50 companies in the group have been used to create the appearance of competition for public procurement bids. Often, they were the only bidders.
Citing court documents, Forbes wrote that one company of the group worked in tandem with two other group companies to orchestrate a fictitious bankruptcy to avoid paying $1.2 million in taxes.
Altogether, Forbes found 50 court decisions involving the companies on the list, most of which involved alleged tax liablity minimization. Forbes cited numerous court documents that referred to certain group companies with terminology such as, “fictitious enterprise,” “not conducting (business) activity,” “absent legal entity at place of business,” “created the appearance of an enterprise that engaged in financial business transactions,” and “takeover of large sums of state-owned assets.”
In one case, the deputy general prosecutor of Kharkiv Oblast opened a criminal case against an investigator from the police’s economic crimes unit for abuse of authority after he launched an investigation into one of the listed companies for allegedly forging a document that purported a company general shareholders meeting took place. The abuse of authority case was opened based on a complaint filed by one of the listed companies.
One group company on the Forbes list, Universalopttorh-X, has had numerous media mentions for its role in scandalous public procurement transactions.
According to procurement watchdog Nashi Hroshi, the company was allegedly involved in the sale of pipes to a Naftogaz subsidiary at a $9 million markup. According to Forbes, the company has won $55 million in government tenders since 2011.
Other coincidences, according to Forbes, include the fact that all the group companies were founded between 2009 and 2011 by people from Kharkiv oblast, many of whom have never conducted business activity before, yet became general directors of the companies they founded. Several months before registering the companies, some company founders, Forbes said, had searched for jobs on employment websites. Furthermore, initially some companies had registered addresses in the same building or in neighboring buildings in Kharkiv.
Suddenly in the spring 2011, Forbes wrote, many of the group companies changed their Kharkiv domiciles to ones in Crimea.
An additional coincidence, according to Forbes, is that the statutes of some 20 companies were notarized by two Kharkiv notaries.
Forbes also found that three group companies co-founded an insurance company. Forbes also alleges GazUkrainy-2009 controls Real Bank, where it has an account.
GazUkrainy-2009 denied controlling the insurance company and bank.
One group company named by Forbes won a bid to do road work in 2011-2012 in the election district of Zaporizhzhya Oblast where Artem Pshonka successfully ran for parliament in October. The only other bidder for the job was also a group company. Pshonka had boasted on his campaign website that he had lobbied for state money to do roadwork in that area.
Forbes suggested that the Katsuba brothers, who hail from Kharkiv Oblast, may have given the GazUkraina-2009 group of companies preference for contracts at their respective posts at Naftogaz and one of its subsidiaries.
Oleksandr Katsuba was the deputy director of economic affairs at Chornomornaftogaz since 2010 before being promoted to replace his brother, who got elected to parliament, as deputy head of Naftogaz.
Older brother Serhiy Katsuba, a former Party of Regions Kyiv Oblast Council member, headed the procurement department at Naftogaz Ukraine and held the title of deputy director.
Kyiv Post editor Mark Rachkevych can be reached at [email protected].
