Interior Minister Arsen Avakov has accused fuel and energy tycoon Serhiy Kurchenko of causing the state $1 billion in damages through tax evasion and other schemes.
Avakov’s Facebook page states that Kurchenko, 28, and his fuel and energy VETEK conglomerate evaded $875 million in taxes and caused state-owned oil and gas company Naftogaz to lose $200 million in revenue.
Kurchenko, many believe, is a proxy for assets belonging to ex-President Viktor Yanukovych and his inner-circle.
He denied the charges on VETEK’s official website: “I am an honest Ukrainian businessman who has always been investing in Ukraine.”
According to Avakov, four companies within VETEK imported oil products worth $2.7 billion with the aim of exporting the processed gasoline. They are Zovnishtransgaz, Petrol, Petrol-Forwarding and Armada-Plyus. However, the companies never exported the gasoline, and instead sold it on the domestic market. No customs duties or taxes were paid.
“During searches 13,000 tons of oil products have been expropriated, also accounting records and computer equipment. Odesa Oil Refinery is going through a revision,” wrote Avakov.
Eleven criminal investigations have been opened related to Kurchenko’s businesses in several Ukrainian regions. Kurchenko denied this. Investigators are trying to identify money legalization schemes earned on the sale of gasoline, according to Avakov.
On March 5, the European Union froze the assets of 18 former high-level officials and businessmen, including fugitive ex-President Viktor Yanukovych. Kurchenko was on the same for allegedly being close to Oleksandr Yanukovych, the ex-president’s older son.
In recent weeks, Prime Minister Arseniy Yatseniuk has accused Yanukovych and his inner-circle of absconding with up to $70 billion and leaving the state treasury virtually dry.
“I am surprised that I am mentioned in the list of people that the European Union is conducting limiting measures against,” stated Kurchenko. “But even more I am surprised with the formulation: ‘A person, who is a subject to investigation for participating in the crimes related to embezzlement of public funds and their illegal withdrawal out of Ukraine.’”
Reportedly, he left Ukraine long before Feb. 22, when Yanukovych’s regime was brought down. He currently is in Moscow, according to Komersant-Ukraine business daily.
On Feb. 24, journalists found approximately 30 trash bags filled with shredded VETEK company documents in a parking lot at Arena City entertainment center, where it once occupied to floors of office space. A team of investigative journalists has been working to restore these documents.
Korrespondent magazine estimates Kurchenko’s wealth at $2.4 billion. VETEK is a conglomerate which manages assets in energy, banking, media and sports. Odesa Oil Refinery, Kherson Oil Transshipment Complex, Brokbiznesbank, Real Bank, Ukrainian Media Holding and Metalist football club are its main holdings.
The company is an important player on the local gasoline and liquefied natural gas markets. VETEK has been purchasing almost all the liquid gas provided by state enterprise Ukrgazvydobuvannya through auctions over the last two years. Kurchenko furthermore owns several entities abroad, such as the Sparschwein gas station chain in Germany.
Once allegedly benefiting from Viktor Yanukovych’s protection, he is now selling his assets en masse since the change in government does not leave much room for his business schemes. Kurchenko is in negotiations with Rosneft, Russia’s oil giant, to sell the Odesa Oil Refinery that is being investigated by police. Media reports say there are several bidders for his media holding, which includes Forbes Ukraine, among businessmen close to the current government. There are serious doubts Kurchenko will be able to sell these entities at least at the rate of their acquisition cost which is approximately $250 million for the Odesa Oil Refinery and $360-400 million for UMH.
Kurchenko will also have problems trying to sell his Brokbiznesbank and Real Bank, both of which the central bank has categorized as insolvent and where it installed provisional management on March 3.
Kyiv Post associate business editor Ivan Verstyuk can be reached at [email protected].
