Nationality: UkraineBorn: 1958Job: Managing partner of HLB UkraineHow to succeed in Ukraine: "In these difficult times you need to have a sense of purpose, self-organization... high stress tolerance, thorough analysis of business-processes, be fearless, a risk-taker. EU integration and reliable partners are also guarantees of success and prosperity."
Editor’s Note: In 2015, the Kyiv Post will offer more coverage of the leaders who run Ukraine’s biggest and best companies in the CEO Watch feature.
“The investors’ trust has been lost with this war,” complains Valerii Bondar, managing partner of HLB Ukraine, an audit and tax service company.
The best way to attract investors is through the government giving out tax rebates, he says. Shadow salaries should be also taken out to the light.
Creating a free economic zone with the European Union in Ukraine’s western regions to boost agriculture production would help too, explains Bondar, a native of Kirovograd Oblast who graduated from the Kyiv Economics University in 1979. This way, he says, the country’s war-torn east wouldn’t depress all of the nation’s foreign trade.
Before the crisis, HLB Ukraine had around 120 clients annually whereas today they have 65-70 – almost a 50 percent decrease. “If not for the connection with an international organization, we would have experienced a real collapse,” he says.
The company started its business in Ukraine in 1994 and now consists of five smaller entities providing such services as accounting and forensic expertise. Since 2007, a company has been a part of HLB International, a worldwide network of accounting firms and business advisors with headquarters in London that emerged in 1969.
By 2008, Ukrainian office was able to provide 50 different audit services. Today, HLB Ukraine has about 50 employees.
Due diligence, which is checking the financials behind the business deals, is the company’s most profitable service on the Ukrainian market. “When you are talking about a multimillion-dollar transaction the question is not about the price but about the quality,” says Bondar.
Big clients were mostly taken by the Big Four – Deloitte, EY, KPMG and PricewaterhouseCoopers – but that doesn’t mean that HLB’s quality of service is worse, affirms Bondar.
He says that his company’s advantage is that auditors are locals and have a better understanding of the risks in Ukraine. “In a year we can do 100 audits,” Bondar emphasizes.
About a half of their customers are foreigners. Most of the clients are medium-sized businesses such as Colin’s, Loreal, Avis and Christian Dior, although HLB Ukraine also serves Ukraine’s state postal service Ukrposhta and oil and natural gas extracting company Ukrnafta. About 15-20 of their clients are international donor projects.
About 1o percent of HLB Ukraine’s clients are offshore entities and Bondar does not see more coming into the market anytime soon. Ex-President Viktor Yanykovych’s administration did a lot of money laundering involving the offshores, while the current government is much more transparent, he explains. “I welcome the new government because finally we started to work. Defeat corruption and you will build a government,” says Bondar. “There needs to be order in everything.”
Now the government is also obliging audit companies to expose fraud. Previously, investors were losing trust and the government didn’t investigate crimes, says Bondar. He adds that the government is changing the audit system such that the Ministry of Finance will not have as much control as it did before.
Bondar is not satisfied with everything the government is doing, such as their approach to overhauling transfer pricing, exploited by many companies to avoid taxes. Before, only 15 percent of enterprises were affected by it, while today the figure has grown up to 50-60 percent, the auditor estimates. The fines are just too high, he says.
Nevertheless, he doesn’t plan to move abroad to do business. The father of one daughter, who is also employed at HLB, Bondar enjoys sports and frequently shops at Boss for suits and considers himself a fan of Interstellar, a scinece fiction movie.
Kyiv Post staff writer Ilya Timtchenko can be reached at timtchenko@kyivpost.
