You're reading: Kharkiv’s Richest Man Sounds Off

Oleksandr Yaroslavsky grew up wanting to be rich, but he wasn't sure how. "In childhood everyone wanted to be a pilot or astronaut... I wanted to be wealthy," he told the Ukrainian version of Forbes.

Having made his first $100,000 in the late 1980s, he is worth $770 million today by recent estimates – so he clearly figured out how to achieve his childhood dream.

He says he did it by mostly acquiring distressed or undervalued assets and then selling them for a higher price after making improvements.

When Yaroslavsky, 55, bought the Metalist soccer club in 2004, it was languishing in the second tier. He would sell it eight years later for a reported $300 million, including his 30-percent stake in the Metalist Stadium, training camp and soccer academy.

Similarly, he turned UkrSibbank into the nation’s third largest private lender before selling a 51-percent stake to French BNP Paribas Group in 2005 for a reported $700 million. He would later sell his other stakes in the bank. Other shares in companies he has divested over the years include mobile phone operator Kyivstar, chemical producer Azot, Merefa Glass Company, Kharkiv Tractor Plant and tire maker Rosava.

Today his DCH Group employs some 3,000 people and is involved in property development, the production of construction materials like granite and stone, retail – he owns a stake in the Karavan megastore chain – the hotel and airport business, as well as sports – Yaroslavsky still owns a rugby club.

“I’m a businessman, not an oligarch,” he told the Kyiv Post by phone from London on Sept. 15. “What I do is nothing different than what Warren Buffet does…does he own political parties? I don’t own pocket political parties or media.”

Oleksandr Yaroslavsky (R) with Victor Pinchuk during a break at the12th annual Yalta European Strategy meeting on Sept. 11 in Kyiv.

Oleksandr Yaroslavsky (R) with Victor Pinchuk during a break at the12th
annual Yalta European Strategy meeting on Sept. 11 in Kyiv.

Yaroslavsky’s portfolio also includes Kharkiv’s first five-star hotel – Premier Palace Hotel Kharkiv – that he built in time for the city to co-host the 2012 European soccer championship. In total, he said he invested $300 million to get the city ready for the extravagant event that also included upgrading the local airport and related infrastructure.

“Finding a foreign investor to invest at least 5 percent of what I did for the Euro-2012 would’ve been difficult,” Yarsoslavsky said. “We had a force majeure situation and we united and got it done.”
Kharkiv, as the nation’s second largest city with 1.4 million people, would see additional financial injections if it was run by “honest people,” he said. “We (also) need to create a legislative base…right now there are thimble-riggers managing the place who have no relation to Kharkiv,” Yaroslavsky said.

“There are pre-Maidan people still in place, we all know who they are. I don’t have to name them”
It wasn’t smooth riding for him when Viktor Yanukovych was elected president in 2010. His regime started to behave “very aggressively, they took away assets, engaged in (company) raiding,” Yarsoslavsky told Liga Biznes earlier this month. “It was quite difficult fighting with this monster, it was practically impossible.”

Pressure got to him, and he had to sell his beloved Metalist soccer club to Yanukovych insider Serhiy Kurchenko, both of whom are fugitives wanted in Ukraine on criminal charges.

Two days before the sale was announced, Yaroslavsky said he would stop investing in the region.
“I don’t want to invest money in such an investment climate, because I cannot understand the attitude of the local authorities,” he told Interfax-Ukraine. “Do they have a lot of investors who invest hundreds of millions of dollars? Or are my dollars different in color?”

He then issued an emotional news release of the club’s sale on Christmas Eve 2014.

“There is only one (and this is the main) reason why I have to leave the club: The confusing claims of the city government on me as the investor and as a result, an unprecedented psychological pressure exerted on the team and staff,” he said. “This unhealthy atmosphere threatens all that was created by hard work of many people.”

When Yanukovych allies Mykhailo Dobkin was Kharkiv governor and Hennadiy Kernes was mayor, Yaroslavsky wasn’t invited to attend the Kharkiv investment forum. This year was the first time since 2010 that the multi-millionaire was asked to appear. He gladly did, including his DCH Group as co-sponsor of the event.

Asked what his main message to investors was, Yaroslavsky said: “I wasn’t asked to speak really, I didn’t say much. I’m not…a Nostradamus that I could predict the future. I’m small time actually, a practitioner.”

He lauded Kharkiv’s advantages, noting that it has the nation’s highest university student population.

“All of Kharkiv has huge scientific potential. The potential is in agriculture, information technology, human capital and in design…they (government) just need to make the right rules, honest rules,” Yaroslavsky said.

Security is a concern in Kharkiv, which has experienced a spate of explosions attributed to pro-Russian terrorists since the Kremlin invaded eastern Ukraine last year.

“That’s what law enforcement is for, they should answer for the security situation. Yes, there is unease. This is my native city, my brother and mother live there,” Yaroslavsky said.
Regarding which industry or assets are currently undervalued, he just said that he looks at each investment “very carefully.”

“Ukraine first must change the investment climate…There are people who are oligarchs in parliament. Look at the deputies (members of parliament), do you see change. There’s no sense in investing now,” Yaroslavsky told the Kyiv Post.

Further raising his profile, Yaroslavsky’s DCH Group became a last-minute sponsor of this year’s Yalta European Strategy meeting that took place in Kyiv Sept.10-12. And the company next month is supporting Agroport-2015, the only Ukrainian agricultural conference that is included on the calendar of the Food and Agricultural Organization of the U.N.

Yaroslavsky doesn’t want to serve in government or enter politics, although he and his brother, Oleksiy Yaroslavsky, served as lawmakers in 2002-2006, getting elected on the Green Party’s ticket.

Concerning his latest property development, the colorful Vozdvyzhenka commercial and residential neighborhood in Kyiv’s Podil district built in the baroque and “Kyiv modernism” styles, he said: “It is a very successful development. It may look like a ghost town, but I’m not selling much there yet until everything is finished. There’s still infrastructure to finish. I think that by next summer it will be completed.”

He didn’t provide a price tag for the development.

Kyiv Post editor Mark Rachkevych can be reached at [email protected]