You're reading: Phoenix Capital owner leaves Ukraine after losing claim against tax service

The owner of Phoenix Capital (Kyiv), Oleksandr Omelchuk, has left Ukraine after losing a case heard by the court of appeals against the State Tax Service of Ukraine, the wife of Omelchuk, the opposition lawmaker Lesia Orobets, has reported in her blog, saying that the court ruling was ordered by the authorities.

According to information published in the court information system,
the Economic Court of Appeals in Kyiv upheld a ruling of the District
Administrative Court in Kyiv, which rejected a claim of Phoenix Capital
against the tax service, in which the claimant asked that certain tax
service decisions be declared illegal and cancelled.

“The court left the counter claim of Phoenix Capital LLC without
satisfaction and the ruling of the district administrative court in Kyiv
of March 4, 2013 unchanged,” reads a court ruling of June 12, 2013.

The investment company explained its claims by the fact that tax
service decisions were made, taking into account the groundless
allegation that deals on the sale and purchase of securities between
Phoenix Capital LLC and Cypriot Okland Holdings Limited were illegal,
while the court of the lower instance did not establish all of the
circumstances that were important in the case.

In turn, the court of appeals upheld the conclusions of the court of
the lower instance and believes that Phoenix Capital carried out
transactions on the purchase and sale of securities to minimize tax
liabilities and gaining tax benefits with an affiliated company, the
non-resident Okland Holdings Limited.

The court said that the fact that the claimant referred its having
primary documents confirming the economic transactions is not enough to
establish the lawfulness of the agreements, as the tax service proved
that there were no legal grounds for the issuing of the documents.

The investment company was accused of being responsible for the fact
that Okland Holdings Limited was represented by employees of Phoenix
Capital, which was confirmed after an investigation.

The court of appeals also said that according to the minutes of the
general meeting of participants in Phoenix Capital LLC of July 9, 2008
and the company’s regulations of 2008, Okland Holdings Limited held a
99.9% stake in the limited liability company and it is one of its
participants.

According to the regulations of the company for 2012, the participant
of the company is Klevia Ventures Limited with a 99.9% stake. According
to data presented by Donetsk-based Pivdencombank, Phoenix Capital LLC
is indirectly under the control of a person named in the document as
“person_3” (in the case the person is identified as Omelchuk). The
grounds for the identification is the fact that “person_3” is the holder
of shares in Phoenix Management International Limited, which holds a
100% share in Klevia Ventures Limited.

According to a report of the representative office of Okland Holdings
Limited of August 26, 2008, the actual owner of the company is
“person_3.”

Thus, the jury completely upheld the conclusions of the court of the
lower instance that “person_3” actually managed Okland Holdings Limited
and Phoenix Capital LLC.

As reported, the investigation department of the tax police of Kyiv
on November 13, 2012 conducted a search in the office of Phoenix Capital
LLC, which was initiated by the Prosecutor General’s Office in Kyiv.

The press service of the State Tax Service reported that the
investigators of Kyiv’s tax police are now investigating a criminal case
opened on charges of the counterfeit of Phoenix Capital LLC’s
foundation documents under Article 358 of Part 1 and Part 4 of the
Criminal Code of Ukraine and against officials of Phoenix Capital LLC on
accusations of a crime under Article 212 of Part 3 of the Criminal
Code.

On November 14, 2012, the investment company reported that its
operations had resumed. The company denies the tax service’s accusations
of the evasion of taxes worth over UAH 4 million by the company.

Phoenix Capital was founded in 2008. Its core business includes
underwriting, brokerage, dealer, depositary and asset management
activity on the stock market.

According to the State Commission for Securities and the Stock
Market, Phoenix Capital LLC was founded by Cyprus-based Klevia Ventures
Limited with 99.99914% and Phoenix Capital CEO Oleksandr Skubenko with
0.00086%.

Phoenix Capital’s charter capital by the end of 2011 was UAH 7
million. The company’s net revenues in 2011 totaled UAH 980.9 million
and its net profit was UAH 560,000.