Last year was a very good one for the Ukrainian financial and metallurgical holdings that led the country in business growth
Ukraine’s 50 wealthiest people are worth over $64 billion and the richest among them, Rinat Akhmetov, is in a position to become the most affluent person in what was once the Soviet Union, according to a ranking of Ukraine’s richest individuals published last week by Korrespondent magazine.
Last year was a very good one for the Ukrainian financial and metallurgical holdings that led the country in business growth. Their assets appreciated in value significantly, according to Korrespondent, a sister publication of the Post.
The findings are part of the second annual “Ukraine’s Richest” rating, which appeared in Korrespondent on May 26. The rankings, conducted with the assistance of Kyiv-based investment bank Dragon Capital, are based on the value of company assets for last year.
The rankings are based on filings with state securities and stock registrars and other public information. Dragon Capital has also provided estimations for Forbes magazine. The rating uses a comparative value for companies that are closed to public information – the values of analogous domestic and foreign companies are used to provide an estimate for asset worth.
In 2005, 30 of the country’s richest people were ranked according to their capital assets. In the latest valuation, all 50 businessmen are billionaires in terms of the Ukrainian hryvnia currency (Hr 5 is equivalent to $1). Although the assets controlled by only 14 of Ukraine’s richest were valued at more than $1 billion, the average value for assets belonging to all 50 businessmen was estimated at $1.3 billion. Their combined capital was $64.4 million in 2006 – twice the size of Ukraine’s state budget.
In comparison, the top 30 wealthiest individuals accounted for more than $38 billion in 2005.
All 50 Ukrainian billionaires are male; their average age is 45. Forty live in three cities: the capital Kyiv, and the industrialized cities Donetsk and Dnipropetrovsk. Twenty are from Kyiv, and every third business magnate studied at a university in the capital. All but two hold higher educational degrees. More than half of the richest are bankers, or otherwise involved in finance.
Last year was very good for the country’s moguls with assets in the financial sector. Significant Western capital injections were made into the domestic market.
The value of Ukrainian banks grew by 50 to 60 percent in 2006, while banks in neighboring Poland and the Czech Republic added only 20 percent in value, according to Korrespondent.
Eighteen of the nation’s richest hold interests in the metals industry. All of the country’s steel barons benefited from a worldwide hike in metal prices that occurred in mid-2006.
The rating also found that a growing number of businessmen are making their billions in property construction and development. A quarter of the 50 richest Ukrainians are involved in real estate.
The top five wealthiest men in Ukraine have not changed since Korrespondent and the Post published a joint ranking last year. They include Donetsk-based tycoon Rinat Akhmetov; Viktor Pinchuk, son-in-law to former Ukrainian President Leonid Kuchma; Ihor Kolomoysky and Hennadiy Bogoliubov, both co-owners of the so-called Privat business group; and Kostyantin Zhevago.
The richest grew richer by an estimated $10 billion year-on-year. Akhmetov’s assets alone grew by $3.8 billion to $15.6 billion in 2006. If his assets continue increasing in value at this rate into next year, Akhmetov will be poised to become the wealthiest man in the entire former Soviet Union, Korrespondent concluded.
The man reported currently to be the former Soviet Union’s wealthiest is Akhmetov football chum Roman Abramovich, whose value Forbes pegged at $19.2 billion earlier this month. Both men are still a far cry from Bill Gates’ $56 billion.
Wealthy civil servants
The rating lists 20 acting and recent public servants among the richest people in the country: 17 elected members of parliament and Kyiv city council (including Kyiv Mayor Leonid Chernovetsky), a deputy prime minister in the current cabinet, and two people who recently served on the National Security and Defense Council.
The civil servants’ combined capital amounts to more than $27 billion – the equivalent of total annual expenditures out of the state budget.
Regions are the richest
Where political allegiances are concerned, the Party of Regions, which backs Prime Minister Viktor Yanukovych, and the opposition Yulia Tymoshenko Bloc each had eight representatives in Korrespondent’s top 50. Regions’ members amassed $17.9 billion, while Tymoshenko’s allies in the business world accounted for $6.27 billion. The pro-presidential Our Ukraine and the Socialist Party had only one representative on the list.
Losers
Everyone included in the previous list grew richer over the course of 2006, except for three people: Valeriy Khoroshkovsky (metallurgy, media) dropped seven spots, as he was estimated to have lost $113 million. Lev Parzkhaladze (construction, food industry) fell 18 spots to number 37 with an estimated $23 million loss. The only other loser was presidential ally Petro Poroshenko (confectionary, machine-building, media), but he only lost $1 million. Poroshenko’s more than half-billion dollars placed him right in the middle of the list of 50.
Other Ratings
In March, Kyiv’s Focus magazine published a rating of the 100 richest people in Ukraine that included foreign nationals with business interests in Ukraine, including Lakshmi Mittal of India, the main owner of steel giant Arcelor Mittal, which owns Ukraine’s largest steel mill. Aleksandr Babakov and Konstantyn Hryhoryshyn, both Russian citizens, were also included in the Focus listing.
Apart from these exceptions, both lists presented largely similar results. The Focus rating listed several people not mentioned in Korrespondent at all, including such public personas as Hryhoriy Surkis (president of the Football Federation of Ukraine), Viktor Medvedchuk (former head of the presidential administration under President Leonid Kuchma), and David Zhvania (construction, oil, machine-building).
Focus estimated the combined value of all 100 to be only $70 billion.
In April, the editors of the Mysl monthly journal took the Focus rating and made several additions to the list of Ukrainian billionaires, inlcuding former President Leonid Kuchma, former premier Pavlo Lazarenko and opposition leader Yulia Tymoshenko.
