Ukrainians among region's wealthiest

Oct. 24, 2002, 5 p.m. |
Polish magazine includes three Ukrainians in the list of region's 25 richest people t people compiled by Poland’s Wprost weekly magazine.

The rating included Presidential Administration Head Viktor Medvedchuk, parliamentary deputy Viktor Pinchuk and Donetsk-based businessman Renat Akhmetov.

The rating, published on Oct. 20, was Wprost’s first attempt to estimate the net worth of individuals living in Central and Eastern Europe. For 10 years, the magazine has compiled lists of Poland’s 100 richest people.

The new list covering central and Eastern Europe features 12 Russians, five Poles, three Ukrainians, two Bulgarians, two Serbs and a Czech. The magazine based its estimates on the financial indicators of companies it believes the individuals controls, but didn’t elaborate on how it arrived at conclusions regarding personal wealth. It also didn’t say when the revenue figures were collected.

Russian Mikhail Khodorkovsky, who heads the Yukos oil company, topped the list with an estimated $3.7 billion in capital. Shakhtar Donetsk soccer club President Renat Akhmetov placed sixth on the list and was the highest-ranked Ukrainian, with an estimated $1.7 billion in capital. Akhmetov’s high place was due to his control over the Industrial Union of Donbas holding company ($1.8 billion in revenue), Azovstal ($700 million), the Alchevsk Metallurgical Plant ($350 million) and APC ($500 million), according to the magazine.

Labor Ukraine deputy Viktor Pinchuk placed 10th on the list with net worth of $1.3 billion. The magazine said Pinchuk, who is also President Leonid Kuchma’s son-in-law, controls the Interpipe industrial holding company ($730 million) and one of Ukraine’s largest banks, Pryvatbank ($800 million in assets). According to the report, Pinchuk also exercises control over the Krivirozhstal smelter ($1 billion in revenue) and the Nizhnyodniprovsky Pipe Mill ($250 million). Pinchuk’s holdings also include the ICTV, Novy Kanal and STB television channels, Fakty, Ukraine’s largest daily newspaper, and Ukrainian News, a news service, the report said.

Presidential Administration Head Medvedchuk was 18th on the magazine’s list, with an estimated $800 million net worth. The report claimed Medvedchuk, along with other individuals, controls Oshchadbank ($560 million in assets), Dynamo Kyiv soccer club (no figure available) and the Ukrainian Credit Bank ($100 million). The report said Medvedchuk also has influence over the UT-1, Inter, 1+1 and Tet television channels.

Akhmetov’s spokesman did not respond to the Post’s request for a comment on the story by press time. Pinchuk and Medvedchuk could not be reached for comment.

The magazine listed Russia’s ambassador to Ukraine, Viktor Chernomyrdin, 15th on the list with an estimated net worth of $1 billion.

Hungary and the Czech Republic, the region’s two fastest-growing countries, together managed to delegate only one person to the list. The magazine argued weakening ties between politics and private business in the two countries have prevented businessmen from accumulating wealth matching that of their eastern colleagues. The two countries, however, have managed to build a prosperous and numerically strong middle class, the report said.

Financial analysts gave the magazine’s rating mixed reviews. Oleksandr Lebedev, a financial analyst for New Century Holdings, a Kyiv-based investment fund, questioned the criteria used by the magazine to evaluate individuals’ wealth. “Using the estimated revenues of enterprises controlled by individuals is only one factor to consider,” he said. Lebedev agreed Akhmetov and Pinchuk should appear on the list but said he was surprised by the magazine’s estimate of Medvedchuk’s net worth of $800 million.

“Assessing affluence in Ukraine is complicated because objective data is not readily available,” he said.

Oleksandr Pecherytsyn, head of research for Alfa Capital, a Russian investment firm, said the rating does give a good idea of individuals’ net worth but warned from reading too much into the figures.

Pecherytsyn said his firm recently compiled a rating of Ukraine’s most powerful industrial groups using the value of the assets they control rather than revenue generated by companies. He said such ratings don’t include, for instance, funds held in bank accounts.

He said it was difficult to find a better way of estimating individuals’ net worth in Ukraine, where many financial figures aren’t made public.

“Of course, it’s an approximate estimate,” he said. “The only other way to do the rating would be to look at the documents containing real figures. But nobody will ever see them.”