Forceful takeovers of properties and business are becoming an everyday affair in Ukraine.
If you leave your apartment in the morning and find that thugs in the entryway are blocking your return at night, don’t be surprised. If you discover that locks to your office have been changed without your approval, try to conceal the shock.
Both events are signs that your apartment building or your company could be under attack from raiders.
Forceful takeovers of properties, sometimes accompanied by dubious court orders that exploit Ukraine’s vague and loophole-ridden laws, are among the reasons why investors are not exactly lining up to do business here. In this nation, nobody – not the average citizen, medium-sized company or major foreign investor – can be assured of basic property rights.
“What Europe? It’s Zimbabwe! Here any stranger with false documents can solve anything. What money can be invested in Ukraine?” asked Andrea Palossi, an Italian businessman who lives in a Kyiv apartment building with residents who found their homes at the center of a business dispute recently.
The Anti-Raider Union of Entrepreneurs, an association of 300 businesses, has identified some 50 raider groups which are particularly active. Some are for hire. Others are so organized that they choose the victims.
The organization’s head, Andriy Semydidko, said anyone can be the next victim. But smaller businesses that can’t afford good lawyers are easy and common prey. In this lawless environment, factories, offices and apartments get muscled away. Other times the raiders’ goals are merely financial shakedown and blackmail.
“This year and last year there have been many cases when tenants were thrown out of municipal properties,” Semydidko, of the Anti-Raider Union of Entrepreneurs, said. “Hair salons, small shops, grocery stores, dressmakers, studios – the same pattern was used everywhere. Forged rent agreements introduced new tenants and then led to illegal privatization of the property.”
Not all cases are documented. But, the Anti-Raider Union of Entrepreneurs estimates that some 2,500 such attacks on properties took place in Ukraine in 2008, the highest number the organization has recorded since it started keeping track in 2005. This year’s total is expected to be at least as bad, Semydidko said.
Palossi, the Italian businessman, had an unhappy experience in the insecurity of property rights. He said residents in the building at 19A Volodymyrska, where he has lived for 10 years, were nearly victimized by raiders.
According to residents, the trouble started when an affluent businessman decided to build an additional floor against their will. Residents hired security guards and parked cars outside the building to prevent construction workers from entering. This businessman then allegedly targeted the next-door building, located at 18A Sofiyivska Street. On Sept. 8, carrying a court order, about 30 men in military uniforms took over the attic of that building.
“People just come, occupy the house by force, and your private property right doesn’t exist, actually,” Palossi said. “Here there is no law at all.”
Ihor Dotsenko, the businessman accused by residents of having organized an improper attack, told the Kyiv Post that all of his actions were legal. “These measures were conducted by the court enforcement authorities. They were implementing a court decision,” Dotsenko said. However, Dotsenko refused to provide the Kyiv Post with any supporting documentation, while residents supplied the newspaper with a court decision supporting their claims.
The residents even hung a banner on their building which read: “Our houses have been occupied by raiders. Who will be next?”
That is a very good question. Not only property, it seems, is coveted.
On Oct. 1, Shevchenkivskiy district police in Kyiv launched a criminal case against former managers of BTA bank, accusing them of forging documents to steal 40 percent of the bank’s shares.
Just a week before that, a central hotel in Kyiv overlooking the country’s main square, the Kozatskiy on Maidan Nezalezhnosti, reported an attempted forceful takeover. The group of 30 young men in sports clothing failed, however, to gain control of the building, which belongs to the Defense Ministry. They broke the elevator and cut off telephone lines to prevent staff from calling the police.
One of the most violent corporate raider attacks took place in September. More than 100 individuals armed with weapons, including guns, clubs and tear gas, tried to forcefully take over the Tavria brandy factory in Nova Kakhovka, Kherson region. Nearly 40 people were injured and 169 arrested. Two police officers suffered gunshot wounds.
There are plenty of smaller raider attacks that go unreported, according to the anti-raider union. And the threats go back years, and even involve multinational giants. For example, U.S.-based agricultural giant Bunge faced a 2004 challenge to its ownership of a sunflower oil crushing plant.
Semydidko named dozens of addresses where property takeovers have happened, including some on Kyiv’s main street, Kreshchatyk and others right next to the country’s parliament. “While officials are taking care of their own affairs, the victim ends up face-to-face with an aggressive, well-formed group, specializing in property takeovers,” Semydidko said.
State officials, judges, prosecutors, lawyers, and police officers – all lines of official defense in properly functioning nations — should be helping to protect businesses and citizens.
Instead, they are often accomplices.
With no one to turn to for protection, Semydidko said victims often have to fight alone. For them, Semydidko said, the choice is “sink or swim.”
