A statement built on lies is a statement that’s harmful. The statement of Sergii Leshchenko in the Kyiv Post (“West needs to help Ukraine tame Akhmetov” – July 17, 2020) is based on lies. Either by design (which is unworthy of a man who is a supervisory board member of Ukrzaliznytsia) or out of lack of professionalism and ignorance (which is unworthy of an investigative journalist). Executed in a manifest form, his text is a libel.
Since Leshchenko has neither contacted System Capital Management (Editor’s Note: SCM is owned by billionaire oligarch Rinat Akhmetov) or SCM businesses to learn their position, nor considered our public position which is readily available in media and on our websites, we are forced to address what he wrote publicly.
I am certain that Leshchenko’s false statement is rooted in its author’s bias rather than ignorance. Here I am going to show you that Leshchenko is misleading the Kyiv Post audience.
I’ll explain why his manipulative calls based on lies go against the interests of Ukraine but serve the interests of oligarchs who own the ferroalloy businesses, as well as Russia.
And I’ll expose the propaganda techniques employed by Leshchenko.
Before going into arguments, I shall point out that I am confused as to the capacity of that column’s author. He sounds neither like a journalist (there are no opinions of the parties) nor like an Ukrzaliznytsia’s supervisory board member (otherwise that would be a piece on combatting corruption inside that national monopolist).
He sounds more like a lobbyist for specific business interests, which Leshchenko preemptively and hastily disclaimed (“I cannot be accused of pro-Kolomoisky rhetoric.”) (Editor’s Note: Ihor Kolomoisky is a Ukrainian billionaire oligarch.)
As is commonly known, the front-most ferroalloy businessman in Ukraine is Kolomoisky. His partner in this business, as seen from the London court materials, is Victor Pinchuk. However, in his all “anti-oligarch” rhetoric, Leshchenko delicately leaves out Pinchuk and his Interpipe/EastOne business group.
I will give three the most basic examples of Leshchenko’s lies in his text (although it has so much misinformation that an entire refutation might be in order).
Statement No. 1: “SCM controls 25% of Ukraine’s GDP.”
It is a lie with nothing behind it, other than similar comments by Kolomoisky.
Leshchenko fails to provide any evidence, as there simply isn’t any. In 2012, E&Y estimated the contribution of the SCM businesses to the Ukrainian economy. SCM’s direct contribution was 4%, which is six times less than what Leshchenko is pointing at.
Statement No. 2: “Akhmetov uses international investors as a human shield for any attempts to correct the skewed tariffs. This tactic is like taking a hostage.”
A false and manipulative statement.
The government publicly promised the renewable energy system investors a specific playing field (in particular what tariff the green investors were going to get and for how long) and formalized this in a special law.
The foreign investors brought their money to Ukraine on the back of these very guarantees. Now that the money has been paid in and the renewables sector has grown exponentially, the state is saying that it changes the rules and wants to pay less for green energy. So all the investors (the international and the Ukrainian alike) defend their Ukrainian investments, just like they would any other.
Now, using Leshchenko’s terminology, the ferroalloy business owned by Kolomoisky and Pinchuk is the one that wants to take Ukraine’s energy hostage together with the international investors. Here is what the investors themselves write about it, for example. The investors say that the oligarchs’ lobby is set out to kill the green energy.
And by lobbying for the preservation of manual steering of the market to the benefit of ferroalloy businesses (when the state constantly changes the playing field), Leshchenko takes hostages along with them. Meaning that he does himself what he’s accusing others of, in best keeping with Orwell’s traditions.
In simpler terms, the energy investors stand for a signalized junction with traffic lights and transparent rules, and the ferroalloy lobby wants those traffic lights off and demands a traffic control officer instead.
Statement No. 3: “It was in Akhmetov’s interest that the import of coal from Russia was barred.”
A manipulation. Ban of Russian coal imports is a matter of energy security of Ukraine. Lobbying for non-critical imports from Russia to Ukraine (and electricity and coal are exactly that) means lobbying for the interests of Russia and the Ukrainian ferroalloy businesses, whose investors need cheap electricity at all costs. But ultimately, this ban was the most beneficial for the state-owned coal companies.
Who is Leshchenko lying for?
Leshchenko’s rhetoric fully conforms to that of the ferroalloy lobby. I can easily demonstrate this with specific examples. This leads me to hypothesize that Leshchenko is lobbying for those very interests.
Being the biggest electricity consumers they do not want any change. While selling their products at market prices abroad, they try to keep fueling their private legacy production facilities with energy at knock-down regulated prices. This is what generates the super-profits for them, the ferroalloy businesses. And what generates the super losses for the state.
There is nothing wrong with lobbying itself if it is civilized. Only Leshchenko’s lobbying is to the detriment of Ukraine.
In the mentality of ferroalloy business owners, lobbying for various benefits through politicians, journalists, and even law enforcers looks far more effective for boosting business revenues than the investments into modernization, energy efficiency, and better management.
This showed multiple times already – for instance, in 2012, when through aggressive information campaigns a group of ferroalloy producers got unprecedented electricity benefits from the government in exchange for the commitment to upgrade their dated energy-intensive facilities. In the end, those promises turned out to be false – the ferroalloy companies did not follow up on their investment plans, and the special energy discount for them was offset through up charging other consumers.
Leshchenko wants to ‘divide and rule’
When making his false case, Leshchenko uses an old manipulative technique called ‘divide at impera’ – divide and rule. His jesuitical statement that the debt before green investors is nearing $1 billion is not followed by a call to help them. It is simply unprofitable for his masters. Instead, he claims that the troubles of renewable energy sector investors are the fault of… the other renewable energy sector investors. He fails to explain why exactly, but dogmatically urges to “tame (billionaire oligarch Rinat) Akhmetov,” whose “fault” is just that he, like many other entrepreneurs, invested into green power plants.
Right now, it is utterly important for all the players, including the West, to avoid taking cues from the professional manipulative political lobbyists. The only true path for Ukraine and its international friends is to support the institutional reforms and not the names.
It is the reforms that will allow the taming of inefficiency, which has become a defining attribute of the Ukrainian economy.
Natalya Yemchenko is System Capital Management’s director of public relations and communications. System Capital Management is a Ukrainian financial and industrial holding company owned by Rinat Akhmetov.
