I recently wrote about a possible reason why the National Security and Defence Council imposed sanctions on Petro Poroshenko. I wrote about the infamous warrants and the ICU investment company, which blocked the return of money to dozens of influential Ukrainian families.
What does this have to do with Poroshenko? The fact that for many years ICU has been considered “Poroshenko’s investment bank”, and some people still identify the company with the “Grey-haired”.
I was very surprised when I received several comments that ICU and Poroshenko had almost no connection, and that it was situational cooperation. And also that ICU is a respectable company with a good reputation.
Time flies. The events of the past week are being successfully erased from memory. What happened five to eight years ago disappears without a trace. Obviously, this is what happened this time. Next, I will remind you why the ICU and Poroshenko are considered to be one and the same.
FLAWED REPUTATION OF ICU OWNERS
The Supreme Court recently put an end to the reputational dispute.
At the end of 2022, Makar Paseniuk and Kostiantyn Stetsenko, owners and members of the supervisory board of Avangard Bank (also co-owners of ICU), paid themselves bonuses worth UAH 580 million. This was the profit they received from managing the seized UAH 9 billion (owned by the Ukrainian subsidiary of the Russian Sberbank). Logically, the 580 million should have gone to the state budget. But Paseniuk and Stetsenko decided to keep it for themselves “because they could”. And they found a very far-fetched reason for this.
Interestingly, this has happened before. Google reminded us of the episode of 2014, when ICU, through intermediaries, took BG Bank’s $4.7 million government bonds for a mere UAH 8.3 thousand. After that, the company received a full refund from the Ministry of Finance. The Prosecutor General’s Office opened a case, but it went no further.
But in 2022, the appropriation did not go unnoticed. On 22nd January 2024, the National Bank deemed Paseniuk and Stetsenko to be financiers with a flawed reputation. This status means a ban on engaging in banking activities. After that, the NBU deprived both of them of the right to manage Avangard Bank.
But that’s not all. The Cabinet of Ministers of Ukraine decided to recover UAH 2.1 billion from Avangard Bank, Paseniuk and Stetsenko.
Paseniuk and Stetsenko went to court and even won in two instances. However, the Supreme Court put an end to the dispute. ICU continues to file other lawsuits, but after the Supreme Court’s decision, their prospects look very dim.
At the moment, the intrigue is different. The ICU is suing the state, but it remains the leader in the secondary market for Ukrainian government bonds.
I fully expect that the company might lose its status. A lawsuit against the Cabinet of Ministers for UAH 2.1 billion and earnings on government bonds do not coexist well in time.
Regarding the NBU’s decision, another question is whether Avangard Bank will be taken away from ICU. This is quite possible if sanctions are imposed on the company. In my opinion, this scenario is possible if, for example, the version that ICU remains an investment bank of the sanctioned Poroshenko is confirmed. Or even worse, it is confirmed that the company cooperated with Russian business after the outbreak of a full-scale war.
WHY ICU = POROSHENKO
Why was ICU considered Poroshenko’s “investment bank”? There are numerous episodes of their cooperation in the public domain. I will try to bring them together:
a) the appointment of ICU managers to government positions by the president. The most high-profile is, of course, the appointment of Valeriia Gontareva as the head of the NBU. But that’s not all. Oleksandr Zhyvotovsky became the head of the National Commission for the State Regulation of Communications and Informatisation (NCCIR). Dmytro Vovk became the head of the National Energy and Utilities Regulatory Commission (NERC). Volodymyr Demchyshyn held positions in the NERC, Naftogaz, and became the Minister of Energy and Coal Industry of Ukraine. The concentration of appointments is too high, even for a company that is considered the most professional in the Ukrainian financial market. Such loyalty implies the personal trust of the president.
b) Even before Euromaidan, ICU was involved in rumours of cooperation with Viktor Yanukovych’s entourage. The profile was “helping to invest not entirely legal money in securities in Ukraine and abroad”. I don’t know if is true, but why not? As for Poroshenko, the company has been suspected of the same thing for years. An objective investigation could confirm or deny the rumours, but this did not happen either under Poroshenko or Zelensky.
c) Valeriia Gontareva formally resigned from the ICU co-founders. However, there are indirect signs that the relationship between them has been maintained. Under the new head of the NBU, ICU has become the largest operator of the secondary market for government bonds in Ukraine. There were many reports that state-owned banks were conducting strange transactions where they earned nothing, while ICU skimmed all the cream. Incidentally, these transactions had been going on since the days of Yanukovych. You can find a description of them with specific examples here.
d) Now let’s get our story closer to Poroshenko. At the same time, the story is about cooperation with Russian business.
The majority owner of the power company was Konstantin Grigorishin, who is currently under NSDC sanctions.
Grigorishin is far from a random partner for ICU. Back in Yanukovych’s time, ICU handled Poroshenko’s purchase of Sevmorzavod from Konstantin Grigorishin.
For a long time after the victory of Euromaidan, Grigorishin was perceived as Poroshenko’s partner. However, the terms of the partnership were quite unusual – in particular, the Russian was given the “honourable duty” of covering energy supplies to the occupied territories of Donbas at his own expense. Nevertheless, he retained his stake in Vinnytsiaoblenergo. Although there were active rumours that he was to transfer it to Poroshenko in order to pay off the debt.
An interesting nuance: Poroshenko lent money to Grigorishin through his offshore companies. What are these offshore companies? Back in Yanukovych’s time, I saw a tax certificate on offshore companies that are part of various financial and industrial groups in Ukraine. But after Euromaidan, this data disappeared from public access.
e) Incidentally, before joining the NBU, Valeriia Gontareva was seen to have friendly and business relations with Yuri Solovyov, the deputy chairman of the Russian VTB Bank. Among investment bankers, he was a very influential financier, the creator of VTB Investment Bank, which successfully operated in London before the war. More information is available here.
Question: Was ICU already serving Poroshenko at that time? Yes, because Paseniuk took Poroshenko out of the list of UMH’s shareholders before selling the holding to the “young oligarch” Serhiy Kurchenko.
At the same time, Paseniuk met the future “Poroshenko’s lawyer” Oleksiy Filatov, the future deputy head of the Presidential Administration of Petro Poroshenko.
Here’s an interesting episode that got into the media. Filatov’s sister returned money from a deposit at Alfa Bank at the same time that Gontareva was head of the NBU and banned all Ukrainian citizens from returning deposits.
There is no denying that ICU worked with Poroshenko before Euromaidan.
f) Many of us remember that Poroshenko actively spoke out against Russia and allocated state funding for the activities of the so-called “porokhobots” [from bot and Porokh – abbreviated form of Poroshenko’s name –Translator]. I’m not talking about Medvedchuk, who has become a bit of a staple. There is a more interesting story. At the same time, Petro Oleksiyovych himself had assets in Russia, and not just the famous Lipetsk factory. For years, the “Grey-haired” tried to sell his business in Russia. A consortium of Rothschild & Cie and Investment Capital of Ukraine (ICU) was involved in the process of preparing for the sale.
At the time, the Russian media reported that the sale had fallen through solely because the seller had offered too high a price. By the way, the sale of the Lipetsk factory was bundled with the sale of Sberbank’s subsidiary in Ukraine. Around that time, Ukraine imposed sanctions against Russian state-owned banks in Ukraine (which I fully support, but you will agree that there are nuances). As the saying goes, “I recognise old Krupsky Poroshenko”. [Translator – this is a slightly misquoted reference to an anecdote about Brezhnev and Lenin’s wife Krupskaya]
g) “Blind trust”. As you may recall, after becoming president, Poroshenko transferred his assets to a “blind trust” that was supposed to sell his assets. Formally, the trust was managed by the tandem of Rothschild and ICU. But was this tandem independent? I can assume that it was not. On the contrary, I can believe that ICU had access to Poroshenko’s offshore companies, which implies that the company could invest the “Grey-haired’s” funds in interesting assets (for example, Eurobonds of Ukrainian issuers).
Another interesting fact. Poroshenko’s legal advisor was Avellum, we will meet this law firm in other episodes.
If you are interested in the documentary details of the existence of the blind trust, please follow the link. I cannot vouch for its authenticity, but it is unlikely to be 100% fake.
h) Could ICU be an independent manager if at the same time it was actively conducting suspicious transactions? One of them was the purchase of Eurobonds of DTEK, the largest energy holding in Ukraine, at a large discount. Rinat Akhmetov’s company was in huge trouble. Before Euromaidan, Ukraine’s largest oligarch had accumulated debts, but after Euromaidan, the hryvnia devalued sharply and market conditions became unfavourable.
He faced the threat of bankruptcy. Foreign currency-denominated debt securities plummeted in value, and at this stage, ICU bought them. As soon as this happened, the aforementioned Dmytro Vovk approved the so-called Rotterdam+. DTEK’s revenue increased by 1.5 times, and the bonds rose sharply to 90% of their face value. Of course, ICU made a huge profit.
It was quite obvious that such an operation would not have been possible without Poroshenko’s intervention. Moreover, without him, ICU would never have got rid of the criminal case opened by the National Anti-Corruption Bureau of Ukraine. It took a long time to resolve the issue with NABU, but ICU got away with it. This may have been facilitated by Paseniuk’s contacts with Oleksiy Filatov, Deputy Head of the Presidential Administration for Courts.
Attention, here comes a question: whose money did the company use to buy up DTEK’s debts? Was it Poroshenko’s money? Was the profit intended for ICU itself, or was it distributed between them and Poroshenko? I tend to believe in the second option.
i) if you go online, you will find descriptions of other deals that ICU made during Poroshenko’s time. In particular, these were:
– negotiations on the purchase of Channel 112 in favour of Poroshenko (unsuccessful, in 2018 the channel was bought by Medvedchuk, today the channel is closed by the NSDC decision), for which Paseniuk even flew to Moscow to meet with the owners.
– When Poroshenko became president, Paseniuk continued to buy energy assets for him. ICU was creating a fund for Grigorishin’s benefit. At least, that’s what this source says.
– Here is a quote from the article by the reputable New Voice: “ICU was involved in another dubious deal. In early January, the Al Jazeera TV channel published an investigation in which it described how businessmen Onishchenko and Pavlo Fuchs bought the Cypriot offshore company Quickpace Limited for 30m dollars from Serhiy Kurchenko, a ‘young oligarch’ from the time of Viktor Yanukovych who fled to Moscow.
It holds foreign currency bonds of the Ukrainian government and money accounts worth 160m dollars. Earlier, the Kramatorsk district court arrested the assets of Quickpace Limited in a case to recover 1.5bn dollars of ‘Yanukovych’s money’. However, Onishchenko admitted to the TV channel that he had hoped to “resolve the issue” of the money’s arrest in court. Commenting on the situation, ICU said that they only acted as a broker, i.e. an intermediary with the necessary financial infrastructure.
– Here is the “solar energy”. Before Euromaidan, there was much talk that the “green tariff” in Ukraine was a corruption scheme of Yanukovych’s entourage. However, after Euromaidan, the new government did not cancel or reduce the “green tariff”, even though it was 10 times higher than the tariff for nuclear power plants. There are very good reasons to believe that people from Poroshenko’s entourage, including ICU, were involved in this lucrative business.
This is corruption in its purest form. However, neither NABU nor other agencies saw the elements of a crime.
– Here is the work in Russia up until the full-scale invasion. ICU owned a stake in the Russian Burger King.
– And here is the buying of votes in the parliament, without which schemes such as the “green tariff” would not have passed. Hiding abroad from prosecution, gas oligarch Oleksandr Onishchenko published correspondence with Poroshenko’s confidants, including Makar Paseniuk. Of course, this episode did not interest law enforcement agencies.
I am sure that these are far from all the episodes in which ICU and, likely, Poroshenko are involved.
Conclusion: Given the number of episodes, we can clearly say that ICU and Petro Poroshenko are one business group. I do not know whether they continue to cooperate now. Formally, no. However, I would like to remind you that ICU most likely dealt with the “Grey-haired’s” offshore companies. This money could have passed unnoticed, without any indication that it belonged to the ex-president. So it is possible that the cooperation is still ongoing.
That is why influential families in Ukraine, return of whose money is being blocked by ICU, believe that Poroshenko is behind their misfortunes. As I wrote, this is a good reason why the “Grey-haired” could have received NSDC sanctions.
This is an interesting question. Why was Poroshenko placed under sanctions, while ICU is still untouchable?
Perhaps someone in the current government is protecting ICU. For example, there is the news that the company has donated $1 million to the Kyiv School of Economics (Tymofiy Mylovanov). The cooperation started a long time ago – back in 2018 and 2019, ICU and KSE held two Ukrainian Financial Forums. You can build a further chain of connections from Mylovanov on your own.
POROSHENKO AND WARRANTS
I wrote that the “Grey-haired” is also suspected of holding money in the infamous Yaresko warrants, and ICU may be playing the role of his money manager.
There is no concrete evidence of this certainty, but there is some indirect evidence of a connection. In particular, ICU is serviced by the international law firm Cleary Gottlieb Steen & Hamilton LLP. This firm was the architect of the warrant issue. Avellum Partners, the Ukrainian firm that structured Poroshenko’s assets into a blind trust with the Rothschilds and ICU, acted as the Ukrainian law firm.
Cleary Gottlieb Steen is currently representing the warrant holders in negotiations with Ukraine. Nothing is formally known about the presence of ICU. But this does not mean that they are not there.
Let me remind you that the warrants were issued under Poroshenko. Despite the poor conditions and signs of corruption, they were approved by the authorities and no criminal cases were filed. The warrants successfully survived the new government, and only recently, on the initiative of Volodymyr Zelensky, did they default. I think this is the right thing to do.
To sum up.
There are at least 20 episodes in open sources linking Poroshenko to ICU. Their cooperation began under Yanukovych and reached its peak under Poroshenko.
Representatives of influential Ukrainian families suggest that Poroshenko is still behind ICU, and it is because of his personal position that they are suffering losses.
ICU is currently at risk. It may turn out that Poroshenko and ICU are still cooperating (and servicing the assets of the sanctioned “Grey-haired” is a violation of the law). It could also reveal ties with Russians that would compromise ICU. Both of these options threaten the company with huge problems, including sanctions and a ban on operations in Ukraine. International operations may also be affected.
According to my interlocutor, who told me the version of Poroshenko’s punishment for ICU’s behaviour, the story is not over yet.
