About the role of the ICU Group in the financial transactions of Yanukovych’s entourage and Poroshenko’s asset management. Should anti-corruption officials fight corruption? The question seems ridiculous. It’s like asking whether cars should drive on roads. In our view, this is the reason for their existence.
However, the work of anti-corruption officers is selective. They notice some phenomena and some people, while they stubbornly fail to see others.
This approach can be clearly seen in recent cases. For example, as a result of the so-called “Mindich-gate”, one of the groups of influence around President Volodymyr Zelensky was removed from power. However, there was a false impression that Mindich and Yermak were the only ones involved in corruption in the energy sector. Of course, this is not the case, but the anti-corruption authorities did not go any further.
Another example is the purchase of electricity from Energoatom at reduced prices on the eve of the attacks on Kyiv. Anti-corruption officials accused Rinat Akhmetov’s DTEK holding of conspiracy. But when the latter – being the only one to do so – cancelled the purchase agreement, they suddenly fell silent, even though DTEK bought only 20% of the volume, and the remaining 80% of electricity was sold at the same price to about 60 other companies. None of these companies have terminated the contract with Energoatom. However, anti-corruption officials found them “uninteresting”.
Thus, it appears that anti-corruption officials are not fighting corruption as a systemic phenomenon, but rather they fight individual characters. They do not address systemic corruption. It looks as if the police would fight petty pickpockets and hooligans, but do nothing about organised crime, which turns over billions thanks to deep connections in the government.
In the case of corruption, we see a massive introduction of declarations and investigations of isolated “high-profile” cases, but at the same time, billions of dollars of schemes existing in the current government are ignored.
Why do anti-corruption officials act so selectively? Perhaps they have completely different tasks? To illustrate the answer to this question, I will describe one case from the era of Petro Poroshenko’s presidency.
It was under Poroshenko that anti-corruption officials came out of hiding and became an active part of Ukrainian politics. It’s not just about NABU [National Anti-Corruption Bureau], SAPO [Specialised Anti-Corruption Prosecution] or the High Anti-Corruption Court. It also includes auxiliary groups that talk about “victories over corruption” all over the news and form the corresponding media field.
I would like to remind you that since 2014, anti-corruption activists funded by USAID and European Union grant programmes have been particularly active.
Some of them joined the government as staff members at various ministries, some became members of the Verkhovna Rada, some became media influencers and independent investigators. Together, they formed a politically active stratum of bloggers, columnists and investigative journalists. Here are just a few of the names of media projects that can be attributed to this group: Censor, Novoye Vremya, Nashi Groshi, Bihus.Info, Slidstvo.Info, Suspilne, Schemes.
And there is still one problem. Anti-corruption activists have been working in Ukraine for over twenty years, but corruption has not only not disappeared but has flourished and become a chronic disease. Why is that?
One explanation is that they did not pay attention to systemic corruption. Its existence was allegedly talked about, but in practice, it was not touched upon. This is the example I will give next.
Complaint to the European Union
I recently used the excellent Gotham service from Palantir. Palantir is an American software developer. Its software is used by the US national security agencies, the CIA and the Pentagon. It is also actively used by European Union banks to combat terrorism, money laundering and corruption.
Gotham helped to uncover an extremely non-public document in which the EU’s anti-corruption initiative in Ukraine, the Ukrainian investment company ICU, and the laundering of Viktor Yanukovych’s dirty money, were bizarrely intertwined. And most importantly, this document told us a lot about whether the anti-corruption vertical is fighting systemic corruption.
The document is a complaint by an activist who participated in the competition for the position of Senior Anti-Corruption Expert for the EU Anti-Corruption Initiative in Ukraine (EUACI) for 2017-2019. The competition itself was held in 2016, during the presidency of Petro Poroshenko (who is now under Ukrainian sanctions). The programme budget was EUR 15 million.
The author of the complaint failed to win, but he did document well how the anti-corruption machine works. He set out his facts in a complaint he sent to the EU Ombudsman. The latter, in turn, forwarded the complaint to the European Anti-Fraud Office (OLAF).
In particular, the activist accused the Danish government of falsifying the EU Anti-Corruption Initiative in Ukraine (EUACI) competition. In his opinion, the recruitment process was merely a sham, and people “convenient” to Ukrainian oligarchs were deliberately appointed to key positions. This fact in itself looks interesting.
But that’s not even what interested me. According to the author, anti-corruption activists have deliberately ignored the facts of corruption, including the operations of Ukrainian oligarchs and the laundering of dirty money. This is the same methodology used by organised crime and oligarchs: they lobby for the appointment of “their” people to high positions to block investigations against the mafia and direct the attention of law enforcement in the wrong direction.
The technical details were as follows:
▪ The competition was held in 2016.
▪ The European Union has provided a €15 million grant for the EU Anti-Corruption Initiative in Ukraine (EUACI).
▪ At the same time, the EU entrusted all procedural issues to the Ministry of Foreign Affairs of Denmark (for reasons I do not know).
▪ To select the Senior Anti-Corruption Expert and staff, Denmark hired a private company, Mercurio Urval, which usually receives orders from grant-making organisations and has been involved in a number of scandals in the past.
▪ There was no actual tender, although EU rules explicitly provide for competitive procedures.
▪ The activist’s application was rejected by Mercuri Urval without explanation.
▪ Instead, a former member of the Lithuanian delegation to GRECO (Group of States Against Corruption) was appointed as EUACI’s Senior Anti-Corruption Expert.
The activist considered it illegal. He claimed that he was removed in violation of EU rules and the ethics of the anti-corruption procedure.
The author made three key accusations.
Firstly, the selection of staff was carried out at EU expense and in the interests of the EU, but EU procedures were not applied. In particular, Article 30 of the EU Staff Regulations, which is mandatory for hiring employees directly to EU institutions, was not applied. The formal explanation was that the grant was administered by the Danish Ministry of Foreign Affairs, and therefore it acted in accordance with Danish law and regulations.
Translating from bureaucratic language: “The EU Anti-Corruption Initiative in Ukraine was funded by the European Union with the aim of bringing Ukraine closer to EU membership, but EU rules were not actually applied.”
Secondly, Mercuri Urval, on behalf of the Danish government, chose as the winner a person who had previously ignored the facts of large-scale money laundering in the Baltic States. This person held senior positions in the structures responsible for anti-corruption monitoring in Estonia, Latvia and Lithuania at the time when huge amounts of funds of dubious origin were flowing through the Baltic banks.
In particular, approximately $1.5 billion stolen by Viktor Yanukovych and his “Family” was withdrawn through Danske Bank’s branches in Estonia, Latvia and Lithuania, as well as through PrivatBank, Baltic International Bank and Versobank. This is where the well-known Investment Capital Ukraine (ICU) group comes into play.
The author of the complaint argued that the expert was directly responsible for the fact that large-scale money laundering operations through Danske Bank and financial intermediaries went unnoticed or were not stopped by the controlling authorities of the Baltic countries in which he worked as a representative of anti-corruption institutions.
The third charge is as follows: It seems that the Ukrainian authorities played an extremely active role in the work of the EU Anti-Corruption Initiative in Ukraine (EUACI). In particular, EUACI’s Kyiv headquarters was formed by people whom the complainant described as “anti-corruption experts who are primarily beneficial to Vice Prime Minister Ivanna Klympush-Tsintsadze, known as a protégé of Ukrainian oligarchs” (direct quote from the complaint).
The activist concluded that the appointment of this particular person as EUACI’s Senior Anti-Corruption Expert was not accidental. According to him, the goal was to staff the anti-corruption initiative with personnel who had already proven their ability to “overlook” financial fraud in the interests of certain political and business groups.
How ICU serviced Yanukovych’s schemes
At first glance, it may seem: so what? It was just that the candidate who lost the competition decided to settle the score and therefore accused the Danish ministry of violations.
This is probably how the European Anti-Fraud Office (OLAF) assessed the situation before refusing to consider the complaint. This is understandable. After all, the Eurobureaucracy is not a fiction. It is unlikely that anyone would revise the EU grant programme, especially when the programme has already ended and the funds have been spent.
How can we even imagine this? Is the EU’s anti-corruption programme being called into question because of suspicions of dishonesty among its own members? This would mean, at the very least, suspending a huge number of grant programmes. As a result, OLAF refused, arguing that EU rules allegedly did not apply to the EU grant.
But I was interested in something else entirely. I proceed from the fact that the complaint directly implicates the Investment Capital Ukraine (ICU) group. And the ICU did service Viktor Yanukovych’s entourage during his presidency – and this is an established fact, both de jure and de facto. De jure – by the decision of the Kramatorsk City Court of Ukraine of 28th March 2017. De facto – through the special confiscation of almost $1.5 billion belonging to Viktor Yanukovych’s entourage. It was the funds that ICU serviced that were confiscated. Ukraine credited them to the state budget, thus officially recognising that “Yanukovych’s money” constituted stolen funds, and this is not a journalistic fiction, but a legally established fact.
May I remind you of the details of the decision of the Kramatorsk City Court in case No. 234/4135/17, which involves more than 400 (!) companies from Ukraine and offshore jurisdictions. Among them are the structures of Serhiy Kurchenko and his VETEK corporation. This organisation took control of state resources of Ukraine totalling over UAH 13.2 billion through schemes in the fuel and energy and banking sectors. It was these funds that were subsequently laundered and ended up in the hands of financial intermediaries, including the ICU Group’s specialists.
A key part of the Kramatorsk court’s decision describes the mechanism of money laundering by transferring funds to the Baltic States and then buying Ukrainian government bonds. The scheme looked as follows: The funds of Yanukovych’s criminal organisation were initially withdrawn from UkrBusinessBank and other Ukrainian banks to the accounts of non-resident companies – in particular, Sabulong Trading Ltd, Quickpace Ltd, Katiema Enterprises Ltd and others – in Baltic banks. These banks include branches of Danske Bank, Versobank (Estonia), PrivatBank (Latvia), and Baltic International Bank (Latvia).
According to the court, almost $1.5 billion was withdrawn through these banks. It is possible that the actual amount was much higher, and this is only the part that could be traced in the documents.
At the next stage, the ICU group entered into contracts with offshore companies and invested the proceeds of crime in Ukrainian government bonds. There were also rumours that some of the funds were invested in Ukrainian currency Eurobonds, but the Kramatorsk court’s decision does not explicitly mention this. In other words, the money was not only stolen butalso returned to Ukraine under the guise of “foreign investment” in government debt instruments. The aim of the whole scheme was to legalise “dirty” money and generate additional income at the expense of the Ukrainian budget. Conventionally, this scheme can be called “Steal +”.
This is exactly what systemic corruption is. This is corruption that involves the highest levels of government and institutional structures – including state-owned banks, energy companies and state regulators.
There is no doubt that the Investment Capital Ukraine group knew that it was servicing the funds of Yanukovych’s criminal group. Undoubtedly, anti-corruption experts in the Baltic States and Ukraine should prosecute similar schemes. But this did not happen.
The verdict of the Kramatorsk court repeatedly uses the same structure: (an offshore company), accounts at Oschadbank, purchase of government bonds, contracts in which the broker is Investment Capital Ukraine LLC (ICU), a “front person”. The court explicitly notes the facts of securities purchase and sale agreements between the broker Investment Capital Ukraine LLC and JSC Oschadbank in the interests of specific companies and “front persons”.
Here is a list of companies with which ICU entered into servicing agreements and for whose benefit funds were passed through government bonds:
▪ Katiema Enterprises Limited
▪ Foxtron Networks Limited
▪ Wonderbliss Limited
▪ Akemi Management Limited
▪ Opalcore Limited
▪ Kviten Solution Limited
▪ Sabulong Trading Limited
I assume that this is far from a complete list of Yanukovych’s structures that ICU serviced. It is also possible that the cooperation continued even after the imposition of international sanctions against Yanukovych and his entourage.
However, I have never heard of law enforcement agencies systematically checking the ICU financial group – except in one case, when it was done by Petro Poroshenko’s close ally, Prosecutor General Yuriy Lutsenko. He publicly stated that the investigation “did not reveal anything illegal”. However, there is little confidence in these words – and it will become clear why.
I will only say that in the first years after the victory of Euromaidan (2014), there were rumours in Kyiv that law enforcement agencies were “releasing” Yanukovych’s entourage along with money in exchange for bribes. The bribes were described as “the trunk of a Porsche Cayenne stuffed with bags full of 500 euro notes”.
It is quite possible that this is an exaggeration, similar to the popular meme about the “Kamaz truck with banknotes”. However, it is possible that there were very specific facts behind these stories. After all, it happened in a strange way that Ukrainian prosecutors either ‘forgot’ to file a petition with the prosecutors of European countries, or the arrests expired, and the funds simply disappeared.
In their comments, European law enforcement officers only shrugged their shoulders and referred journalists to their Ukrainian colleagues.
What is known for certain from the decision of the Kramatorsk court
The following is known for certain: the ICU Group entered into agreements with offshore companies at the peak of Euromaidan, and the amounts of ‘laundered’ funds ranged from USD 9.6 million to USD 391 million.
All of these companies, which became ICU’s clients, were found by the court to be part of Viktor Yanukovych’s criminal organisation. The funds used by ICU to buy the bonds were found to be of criminal origin and in fact part of the stolen state budget of Ukraine, according to “Economichna Pravda” material. After a special confiscation, the money was returned to the budget.
Thus, the activist’s complaint to the European Union had real grounds. At the very least, the European Anti-Fraud Office (OLAF) should have checked whether the head of the EU Anti-Corruption Initiative in Ukraine (EUACI) was aware of the massive money laundering operations. It is possible that much more than $1.5 billion passed through Baltic banks. However, instead, OLAF chose a formal pretext to avoid conducting an investigation at all.
What else is surprising? The complaint explicitly mentions ICU and states that the group’s activities contributed to the withdrawal of $1.5 billion from Ukraine. But anti-corruption experts in Ukraine and Europe ignored this fact, even though everyone is well aware of large-scale mafia money laundering scandals. It is enough to recall the cases of Bank of New York, Banco Ambrosiano, Wachovia, HSBC and Credit Suisse.
In the case of Danske Bank, a large-scale investigation was conducted in 2018, which established: massive money laundering operations of dubious origin were conducted through the Estonian branch of the bank. The text of the investigation can be found at this link.
I would like to remind you that the aforementioned complaint to the EU was filed in November 2019, when Danske Bank’s reputation was already questionable. By that time, Viktor Yanukovych and his inner circle were already under sanctions from the EU, the UK and the US.
The decision of the Kramatorsk court dealt mainly with Serhiy Kurchenko’s money, but since 2014, the EU sanctions have also been imposed on Mykola Azarov, Vitaliy Zakharchenko, Oleksandr Yanukovych, Andriy Kliuyev, Artem Pshonka, Dmytro Tabachnyk and other well-known people. It is quite logical to assume that other members of this circle could have ‘laundered’ money through Baltic banks.
It is also very important to understand: while Tabachnyk and Kliuyev were, figuratively speaking, in the second orbit around Yanukovych, the father and son Pshonkas, Zakharchenko, the Yanukovych’s elder son and several others were part of the inner circle – the so-called “Family”. And the Family was distinguished by a strict hierarchy and, quite possibly, used the same tools. So it is possible that the ICU group and other intermediaries could have been working in their interests, which is quite logical. However, this did not arouse suspicion among EU officials, nor among Ukrainian law enforcement agencies.
ICU themselves, commenting on the situation, said: in Yanukovych’s schemes, they merely acted as a broker, i.e. an intermediary with the necessary financial infrastructure.” Everyone was happy with this version.
ICU services Poroshenko. 13 episodes
One might wonder how it is possible that after Euromaidan, the group that serviced Yanukovych’s criminal funds was not brought to justice It turns out that it is possible. Let me explain why.
It is widely known that the ICU has started to serve Petro Poroshenko and his entourage. ICU was actually considered “Poroshenko’s investment bank”. Many episodes of their collaboration can be found in open sources. I will try to bring them together into a single picture. This is a list which is far from complete and consists of 13 episodes.
Episode 1. The “cadre pipeline”
Poroshenko appointed ICU managers to government positions under the presidential quota. The most high-profile appointment was that of Valeriia Gontareva as governor of the National Bank of Ukraine. Oleksandr Zhyvotovskyi became the head of the National Commission for the State Regulation of Communications and Informatisation. Dmytro Vovk became the head of the NEURC [National Energy and Utilities Regulatory Commission]. Volodymyr Demchyshyn worked at the National Energy and Utilities Regulatory Commission, National Joint-Stock Company “Naftogaz of Ukraine” and later became Minister for Energy and Coal Industry.
For a single financial company, this is a very high concentration of appointments. Even if we consider ICU to be the most professional in the Ukrainian financial market, such concentration is only possible with personal trust of the president.
Episode 2. Servicing Poroshenko’s money
There were suspicions that ICU was dealing with Petro Poroshenko’s money in the same way as the group had previously cooperated with Viktor Yanukovych’s entourage. ICU “helped Yanukovych to invest not entirely legal funds in securities in Ukraine and abroad”. As for Poroshenko, the company has been suspected of similar activities for many years.
An objective investigation could confirm or refute these suspicions, but there was no such investigation under either Poroshenko or Zelensky. Therefore, we have to confine ourselves to rumours that Poroshenko is still one of the largest holders of Ukraine’s Eurobonds and the infamous Yaresko warrants. And it is quite possible that it is ICU that services his accounts.
Episode 3. Powerful connections in the government
Formally, Valeriia Gontareva withdrew from the co-founders of ICU. However, there are indirect signs that the relationship with her continued to work to the group’s advantage. Under her leadership, ICU became the largest secondary market operator for Ukrainian government bonds. There was a lot of writing about the strange operations of state-owned banks, in which they earned nothing, while ICU received all the profits. It is worth noting that such operations, as “Ekonomichna Pravda” writes, began in the days of Yanukovych.
The Prosecutor General’s Office of Ukraine opened criminal proceedings against ICU over these episodes, but the case did not move forward. Prosecutor General Yuriy Lutsenko said the company was “not guilty of anything”. In Ukraine, such security is usually guaranteed only by connections with the current government.
In addition, under Poroshenko, the government worked very closely with organisations that signed grant programmes worth billions of dollars for Ukraine. The policy of USAID and similar organisations was to cooperate with the current government, just as it had been under Yanukovych. Few people know that the main recipients of grants in Ukraine have always been government agencies, not anti-corruption activists. The anti-corruption sector was just an additional area. Therefore, it is not surprising that the ‘people’s’ government after Euromaidan had an influence on the appointment of people and key decisions.
In addition, it is important to mention Valeriia Gontareva’s personal connections with grant-making circles, in particular with Nataliia Yaresko, who became Minister of Finance under Poroshenko and before that worked with private equity funds closely connected to the grant-making community.
That is why the “invisibility” of ICU for grant-making organisations has many explanations: no one was interested in noticing the group’s activities, although it openly signalled systemic corruption in the government.
Episode 4. Relations with sanctioned persons
There is a golden rule of sanctions: if you have business ties with persons subject to sanctions, you risk being subject to sanctions yourself. However, this rule has repeatedly failed in the case of the Investment Capital Ukraine group.
In November 2014, ICU, according to Forbes Ukraine article, acquired a minority stake in Vinnytsiaoblenergo and has owned it to this day.
The majority owner of this regional power company was Konstantin Grigorishin, who is now under sanctions of the National Security and Defence Council of Ukraine:.
Grigorishin was not a random figure for ICU. Back in the days of Yanukovych, ICU serviced the purchase agreement for Petro Poroshenko purchasing Sevmorzavod from Grigorishin.
After Euromaidan, Grigorishin was long perceived as a partner of Poroshenko (who is also currently under NSDC sanctions). The terms of their cooperation were quite specific: in particular, the Russian citizen (Grigorishin) was given the “honourable duty” to finance the supply of electricity to the occupied territories of Donbas at his own expense.
Despite this, Grigorishin retained his stake in Vinnytsiaoblenergo. There were rumours that this package was to be transferred to Poroshenko as a debt repayment.
An interesting nuance: Poroshenko provided loans to Grigorishin through his own offshore companies. It is not known for certain which offshore companies they were. Back in Yanukovych’s time, there were Tax Service certificates on offshore companies linked to financial and industrial groups in Ukraine, but after Euromaidan, this data disappeared from public access.
Episode 5. Connections with VTB
Prior to her appointment as head of the NBU, Valeriia Gontareva was noticed in friendly and business relationships with the deputy head of Russia’s VTB Bank, Yuri Solovyov. In the investment banking community, he was an extremely influential financier who created VTB Capital, an investment bank that successfully operated in London before the war.
A logical question arises: was ICU already servicing Poroshenko at that time? Probably so, because it was Makar Paseniuk who removed Poroshenko from the UMH shareholding before sale of the holding to Serhiy Kurchenko. During the same period, Paseniuk met with the future “Poroshenko’s lawyer” Oleksiy Filatov.
An illustrative episode: a sister of the very same Filatov was able to return the deposit from Alfa-Bank at the very time when Gontareva was head of the NBU, while thousands of other depositors were unable to get their money.
Episode 6. Lipetsk factory
Many people remember that Poroshenko publicly took a tough anti-Russian stance and financed the activities of the so-called “Porokhobots”. However, at the same time, Petro Poroshenko himself owned assets in Russia, and it was not just the famous Lipetsk confectionery factory.
For many years, Poroshenko has been trying to sell his business in Russia. The sale was prepared by a consortium of Rothschild & Cie together with ICU.
The Russian media reported that the deal fell through because the seller asked for too high a price. It is interesting that the sale of the Lipetsk factory was also considered as a “package” with the sale of the Ukrainian subsidiary of Sberbank.
Around the same time, Ukraine introduced sanctions against Russian state-owned banks in Ukraine. “I recognise the old Poroshenko”.
Episode 7. “Blind trust”
As you know, after becoming president, Petro Poroshenko transferred his assets into a so-called “blind trust”, which was supposed to sell his business. Formally, the trust was transferred into management to the tandem of Rothschild & Cie and ICU. But was this tandem truly independent? I think not.
Furthermore, ICU had access to Poroshenko’s offshore companies, which directly hints at the possibility that the company could have been a nominee asset holder for him.
Poroshenko’s legal advisor in this construction was Avellum, which also appears in other episodes. If you are interested in the documentary details of the existence of a blind trust, follow this link. I can’t vouch for its authenticity, but it’s unlikely to be 100% fake.
There are publications with a detailed description of the ‘blind trust’ structure and the ROSHEN corporate network, including Russian assets. Although he does not vouch for the absolute authenticity of these materials, he considers it unlikely that they are completely fictitious.
Episode 8. Eurobond schemes (DTEK and Rotterdam+)
Could ICU be an independent asset manager if at the same time it was conducting highly suspicious financial transactions? One such transaction was a mass buying-up of DTEK’s Eurobonds at a large discount. At that time, Rinat Akhmetov’s energy holding was in a difficult financial situation.
Before Euromaidan, the company had accumulated significant debts, and after the revolution, the hryvnia devalued sharply, and the market environment became unfavourable. There was a real threat of bankruptcy. At this stage, the debt securities fell sharply in value, and it was then that ICU bought them.
After that, Dmytro Vovk, a former ICU employee, approved the Rotterdam+ formula as head of the National Energy and Utilities Regulatory Commission. As a result, DTEK’s revenue grew by about 1.5 times, and the company’s Eurobonds rose sharply to 90% of their face value. As a result, ICU made a super-profit.
But was it only the ICU? Such an operation would not have been possible without the direct intervention of President Poroshenko. Without his political cover, ICU would never have been able to avoid the consequences of the criminal proceedings opened by the National Anti-Corruption Bureau of Ukraine. The issue with NABU took a long time to resolve, but in the end, ICU got out of the situation without any losses. This could have been facilitated by the contacts of Makar Paseniuk and Deputy Head of the Presidential Administration for Judicial Affairs Oleksiy Filatov.
So the key question is: whose money did ICU use to buy up DTEK’s debts? Was it Poroshenko’s own money?
Episode 9. Alfa-Bank’s instruments (LPN)
Even before the full-scale invasion, Alfa-Bank’s VIP depositors were offered a special investment product – Loan Participation Notes (LPN) issued by the Dutch company EMIS Finance B.V. These were debt securities with higher yields in foreign currency. To protect the funds from the risks of Ukrainian legislation, the LPNs were issued by EMIS Finance B.V., a Dutch company, and were formally separated from the bank. The bank returned the funds raised to Ukraine, used them for lending, and shared the profits with VIP clients. This is how Alfa-Club, the most powerful VIP banking system in Ukraine, was formed.
The bonds were issued twice – in November 2018 and September 2020. ICU is officially known as the owner of a significant stake in LPNs. Some of the securities were acquired during the initial public offering, while others were purchased after Alfa-Bank Ukraine was renamed Sense Bank and subsequently nationalised by the government.
The main intrigue is whether ICU bought these securities with its own funds or with clients’ money. In 2018, the group had been working with Poroshenko for a long time, but it could have had other clients, including those from Poroshenko’s or Yanukovych’s circle.
The bank’s nationalisation was followed by a scandal: depositors’ funds were “frozen”. The former owners agreed to return the money but proposed a restructuring scheme for LPN. Most of the issues were restructured, and influential Ukrainian families and companies took advantage of the scheme. However, two tranches remained, the majority of which were bought by ICU (in particular, by buying up bonds of other holders at a low price). I assumethat ICU demanded repayment of the entire amount immediately. EMIS Finance B.V. refused, and the situation got stuck. The minority owners of LPN became hostages.
I do not rule out that ICU’s goal was to force minority shareholders to sell their securities at a large discount. This is in line with the group’s philosophy: buy cheap in a crisis and sell expensive after stabilisation.
Episode 10. TV channels for Poroshenko
A deeper dive into open sources reveals other deals that ICU implemented under Poroshenko. In particular, we are talking about negotiations on the purchase of the “112” TV channel in the interests of Poroshenko. The deal did not go through – in 2018, the channel was acquired by Viktor Medvedchuk (the channel is now closed by the decision of the National Security and Defence Council). However, Makar Paseniuk even flew to Moscow to meet with the owners of the channel for these negotiations.
Episode 11. The case of Onyshchenko, Fuks and Quickpace Limited
Here is a quote from an article by the authoritative NV publication: “ICU has been involved in another dubious deal. In early January, Al Jazeera published an investigation describing how businessmen Oleksandr Onyshchenko and Pavlo Fuks bought Quickpace Limited from Serhiy Kurchenko (who fled to Moscow) for $30 million.
This company was interesting because it had assets (cash plus bonds) of approximately $160 million. In addition, this company was also interesting because it was serviced by ICU at a certain period – and this is recorded in the decision of the same Kramatorsk court.
Onyshchenko admitted that he had hoped to “resolve the issue” of the seizure of the funds in court but apparently failed.
Episode 12. “Green” energy
Before Euromaidan, there was a lot of 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”, despite the fact that it was about 10 times higher than the tariff for nuclear generation. There is good reason to believe that people from Poroshenko’s entourage, including the ICU structure, are involved in this highly profitable business.
This is corruption in its purest form. However, neither the NABU nor other law enforcement agencies saw any elements of a criminal offence.
Episode 13. Work in Russia to date
ICU Group owns a stake in the Russian Burger King. The shares were purchased from VTB, a Russian state-owned bank. No politics, just business.
According to available information, ICU has not yet exited this asset and continues to earn and pay taxes in the Russian Federation. What is this if not grounds for sanctions or at least high-profile anti-corruption investigations? – There are none.
Episode 14. Buying votes in parliament
Without this element, schemes such as the “green tariff” could not be implemented. Gas oligarch Oleksandr Onyshchenko, hiding abroad from prosecution, published correspondence with Poroshenko’s proxies, including Makar Paseniuk. This episode also did not interest law enforcement agencies.
I am sure that these are not all the episodes in which the ICU and, probably, Poroshenko, are involved. What unites them is the complete lack of investigations by law enforcement and anti-corruption agencies.
Instead of a conclusion
Given the number of episodes cited, we can confidently state that ICU and Petro Poroshenko are in fact one business group. What they were doing was systemic corruption.
It is not known for certain whether they continue to cooperate now. Formally, there is no news about it. However, it is worth remembering that ICU dealt with Poroshenko’s offshore structures, which are not accountable in Ukraine. It is possible that certain operations are still ongoing.
I assume that it is ICU that may be behind Ukraine’s recent negotiations with Yaresko’s warrant holders, and Poroshenko holds a package of these instruments.
All of these are direct grounds for criminal cases, NSDC sanctions, or at least full-fledged anti-corruption investigations. However, none of this happened. One thing is the law enforcement agencies of Ukraine, which are traditionally considered corrupt. Anti-corruption officials are another matter, perceived as impartial and all-seeing fighters against corruption.
How can it be that the activities of the ICU – a real “mammoth in a china shop” – have been out of their sight for years?
Let me remind you: the complaint to the EU was filed in November 2019, under the presidency of Volodymyr Zelensky. Perhaps the applicant was waiting for people associated with Poroshenko to leave power. However, his expectations were not met.
Strangely, the story continues. Even under Zelensky, law enforcement and anti-corruption agencies are not noticing the ICU in the same way. Although the Poroshenko-era cases could have been vivid examples of systemic corruption, and the ICU co-owners could have been key witnesses in the courts. Poroshenko was taken to court, but his “right-hand man” seemed to have disappeared from the radar.
For example, ICU was involved in a scandal involving funds from Sberbank Ukraine. However, this was due to personal conflicts with the NBU leadership rather than political will from above. Paseniuk and Stetsenko blocked the management of Avangard Bank and dragged them into a legal battle with the Cabinet of Ministers. Later, this case also went quiet. I suspect that this proceeding exists as a “hook” for control, rather than as a real tool for bringing someone to liability.
It turns out that the author of the complaint to the EU was probably not so wrong. It is quite possible that the real purpose of the EU Anti-Corruption Initiative in Ukraine was not to fight corruption at all. Perhaps, it is a way of drawing down funds, but definitely not a real confrontation with systemic corruption in the government.
Even structures such as ICU, with their dubious track record, can operate for years right under the noses of law enforcement and anti-corruption agencies. The version of their merger with the authorities is no longer so absurd.
Anti-corruption bloggers will never tell you this. But it’s good that Palantir exists. At least from this source, we can get an impression of the real course of events after the Euromaidan victory. This course is radically different from the official history, which is full of powerful victories.
I’m sorry, I’m reminded of a dialogue from The Lord of the Rings:
Gandalf: “A Palantir is a dangerous tool, Saruman.”
Saruman: “Why? Why should we fear to use it?”
NB/ All texts are published from original sources in full. EU Today’s editorial staff may not share the opinions of the authors and is not responsible for their statements.
Main Image: Managing Partner of ICU Makar Paseniuk (photo: facebook.com/ICUua)
