Posted on 12/06/2004 9:12:33 AM PST by Tailgunner Joe
The decision to order a re-run of Ukraine's presidential election threatens the clique of shadowy business tycoons who sought to influence the result of the poll.
The call by the supreme court on Friday for a fresh contest has dealt a heavy blow to the businessmen who tried to block the victory of the pro-democracy candidate Viktor Yushchenko.
It also spells near certain defeat for the Kremlin consultants who attempted to ease Viktor Yanukovich, the prime minister, into power. A handful of Ukrainian oligarchs tried to manipulate the vote as Moscow stepped up its campaign to dictate the fate of its former Soviet neighbour.
One was the head of the presidential administration, Viktor Medvedchuk, who has been a point man for the Kremlin's efforts to exert control over Ukraine, through which it moves huge quantities of oil and gas.
The man, however, who stands to lose most is Rinat Akhmetov, the billionaire leader of the "Donetsk clan" and a Yanukovich associate.
Mr Yushchenko yesterday promised to review Mr Akhmetov's joint purchase of the Kryvorizhstal steel mill, bought in a privatisation deal for $800 million (£411 million) after bids of $1.5 billion were excluded mysteriously. Another potential target is Grigory Surkis, an ally of Mr Medvedchuk and the controlling shareholder of the Dynamo Kiev football team.
Those who have fallen prey to the oligarchs' machinations were jubilant at the decision for a re-run before December 26. "It was an excellent result," said Michael Maltzoff of the Energy Standard Group, a company that crossed swords with Mr Medvedchuk's clan. "Mr Yushchenko has a good chance of winning now and then we'll finally be able to do business instead of dealing with the complete criminality that exists."
Beneath the cliche of an East-West split dividing the presidential candidates lies a vipers' nest of competing criminal, political and business interests. Last week, the Russian leader Vladimir Putin backed the outgoing Ukrainian president Leonid Kuchma's call for a fresh election. That was seen as an attempt to find an alternative candidate to Mr Yanukovich who would also please the oligarchs closest to Mr Kuchma, such as his son-in-law Viktor Pinchuk.
Each of the oligarchs is linked to a political party that promotes his interests. They united behind Mr Yanukovich because they feared Mr Yushchenko might expropriate the assets they snapped up in the last decade.
Moscow, like the oligarchs, has a lot to lose in Ukraine. Mr Putin wants to protect its energy interests by keeping a friendly regime in Kiev, which will not raise tariffs on Russian oil and gas crossing Ukraine.
Moscow advisers who sought to shoehorn Mr Yanukovich into the presidency, concede that it will be an uphill battle. Sergei Markov, a strategist linked to Mr Putin, admitted that the Ukrainian prime minister's youthful criminal record made him tough to promote.
They are determined to try, however - a fact which has dismayed Mr Putin's political opponents in Moscow who fear that it will only backfire against Russia.
"What we are seeing now is a democratic revolution that is a direct result of the corrupt and cynical decision by Moscow to support Yanukovich," said Irina Khakamada, a democratic reformer who challenged Mr Putin for the Russian presidency this year. "That was a rude interference in the business of our brothers, the Ukrainians."
Backing the bad guy - On Lenin square in Donetsk there have been daily pro-Yanukovich demonstrations under the steely gaze of a huge statue of ...Lenin. Thousands are turning out here every evening, their motives ranging from the sensible to the outlandish. Anatoly Polyakov, a pensioner and victim of Chernobyl, said, ‘If Yushchenko wins, the Nazis will return. I was in the west of Ukraine recently and saw columns of foreign troops, fascists. If war comes, I will fight until the last cartridge.’
Arkansidesky....
Dec 07, 13:21
By ROMAN OLEARCHYK
Post Staff Writer
A banker with close links to Presidential Administration Chief Viktor Medvedchuk and his inner circle of associates has been found dead under suspicious circumstances.
Yury Lyakh, 39, chairman of Ukrainian Credit Bank, was found dead on Dec. 3 in his office at the bank.
Citing informed sources, crime e-zine www.cripo.com.ua wrote that Lyakh was found dead with lesions on his neck made with a paper knife. A letter in which Lyakh wrote his last words was also allegedly at the scene.
The cause of death remained unclear four days after Lyakh’s body was found. Associates, co-workers, law enforcement officials and prosecutors remained tightlipped.
Ukrainian media reports have alleged that Lyakh was a member of the so-called Big Seven, an inner circle of business associates and friends closest to Medvedchuk. Other members of the group allegedly include Hryhory Surkis, his younger brother Ihor, Yury Karpenko, Valery Zgursky and Bohdan Hubsky.
In media reports, both Medvedchuk and Surkis have referred to these individuals as their closest confidants.
Zgursky, the bank’s supervisory chairman, was not available for comment. His secretary said he would not comment on the death of Lyakh.
“We do not know what happened. We will not comment on it,” she added.
Other officials at the bank also declined comment.
Hubsky, Hryhory Surkis and Igor Surkis were also unavailable for comment.
The Interior Ministry in Kyiv did not cover the event on their Web site, which usually reports on high-profile crimes.
Dmytro Andriyev, a spokesperson at the Kyiv division of the Ministry of Internal Affairs, would not confirm Lyakh’s death, but directed inquiries to the Kyiv City Prosecutor General’s Office.
Another spokesperson at the ministry confirmed that Lyakh had indeed died, and that an investigation by prosecutors had been launched. The spokesperson declined to discuss the case further.
Svitlana Melnyk, a spokesperson at the Prosecutor General’s Office, was “not prepared” to comment.
According to the Official Ukraine Today directory of Ukrainian officials, Medvedchuk is a cofounder of Ukrainian Credit Bank. He also founded other firms including law firm B.I.M. International, Slavutych Concern and joint stock company Dynamo Kyiv, a holding through which he and others control the capital’s football club.
Hryhory Surkis and Ihor Surkis have held top posts at Dynamo Kyiv football club. Hryhory currently serves as the head of Ukraine’s football federation, while Ihor holds the top post at the Dynamo Kyiv soccer club.
Hubsky has also held top posts at the club, in addition to at Ukrainian Credit Bank and Slavutych Concern.
Medvedchuk and Surkis are leaders of the influential Social Democratic Party of Ukraine (united). Media reports have in recent weeks alleged that Medvedchuk and Surkis have been blacklisted by the United States - denied visa access in connection with suspected corruption and involvement in the falsification of the Ukrainian presidential elections.
WoW!
"What we are seeing now is a democratic revolution that is a direct result of the corrupt and cynical decision by Moscow to support Yanukovich," said Irina Khakamada, a democratic reformer who challenged Mr Putin for the Russian presidency this year. "That was a rude interference in the business of our brothers, the Ukrainians."
>>>
WoW again!
Well, this just keeps getting more interesting by the moment.
Thank you for the ping.
This scares the devil out of me.
What does it all mean?
Yes, I read it, but I am not smart enough to understand what it means to us next year or later.
Or is this same thing going to be happening here any day?
There is a message to us in all this, something along the line of "Wake Up America".
Ping
Is this coming to America soon, or has it arrived?
Guess this is why Putin needed to move on down to make waves in Babylon, he lost big time in the Ukraine.
Putin's making all the wrong moves. It's sad to see.
Pass the vodka and we'll talk...
Thanks
As the December 26 rerun of last month's Ukraine presidential election approaches, many of the political and business groups that once backed prime minister Viktor Yanukovich have cosied up to his rival, opposition leader Viktor Yushchenko.
But Viktor Medvedchuk, 50, the hardline chief of Ukraine's presidential administration and one of the country's wealthiest businessmen, is sticking with Mr Yanukovich.
Mr Medvedchuk knows that Mr Yushchenko, who leads in the opinion polls, is likely to win. However, he seems to be positioning himself near to Mr Yanukovich because the prime minister could emerge as the main opposition leader under a Yushchenko administration. Mr Medvedchuk and Mr Yanukovich are close to the Kremlin and could in future be an important channel for continuing Russian influence in Ukraine.
Mr Medvedchuk, previously a loyal ally of President Leonid Kuchma, played a big part in the president's current efforts to retain political influence after he leaves office. He also persuaded Mr Kuchma that backing Mr Yanukovich was the best way of remaining close to power. Since last month's disputed poll, Mr Yanukovich has broken with Mr Kuchma and has positioned himself as the openly pro-Russian leader of the industrial east.
In contrast to Mr Medvedchuk, most others in the administration have already switched sides, such as deputy chief Vasyl Baziv, who told the Financial Times at the weekend: "I think Ukraine already has a president. He is Viktor Yushchenko. I think 50 per cent of civil servants already say this aloud and 80 or 90 per cent already believe it."
Mr Medvedchuk cannot expect to stay in office much longer. Two presidential spokesmen on Tuesday said that he had already offered to resign but his offer had not been accepted. But even out of office, Mr Medvedchuk will remain influential as co-head of one of the country's richest financial groups, together with his long-time partner, Grigory Surkis. The two men control the Dynamo Kiev football team, two manganese plants, a large paper mill, a builder of gas pipelines and nine regional electricity distributors covering one-third of the country.
Their political party, the Social Democrats, holds 33 of parliament's 450 seats, down from 40 before the elections but still enough to exert influence in a highly fractious legislature.
Mr Medvedchuk's central role in the Kuchma administration nevertheless could come back to haunt him.
Svyatoslav Piskun, the prosecutor-general, is investigating allegations of fraud in last month's elections, in which Mr Yushchenko alleges Mr Medvedchuk played a lead role.
Mr Piskun has also re-opened an investigation into Mr Yushchenko's poisoning, the cause of which was diagnosed at the weekend as dioxin.
The investigation is expected to focus on a late-night meeting at a villa outside Kiev hosted by Volodymyr Satsyuk, a deputy chief of the SBU secret police and a Social Democrat MP. Mr Yushchenko, in parliament, has accused the "authorities" of responsibility for the poisoning.
Meanwhile, the Kiev city prosecutor is probing the sudden death this month of Yuri Lyakh, head of Ukrainian Credit Bank, which Mr Medvedchuk and Mr Surkis founded. Mr Lyakh was reportedly found in his office with his throat slit.
One of Mr Medvedchuk's former partners, Konstantin Grigorishyn, told the Financial Times he was preparing a package of lawsuits aimed at wresting control of Dynamo Kiev and other interests from Mr Medvedchuk and Mr Surkis.
Mr Grigorishyn said he would argue in court that he was wrongly deprived of his assets.
Look for FairOpinion, jb6 et alia to propose that this was far too hamfisted to be an actual assassination.
A slit throat? Please! He probably just choked on a "bad pretzel."
translated by Roman Olearchyk , 14.12.2004, 22:44
Below the reader may find excerpts of "Pravda" interview with famous Ukrainian businessman Konstantin Grigorishin. Translation of the text was made by our collegues from "Kyiv Post" English Weekly Newspaper. In the interview Grigorishin describes how former business partners Viktor Medvedchuk and Hryhory Surkis turned into enemies and swindled him of his assets. Mr. Grigorishin also promises to take back what he insists they wrongfully took from him.
Q: How do you explain your recent common appearances in Ukraine? Have you returned to take back that which was taken from you?
A: In a certain sense yes. Our group has significant assets in Ukraine, which are managed by people who I poorly understand and who have caused a massive amount of problems for me, so that I would not have access to these assets. (Note: these assets include: minority to blocking 40 percent shareholdings in 7 regional electricity distributors, including Chernihivoblenergo, Kirovohradoblenergo, Lvivoblenergo, Poltavaoblenergo, Prykarpattyaoblenergo, Sumyoblenergo and Ternopiloblenergo. Controlling shares in Sumy-based Frunze machine plant, and Zaporizhtransformator power sector transformer plant are also part of his holding.)
Q: So the situation is that the Surkis group gives commands [managing these assets,] but these assets belong to you, and they are registered in some offshore zones?
A: Basically yes. Honestly, I don’t always pay so much attention to how its registered. My corporate governance department deals with this.
Q: How do you plan on regain that which you allege Surkis took away from you?
A: I plan on using legal mechanism. In addition to seizures of management rights, some assets have had changes in ownership. Surkis considers it belonging to him. I consider that it belongs to me and that it was acquired [by him] through deceit and extortion.
Q: What is the substance of this in more detail?
A: We are taling about shares in electricity distributors, which belong to Surkis and [his associate Bohdan Hubsky]. Hubsky established these offshore companies and managed them.
Q: How did you fall into the sphere of this company [of individuals]?
A: We stumbled into some problems - [State-owned nuclear power company] Energoatom stopped making payments [for fuel supplied]. I was told that there is this guy called [Hryhory] Grisha Surkis, part of the [Big] Kyiv Seven business group, who could help. That’s how we met in 1998. Then we reached a business agreements. We had some business projects through which we divided profits on 50 percent parity terms.
Q: Why?
A: For ‘Krisha’ (A term used to describe protection, racketeering, influential support).
Q: Did you buy electricity distributors with their help?
A: No. We bought them all practically without them. The issue was more about having the ability to effectively manage these distributors, rather than having them completely take them away from us. Experience has shown that they were capable of this. This was their work – offering a Krisha.
Of course, this was my mistake. We should have withstood, but with whose help? This was simply the way the system worked – everyone had to pay. Otherwise you simply wouldn’t be allowed to participate in big business.
Q: You tried return ownership control with the help of [President Leonid] Kuchma’s son-in-law [Viktor] Pinchuk?
A: We tried to setup a Ferroalloy holding with Pinchuk. It all ended with Surkis taking two ferro alloy plants away from me.
Q: They bought them didn’t they?
A: Sort of bought them at a discount price using profits which I didn’t receive. In otherwords, they bought it with my money.
Q: What are you going to do now?
Surkis at this point has 51% of Zaporizhya Ferroalloy Plant. In the beginning I had 90%. Then Hrisha came to me and said: “I want to be a partner with you, but I have not money, nothing at all, except Dynamo Kyiv [soccer club,] which costs a lot of money and will help us in politics. I offer you 20% of Dynamo Kyiv and you will become our partners for life.”
I said: “Hrisha, I don’t need Dynamo Kyiv.”
He said: “You don’t understand. You will become the number 2 person after Kuchma. You will become my brother. I have two brothers, Ihor Surkis and you!”
I understood that he would not give up. And I didn’t want a war. I said: “Ok Hrisha, lets trade 40% of the ferroalloy plant for 20% of Dynamo Kyiv.”
I gave him a part of the ferroalloy plant, part of my electricity distributors, part of [specialty steel plant] Dniprospetsstal. Later Hrisha wanted to get a controlling share in the ferroalloy plant – he always wanted this.
In 2000, he said: “You know, Papa’s (nickname for President Leonid Kuchma) birthday is coming up.” I said: “Greet him from me - I don’t know him.”
He said: “We need to buy him a gift.” I said: “Lets buy him a painting.”
He said: “No, you don’t understand. We need to give him assets, shares, 10% of all that we have.”
I said: “I don’t’ agree with this.”
Then we bargained for a long time. They talked with Medvedchuk, that we should give everything to Papa, otherwise nobody works in this country. And that 10% is not enough, in general most give 25%.
We agreed on the following: that I would give 10% of that which I privatized on my own.
This is how Surkis got a controlling stake in the ferroalloy plant – but with Papa! But I’m not certain that Papa knows about this.
Q: You say that Surkis took so much from you. What did he have when you first met?
A: I don’t know, but he would always complain that he didn’t have enough money.
Q: How much money did you have at that time?
A: Not less than today.
Q: How much?
A: I won’t say.
Q: 20% of Dymamo Kyiv was registered to you?
A: Yes, and this was the problem for Surkis. For example, they always promised to give me my shares in television station TET, which was established with my money, but they didn’t. But in the case of Dynamo, they did, otherwise the share swap deal would not have been possible.
By the way, I had 20%, then it turned to 18%. I gave 2% to Papa.
Q: Does Papa know?
A: I’m afraid not.
Q: And you plan on [taking back what was taken from you after the election, including the shares in Dynamo Kyiv?] Do you think Surkis will give it back?
A: I think he will try to kill me.
Q: Are you serious?
A: Of course. While my goal is not to take Dynamo Kyiv. I will take it out of principle. My goal is to return the assets which they took from me [through the Dynamo Kyiv share swap deal.] If not, then I will take Dynamo Kyiv. I have strong legal arguments for doing so.
Ukrainian Transport Minister Heorhiy Kirpa has been found dead with a gunshot wound, a spokesman for the nation's railways said on Monday.
The death came a day after presidential elections in which Prime Minister Viktor Yanukovych, whom Kirpa strongly supported, trailed opposition leader Viktor Yushchenko.
Opposition figures had claimed Kirpa allocated trains to ferry Yanukovych supporters to vote at multiple polling stations in presidential balloting last month that was annulled by the Supreme Court.
Kirpa's body was found in his country house just outside the Ukrainian capital Kiev, spokesman Eduard Zanyuk said.
"The man has passed away. An investigation will clear up the circumstances," Zanyuk told The Associated Press.
Local media speculated that the death was a suicide, but officials did not confirm that. The Unian news agency reported that a gun was found near the body.
Kirpa, 58, was a top-ranking official in the Social Democratic Party United, led by Viktor Medvedchuk, the former chief of staff of outgoing President Leonid Kuchma. He was appointed by Kuchma in 2002.
A duty officer in Kiev's police headquarters told the AP that Kirpa had been found wounded. He refused to give further details.
© 2004 AP
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