Ukrtelecom: Bad bill of sale
KYIV. (February 12, 2018) An extraordinary and important document was published to the Internet last week — the Russian-language translation of the interim decision by the London Court of International Arbitration (LCIA) in a billion-dollar dispute over the 2013 sale of Ukraine’s biggest fixed-line telecoms operator Ukrtelecom.
The 135-page brief explains the eight-year privatization nightmare of what was once one of the Ukraine’s most prized assets. The “agreed chronology of events” addendum, which starts from October 12, 2010 and ends on April 26, 2017, is eleven pages long.
The bombshell details previously unreported efforts undertaken as early as 2010 by disgraced ex Ukrainian President Viktor Yanukovych and cronies — his chief of staff Serhiy Lyovochkin, then Ukrainian SBU State Security chief Valeriy Khoroshkovsky, fugitive billionaire Dmytro Firtash and the president’s oldest son Oleksandr — to privatize Ukrtelecom unto themselves.
According to the LCIA protocol, Ukrainian oligarch Rinat Akhmetov’s Systems Capital Management (SCM) paid $100 million upfront for Ukrtelecom in 2013, but nothing more. Claiming the remaining amount, Raga appealed in the summer of 2016 to the LCIA, which last summer pre-supported the plaintiff and ignored the demands of SCM to terminate the transaction of sale. SCM’s appeal against the interim verdict is scheduled for May 2018.
Famous last words
During the next LCIA hearing on the dispute, all eyes will be on Vienna native Dr. Peter Goldscheider, Ph.D, EPIC managing partner, who serves as the Chairman of the Board of EPIC Russia Ltd.
Goldscheider, who excused himself as a witness at LCIA hearings because of his busy schedule, served as Chairman of the Supervisory Board of Ukrtelecom from August 2011 until October 2013. He played a key role in the initial privatization of Ukrtelecom and its resale to SCM.
Goldscheider opined at length about Ukraine to the Swiss newspaper Tages-Anzeiger about his investments in Ukraine and the Revolution of Dignity days after Russia invaded Crimea in a controversial February 24, 2014 interview, titled “Next comes the witch hunt.” Many Ukrainians then and today would disagree strongly with his description of events and predictions for Ukraine’s future.
The Golden Order of Merit of the City of Vienna recipient in 2011 famously — and disingenuously — denied any connections with Ukrainian oligarchs, saying his company had plans to restructure Ukrtelecom before exiting the investment in four to five years.
According to court documents, SCM first received an offer to buy Ukrtelecom in August 2012, when Valeriy Khoroshkovsky headed Ukraine’s SBU State Security Service and reportedly owned a 25% minority stake. The rest allegedly belonged to Firtash, Group DF owner. Khoroshkovsky currently resides in Monaco. Firtash has been under house arrest in Vienna since early 2014 fighting extradition to the United States on corruption charges.
One of the biggest takeaways from the LCIA protocol, now cited in articles published by Ukrainian media, is that talks about the sale of Ukrtelecom to Akhmetov began at the explicity request of President Yanukovych, who in 2012 allegedly asked richest man to buy part of the company because he wasn’t sure Raga was capable of managing and developing it independently.
Conspicuously absent from the LCIA protocol is mention of the fact that Khoroshkovsky was an advisory board member of two state banks, Oschadbank and Ukreximbank, which in early 2013 loaned ESU $500 million. The loans have not been paid back.
The court documents also show how SCM executives first learned about Firtash’s stake in Ukrtelecom from ex National Bank of Ukraine Chairman Serhiy Arbuzov, who, on behalf of the president’s son Oleksandr, negotiated details about the sale. Lawyers for Raga deny Firtash owns Raga, saying the company’s beneficiary is actually Denys Gorbunenko, a once promising young Ukrainian financier. After the destruction and nationalization of his Rodovid bank in 2008, Gorbunenko became one more Ukrainian living in London. Following Firtash’s 2014 arrest in Vienna, Gorbunenko became the de facto beneficiary of Raga and has been seen in Vienna handling mundane tasks for Firtash, such as buying airplane tickets and arranging hotel rooms for the oligarch’s guests.
What role, if any, Yanukovych’s former chief of staff Serhiy Lyovochkin played in the privatization of Ukrtelekom also remains a mystery, even to the LCIA. Lyovochkin is currently a parliament deputy belonging to the Moscow-friendly Opposition Bloc. According to an investigative report, titled “Cote d’Azur: How Lyovochkin’s villa near Nice led to the deal with Ukrtelecom,” Lyovochkin, at a minimum, had ties to EPIC. At a maximum, he was — or remains — an EPIC beneficiary. According to the report, Lyovochkin also served as the head of Ukrtelecom’s advisory board when the idea to privatize Ukrtelecom was first hatched.
SCM’s lawyers say they did pay not Raga the promised subsequent tranches, $96 million and $660 million, respectively, because further payments were based on the understanding any problems with Ukrtelecom’s initial 2011 privatization would be handled by EPIC and its backer Firtash, at their expense. They also claim Raga did not ensure the fulfilment of all obligations of the initial privatization deal between EPIC’s Ukraine-based subsidiary ESU and Ukraine’s State Property Fund, which last year successfully challenged the results of Ukrtelecom’s initial privatization in Ukrainian courts. Even pending an the scheduled appeal of those verdicts, Kyiv now has legal grounds to return Ukrtelecom to state property.
According to SCM Director for International and Investor Relations Jock Mendoza-Wilson, the secret involvement of highly ranked government officials in the Ukrtelecom privatisation in 2011 raises many questions.
In an interview published by the Kyiv-based Interfax-Ukraine news agency on January 25, 2018, he said the LCIA interim ruling leads to an unfair outcome: on the one hand, SCM has to pay the remaining price for the business to Raga, and, on the other hand, the business for which SCM will be forced to pay in full to EPIC/Raga has been in fact confiscated by Ukrainian government under rulings of Ukrainian courts.
“We believe that there is the only one right decision for us now: to stand back, return our prepayment and restore the original agreement between Raga and the Ukrainian government so that they can settle their mutual claims with each other,” Mendoza-Wilson said.
УКРАИНА-СКМ-СУД-ОБЛИГАЦИИ-УКРТЕЛЕКОМ
ВХСУ перенес рассмотрение дела о возврате государству акций “Укртелекома” на 13 марта
Киев. 20 февраля. ИНТЕРФАКС-УКРАИНА — Высший хозяйственный суд Украины (ВХСУ) перенес рассмотрение кассации по делу о расторжении договора о покупке ПАО “Укртелеком” между компанией “ЕСУ” и Фондом государственного имущества (ФГИ), сообщили агентству “Интерфакс-Украина” в пресс-службе компании.
На заседании суда во вторник судья объявил перерыв в заседании до 13 марта. Причину перерыва и другие детали судебного процесса в компании не раскрывают.
Как сообщалось, ФГИ в начале 2011 года продал 92,79% акций “Укртелекома” ООО “ЕСУ” за 10 млрд 575,1 млн грн (на тот момент — около $1,3 млрд). Однако в 2017 году ФГИ обвинил “ЕСУ” в невыполнении инвестобязательств, состоявших во вложении $450 млн инвестиций и передаче государству спецсети связи, и к середине декабря добился в судах двух инстанций решения о возврате 92,79% акций в госсобственность. Владелец “Укртелекома” заявил о намерении подать кассацию.
Параллельно с “ЕСУ” судятся государственные Ощадбанк и Укрэксимбанк, которые в 2013 году приобрели его облигации более чем на 4,2 млрд грн и теперь требуют их погашения и выплаты по ним процентов. Согласно данным в системе раскрытия информации НКЦБФР, ООО “ЕСУ” за девять месяцев 2017 года сократило чистый убыток в 8,2 раза по сравнению с аналогичным периодом 2016 года — до 0,13 млрд грн, однако накопленный непокрытый убыток к концу сентября достиг 6,89 млрд грн, выручка отсутствовала. Основным активом предприятия являются долгосрочные финансовые инвестиции — акции “Укртелекома”, стоимость которых в балансе оценена в 10,8 млрд грн, согласно договору купли-продажи от 2011 года.
В настоящее время владельцем “ЕСУ” выступает СКМ, которая в 2013 году купила эту компанию у кипрской Raga (ранее) и обвиняет ее в нарушении условий продажи в виде невыполнения приватизационных инвестобязательств, добиваясь расторжения договора купли-продажи и возврата “ЕСУ” в собственность Raga.
В свою очередь Raga требует от СКМ оплаты $820 млн по вышеуказанному договору.
Спор между компаниями рассматривается в Лондонском суде, и СКМ предлагает государству дождаться решения этого суда для окончательного разрешения приватизационного спора.
