Is trust of President Poroshenko really "blind?"

Author : Igor Smolov

Source : 112 Ukraine

In the light of numerous discussions about whether the president fulfills his election promises, we decided to look at the situation around the main asset of Poroshenko’s business empire
15:14, 30 October 2017

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In the light of numerous discussions about whether the president fulfills his election promises, we decided to look at the situation around the main asset of Poroshenko’s business empire. A year ago, the politically active part of the society turned into experts on blind trusts and international corporate law. When the heat of passion is a little colder, let us still try to figure out whether the trust is really "blind".

According to experts, the trust can be considered "blind" if, by the rules of the trust, the beneficiary does not have the right to dispose of the property transferred to the trust or even to receive information about how the assets transferred to the trust are invested. As a rule, the need for this arises if the beneficiary has a conflict of interest between his private assets and public office.

The most developed regulation of "blind" trusts for civil servants operates in the United States. There is even a concept of an "acknowledged blind trust" - it is a trust that meets additional criteria for eliminating a conflict of interest. The trust cannot be recognized as "blind" for civil servants unless assets are transferred to the management of a truly unrelated person. For example, Clinton and Bush transferred their assets to the "recognized blind trust."

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The first question that comes to mind is whether Poroshenko’s trust exists. Let us look at the documents.

So, LLC "Central European Confectionery Corporation", that is, the notorious Roshen, now belongs to one of the three scandalous companies Roshen Europe BV by 85%. The rest belongs to the Ukrainian investment fund "Kondytorinvest", owned by president Moskalevsky corporation, and 0.5% belongs to four individuals.

Roshen Europe BV, in turn, is 100% owned by CEE Confectionery Investments (another company from the Panamanian scandal of the president).

So where is the promised Rothschild? Well, let us look a little further. On Cyprus, we will see that 100% of this structure belongs to RothschildTrust (Schweiz) AG as a trust of Prime Asset Capital Trust.

Well, that is actually a confirmation that the trust as such exists.

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It is very difficult to establish how much is the trust "blind" without studying the full text of the trust agreement. At the same time, there are several points that will help verify this fact:

- personality of the traits;

- presence of independent managers.

In the US, it is easier to sort out this issue - there is an authorized state body that checks the "blindness" of the trust - U.S. Office of Government Ethics. In Ukraine has National Agency on Corruption Prevention, which should have checked such questions, but its qualification seems to be worse than that of the American counterparts.

As we have already seen, Rothschild Trust (Schweiz) AG is listed as a shareholder of Roshen and the trust of the same trust. What have we find out about this company? Well, at least the fact that it is part of the Rothschild & Co group. It conducts activities in the field of private wealth. According to the site, "we begin cooperation with an understanding of what inheritance you want to leave after yourself." Sounds beautiful, right?

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Rothschild & Co group, in turn, is half owned by the Rothschild family, and the second one - by various investors. So the Poroshenko’s trust appears to be ruled by people from the Rothschild group, and he has a claim to be called "blind."

It did not work out with his colleague, president in the US, Donald Trump. Trump transferred his business empire to a trust to his sons, and not to a "blind" trust, as he claimed. Despite several months of debate over this situation and demands to create a "blind" trust, the US president was never able to convince him of the need.

In order to understand whether Rothschild really manages companies in a "blind" trust, it is also worth considering, and who is the director there. According to the corporate register of Cyprus, Rothschild "dismissed" the directors appointed by Cypriot lawyers of Poroshenko, and appointed RTB Administrators AG as the company's director. The company RTB Administrators AG is registered at the address of Rothschild Bank in Switzerland and manages the enterprises.

Rothschild undertook another personnel change - appointed two additional directors in Cyprus, Emily Yiolitis and ΠΑΥΛΟΣ ΑΡΙΣΤΟΔΗΜΟΥ (Pavlos Aristodemou), partners in Harneys international firm.

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If you look at what happened to a company in the Netherlands, you will see the changes - Rothschild has appointed Albertus van Beek to the board of directors. True, there is no public access to the information on this person. The only link between the new CEO of Roshen Europe, is that he is the director and owner of Van Beek Management Partners BV and Schelpstaete BV. Both companies are registered in Wasenaar, near The Hague. In the summer, Roshen Europe moved to the same place.

We cannot definitely say that all persons involved in the management of foreign companies are independent. Since the creation of Roshen Europe in 2014, Serhiy Zaitsev has been listed as its director (and continues to be listed). A person with the same name appears as the leader of the foreign trade direction Roshen, and is also mentioned in the list of close friends of Poroshenko. He does not deny his friendship and old partnership with the president, but nevertheless declares himself as an independent businessman.

Apparently, Zaitsev managed to convince Rothschild that he was a worthy candidate for the position of director of the company. Or, perhaps, he simply performs part of his functions as the head of the foreign affairs department of Roshen through the directorate in Roshen Europe.

Of course, there is not much information in public registers about the trusts. However, the picture that emerged around the "blind" trust of Roshen gives grounds to state unequivocally that this trust exists.

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