Oligarch in the president's chair: What is happening to Poroshenko's business?

Author : Yanina Korniyenko Oleksandr Moiseyenko

Source : 112 Ukraine

During three years of Poroshenko's presidency, significant separation between political power and business at the state level did not take place
21:12, 13 June 2017

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Three years ago the inauguration of President Petro Poroshenko took place, who has long been considered a major Ukrainian businessmen.

Combination of the political activity, key government positions, and a regular place in the list of Forbes is a typical story for Ukraine. But on the eve of his election Poroshenko actively imposed public opinion that he is not a usual oligarch.

This helped him to gain the commitment of electoral voters, who after the Revolution of dignity expected of true separation of business from power.

Related: Panama court arrested founders of Mossack Fonseca

Moreover, Poroshenko said that he got rid of the business, including his "Channel 5," and would deal only with public issues.

"A new tradition will be founded: a person comes to the top job, makes decisive steps to demonstrate not only the country but also the world that he/she gets rid of the business, sells it and concentrate all his/her efforts to the serve of the people. I am going to do that, " said Poroshenko.

We have checked how business of the Ukrainian president in three years has changed, and which of these assets have increased.

Not by "Rochen" alone

The world “Poroshenko” in Ukraine and the world is associated with confectionery company "Rochen". This is the most precious asset that belongs to the Ukraine’s president.

In fact, Poroshenko’s business are tens of enterprises in different industries. Besides confectionery Poroshenko’s sector interests include financial industry, agribusiness, and media. The President is also often associated with the automotive industry.

"Rochen" was transferred to "blind trust" due to lack of offers that would satisfy Poroshenko, he said nothing about the sale of his other assets.

Based on public information, these assets are not transferred to "blind trust" and wrapped in a kind of internal offshore - JSC "Closed non-diversified corporate investment fund "Prime Capital Assets." QP of the structure is the father of the president 80-year-old Olexiy Poroshenko.

Related: Panama Papers: Poroshenko linked to offshores cooperating with Russian “Gazprom”

This fund is managed by AMC Ltd. "Fusion Capital Partners." The latter also manages funds of Poroshenko’s friends: JSC "Investment Fund VIK" of Igor Kononenko and JSC "Investment Fund Sova" of Oleg Hladkovsky are in its management.

Behind these complicated acronyms are simple mechanisms are Ukrainian formal compliance with the law on civil service. These funds are often used for joint investment and are really distant from the present venture investment. All these companies are the only a form of collective investment institutions. In fact, they are used as a form of ownership of assets and the way to optimize tax revenue because the fund is not taxed until the closing of the investment fund and payment of income to the investor.

In simple terms, the fund is a purse, managed by a specialized manager - AMC. There are lots of such assets in Poroshenko’s purses. 

Based on public information, the majority of companies were not passed into "blind trust". The fund did not answer to our request. The only thing company that was passed to the "blind trust" was "Rochen".

Sweet asset

Roshen is one of the largest producers of confectionery products in Ukraine and Eastern Europe. The company provides not only Ukraine through its own distribution network, which has 43 branded stores, but also supplies 28 countries of the world.

Related: Panama offshores: what's common between Ukraine and Iceland?

According to the rating of the American edition Candi Industry, in 2017, Roshen ranked 24 in the list of the world's hundred largest confectionery companies, leaving Ukrainian major competitors ("Conti" and the AVK) in the list below (43 and 67 positions).

It is interesting to compare data by Candi Industry with the results of the president’s companies  and competing firms. Thus, Roshen in 2013 fell in the ranking by four positions, "Conti" – by seven positions, AVK – by twelve positions.

Along with the holiday in chocolate manufacturers falling revenues.

Thus, Roshen in 2013 has lost 476 thousand dollars, "Conti" - 47 thousand dollars, AVK - 6 thousand dollars. Therefore, Ukrainian companies are rapidly losing their positions in the world ranking. This is logical, given the economic situation in Ukraine.

The company "Rochen" did not disclose its figures. It declined to comment on the situation regarding its position and competitors.

Financial Empire

An important role in business of every oligarch plays his financial part.

During the presidency of Yanukovych his inner circle began to play a major role in the financial sector of Ukraine. All the basic agreement were concluded in favor of the "family." Associated with the "family" insurance companies and banks have won the most advantageous tender. But Yanukovych’s financial empire began to collapse after the Revolution of dignity.

Ambitions of the financial companies of the current president are lower, at least those companies that belong to him officially, being managed by the mentioned fund.

Related: “Panama Papers” database became public: 165 Ukrainians have offshores

During three years of presidency, the insurance company "Krayina" did not break into the lead. Thus, it occupies 20th place among net insurance premiums, while in 2013 it ranked 26th.

According to one of the insurers, "Krayina" is a market company, which behave decently, is not involved in scandalous tenders.

Another thing is the bank of Poroshenko – International Investment Bank (IIB). Previously it was a young captive bank that mainly served the interests of Poroshenko’s companies and their partners, and by assets it took ninth place of top ten, now it is rather big financial institution with assets of nearly 7 billion with very attractive rates.

However, bank was seen in some scandals. In a recent investigation we stated that 300 million of Yanukovych’s family as a result of law enforcers sabotaging went to the bank of Poroshenko and began to bring him income.

Entities entrust their money to the bank of Poroshenko at 6.72% per annum, while the average market figure is about 9.02% per annum. Consequently, the bank attracts funds on favorable terms, but in general these conditions are market ones.

Related: Roshen liquidation starts in Lipetsk: 700 people to be fired

Given the performance of the bank, we can conclude that everything goes well in other businesses of Poroshenko and his friends, as they are the main debtors IIB.

Effective agrarian

Poroshenko’s Foundation owns the company "UPI-Agro". It includes Kryzhopilsky, Haisynsky and Pohrebyschensky refineries, agrofirms "Dniproahrolan", "Mas Agro" and "Ivankivtsi", Vinnytsia KHP №2, pedigree cattle "Litinskiy", several elevators and transport companies.

"UPI-Agro" grows crops, produces sugar, flour, meat and milk. This is probably the most stable business of the president. In 2015, agricultural holding has entered the top 20 effective holdings according Ukrainian Forbes. Sugar production in 2016 compared with 2015 year increased by 30% to 253 thousand tons, flour production at Vinnytsia bakery plant №2 grew by 70%, allowing the company to take second place among the largest exporters of the product.

In 2016, "UPI-agro" began to build a new elevator capacity of 68 thousand tons in Vinnytsia region. Investment in the first phase of the project amounted to 120 million UAH.

Related: MP Kononenko was poisoned with mercury, - media

According to Landlord, Poroshenko ranks fourth in the ranking of the largest landowners of Ukraine in 2016 with a capital of 607 million dollars. The publication evaluates the rescue of "UPI-agro" of $ 185.3 million.

Second Life of "Leninska kuznia"

Poroshenko's business empire also includes JSC "Plant "Kuznia na Rybal's'komy" former "Leninska kuznia", one of the oldest enterprises of Kyiv. The factory produces armored vehicles, weapons, builds and repairs ships.

Poroshenko’s fund "Prime Assets Capital" owned 82.5% stake in the plant, is 11.5% belonged to Fund "VIC" (headed by deputy chairman of the faction "Block Poroshenko" Igor Kononenko, a longtime friend and business partner of the president). By 2014, the company was unprofitable, but in 2015, the situation has changed.

In October 2014, the plant signed a contract with the Ministry of Defense to build two armored artillery small boats and then got engaged in the development of weapons for the army.

Despite this, the company has been noticed in several frauds. In 2014, it participated in the tender, the competitors were fictitious companies registered at the same address as "Leninska kuznia". In the spring of 2017, the plant became a "padding" to repair the frigate "Hetman Sahaidachny," so it won the tender for 15 million.

State of "Leninska kuznia" has significantly improved by promoting key figures in the defense sector. Contracts of the Defense Ministry were concluded during the work of Oleg Hladkovsky, working as the Deputy Secretary of the NSDC, who is a longtime business partner of Poroshenko and university friend of Kononenko.

Thus, in 2016, for the first time in many years the plant ended with a profit of about 9 million. The loss of the company in 2015 amounted to 5.535 million UAH.


President has been always interested in media. Before the revolution, his main media source was "5 channel". Poroshenko stressed that it is the only business that he has not sold.

Related: Putin and Poroshenko shook hands at the Normandy talk meeting in Paris

However, the channel was quickly pushed by the other news resources. At the forefront was the channel "112", on which Poroshenko “ has put his eye.” It seems he not only refused to sell his media business, but really wanted to expand it.

Related: 112 Ukraine TV channel is fighting for its right to broadcast

Related: Poroshenko's black hand

Controversial MP Oleksandr Onishchenko, and then the former owner of the bank "Mykhailivsky," no less odious Viktor Polishchuk, who was called situational business partner of the president, tried to negotiate with the owner of But the attempt failed.

Related: Ex-Director of Mykhailivskyi bank released under house arrest

Related: Deceived deposits: Ukrainian authorities do not want Mykhailivsky bank case to repeat

Related: Mykhailivskyi Bank depositors picketed Ukrainian Parliament, demanded their money back

However, the team of the president has bought "Tonis" channel, although the nominal owner is a former member of Yanukovych’s "Party of Regions" Volodymyr Makeyenko.

Dear friends of President Porohsneko

Business friends of the president deserve individual attention. The above mentioned Igor Kononenko is associated with a number of state enterprises. First a senior who talked about it was the former Minister of Economy Aivaras Abramavichus.

"I have no desire to be a cover for blatant corruption or controlled puppet for those who want to strengthen the control of public money. I do not want to go to Davos to tell them about the successes, while behind our backs some issues are solved purely in the interest of the individuals.

These people have names. One of them is Igor Kononenko’s name," said Abramavichus. Nevertheless, Kononenko and still an influential figure for state-owned enterprises - especially in the energy sector.

Another friend of Poroshenko, the former owner of the Ukrainian media holding Borys Lozhkyn, has also increased the influence. In 2014, he became the head of the Presidential Administration.

Poroshenko is familiar with Lozhkin since 2000, when they both owned radio "Retro FM". Since his appointment to head the AP former businessman only strengthened his position. January 2016 a material appeared, which refers to the impact of Lozhkin on tobacco market in Ukraine.

One of the shareholders of the tobacco monopoly "Tedis-Ukraine" (formerly "Megapolis Ukraine") is a Ukrainian millionaire Borys Kaufman, a friend and business partner of Lozhkin. In 2014, radio "Liberty" made a report on a night meeting of Kaufman and Lozhkin.

In addition, firms associated with the president, such as investment company ICU, the founding chairman of which is NBU Valery Gontareva and Makar Pasenyuk, who is called "Poroshenko’s financier" have strengthened the influence too. Pasenyuk himself denies this.

Unlike previous periods, assets officially owned by the president are not market makers market through administrative intervention. However, a significant separation between the political power and business at the state level in Ukraine has not happened. This is about President Petro Poroshenko as well.


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