Interview with Zhevago for Forbes // Photo by Natalya Kravchuk
One of the richest Ukrainians, Konstantin Zhevago, risks losing his main assets in Ukraine due to a conflict with the current government. What is the way out of the deadlock? Zhevago’s first big interview after his departure from Ukraine. Forbes
In March, Konstantin Zhevago won court about extradition to Ukraine, where criminal proceedings await him about fraud in his former bank Finance and Credit, which went bankrupt in 2015. While Zhevago remains in France under recognizance not to leave, bad news comes from his homeland almost every week.
Zhevago’s name appears in a case of high corruption in the Supreme Court (SC) – NABU and SAP suspect the entrepreneur of trying to pay $2.7 million to the head of the Supreme Court Vsevolod Knyazev for the “correct” decision in the Poltava Mining and Processing Plant case. Zhevago is suing the Russian group VS Energy for his main asset. never gives up trying return 40.19% of the plant’s shares purchased by Zhevago back in 2002.
Earlier trial arrested the businessman’s assets amount to UAH 46 billion and shares in three mining and processing enterprises. BEB is investigating understatement of rent by UAH 10 billion. AvtoKrAZ was nationalized for allegedly sabotaging orders for the Ministry of Defense; the pharmaceutical company Arterium is suspected of continuing activities in the Russian Federation (*country sponsor of terrorism). Zhevago, who has not been able to set foot on Ukrainian soil for four years, blames his problems on corrupt officials and security forces who allegedly received the green light for their actions in the Office of the President.
In 2022, the majority owner of the Ferrexpo mining group and number five on the Ukrainian Forbes list of the richest impoverished for $1 billion. What future awaits his business empire? In an interview, the entrepreneur spoke about the confrontation with Vladimir Zelensky, the agreement that he was offered in the President’s Office for closing the Finance and Credit case, and how his assets are surviving the war and pressure from opponents.
Konstantin Zhevago’s original interview with our publication was recorded before the publication of the “Knyazev tapes”. After NABU released information about the search, we contacted Zhevago’s press service and recorded an additional part.
Forbes is publishing a condensed version of the interview, edited for clarity. Forbes is willing to provide an opportunity to respond to individuals mentioned in the interview.
Interview with Zhevago: About the “Knyazev tapes” and $2.7 million for the decision on the Poltava Mining and Processing Plant
Denis KatsilO: You became involved in a corruption case in the Supreme Court. Your press service distributed press release which she denied the accusation. How did your name end up next to Knyazev in the bribery case?
I have nothing to do with this matter. I believe that the Ferrexpo case and my name appeared there because we worked with many lawyers – five or six law firms defended us, and the entire legal market of Ukraine knew this case and was expecting a solution. That is, 100% it was discussed a lot everywhere.
The crux of the matter at the Poltava Mining and Processing Plant
September 12, 2022 Northern Economic Court of Appeal quite unexpectedly invalidated in 2002, the mining company Ferrexpo Konstantin Zhevago purchased 40.19% of the shares of the Poltava Mining and Processing Plant and transferred them to four companies owned by the former shareholders of the Poltava Mining and Processing Plant.
20 years ago, Zhevago and VS Energy fought for control over this mining and processing complex; among its beneficiaries then were Russian businessmen and politicians Alexander Babakov, Evgeny Giner and their partners, together they concentrated 40.19% of the mining and processing complex shares. Zhevago and his partners were able to consolidate more than 50% of the Poltava enterprise at the beginning of the 2000s; operational control was his. In 2002, Zhevago agreed with the Russians to buy out their share for $27 million.
The agreement was structured through non-resident companies from the VS Energy orbit: Gilson Investments, Calefort Developments, Emsworth Assets and Trimcroft Service, which collectively owned 40.19% of the shares of PGOK. The buyers from Zhevago and his minority partners were Eastcoast United Inc., Statex Corp., Newport Inc., Sayers Holdings Limited.
After several additional issues and forced repurchase of shares from minority shareholders as part of the squeeze-out procedure, Ferrexpo became the sole shareholder of PGOK.
In 2005, the Russians decided that they had sold too cheap and appealed the three-year-old agreement in court. It seems that the end to the case, which lasted about 10 years, was put in 2015 by the Supreme Economic Court, which sided with Ferrexpo.
The next act of the legal drama unfolded five years later and is still ongoing. In the first half of 2020, claims were filed against legal shareholders, and in May 2021, the Kyiv Economic Court refused to invalidate Trimcroft Services’ purchase and sale agreement for a 40.19% stake in PGOK. However, the next instance, the Northern Economic Court of Appeal, sided with the plaintiff.
On April 19, 2023, the Grand Chamber of the Supreme Court of Ukraine partially satisfied the cassation appeal of Ferrexpo AG against the decision of the previous instance court. The latest decision of the Supreme Court is mentioned in the materials of NABU.
D.K.: How and from whom did you learn about Knyazev’s case?
From TV. I started receiving messages at one o’clock in the morning on the day when Knyazev was detained. And somewhere around two or three hours after the arrest took place, speculation began to appear in various media, in the yellow press.
It is clear that this could happen to any person. And this coincided with one of the largest Supreme Court cases, which concerned a 40% stake illegally taken from Ferrexpo 20 years after it acquired it and which today is worth several hundred million dollars.
Is it my voice on the tape? I admit that it could be me
D.K.: Have you received any appeal from law enforcement agencies?
I didn’t receive any treatment. I don’t understand my status in this case. I am preparing documents to ask for an explanation of my status. I am ready to provide the investigation with any information on this case. I want to cooperate and prove that neither I, nor our lawyers, nor Ferrexpo have had, have or will have anything to do with any illegal actions in this case or any other cases.
D.K.: In films published by NABU with records conversations, one interlocutor with a voice similar to yours is introduced as a Shareholder. To be precise, you are saying that the Shareholder from the tapes is not you and the voice is not yours?
No, I’m not saying that now. I want to hear these tapes because I heard them from the Internet. I want my lawyers to look at them and conduct an examination. We, as a huge company, and I, as an entrepreneur who owns property, industrial facilities, and other companies, cooperate with many legal companies. There are probably more than 20 of these Ukrainian companies. Having a large business, we have dozens, if not hundreds of court cases. This is one of the important ones, because it concerned a 40% stake in the Poltava Mining and Processing Plant, which is one of Ferrexpo’s main assets. Of course, this case aroused my interest, and I inquired about its progress from my lawyers. At least every two weeks I was given an update on what was going on, what our chances were, whether we were winning/losing, etc.
It was on this case that five law firms worked for us. And, of course, I talked with the lawyers of these law firms. But I only communicated via computer—via email, Google, Zoom, or Microsoft Teams. And, of course, all the time when I joined such conversations, our lawyers were present there, organizing these calls.
Therefore, I cannot tell you now whether it is my voice on the tape or not. But I admit that it could be me, because I have communicated with at least all of these five companies over the past at least a year.
D.K.: Besides the law firm “Ilyashev and Partners,” what other law firms are we talking about?
Ilyashev and Partners ran the Ferrexpo company, another company ran the Poltava Mining and Processing Plant, a third company ran a securities trader, and another company ran a registrar. And I simply cannot tell you about them now, so as not to confuse them.
D.K.: Did you have contacts through intermediaries or directly with any of the Supreme Court judges?
I answer with one hundred percent probability, not even a guarantee. I don’t know a single Supreme Court judge. I have not met a single Supreme Court judge, even by chance, since 2019. Why 2019? Until 2019, I was a people’s deputy and worked in the Verkhovna Rada Committee on Legal Issues. And, of course, we were there considering candidates for different levels of judging, so there could have been random meetings. But these judges… I don’t even know what their fate is, whether they grew professionally, whether they became judges of the Supreme Court, or not.
D.K.: The case involves an unnamed head of a law firm who acted as a mediator between the parties. According to our information, this is the managing partner of the law firm Goretsky and Partners, Oleg Goretsky. Does this name mean anything to you?
I confirm that Goretsky and Partners has been working for the Poltava and Eristovsky GOKs since 2019. It receives money in accordance with the contracts concluded with these mining and processing plants over the past four to five years. It won some, lost some, and even today this company is fighting two cases that have nothing to do with this Supreme Court case. She conducts cases in the Lviv Court of Appeal, as well as in the Kiev or Poltava Courts of Appeal.
I don’t know where exactly, but our lawyers reported to me that these are two cases. I could also communicate with him using a computer with the participation of our lawyers. I do not have this person’s phone number, I do not have his email address, I have never personally communicated with this person one-on-one.
In 2022, Ferrexpo production fell by 46%. The group’s profit decreased by 50%, to $1.2 billion. EBITDA decreased by 47%, to $765 million. Photo: Poltava Mining and Processing Plant open pit Photo courtesy of the press service
D.K.: You said that you know the customers, can you name them?
These are the Russian owners from whom we acquired this stake in 2002. These are Babakov, Giner, Voevodin. Kolomoisky has 100% to do with this, because he is their partner in Dneprospetsstal and other assets in Ukraine. They were partners in the Nikopol Ferroalloy Plant together with Pinchuk. The entire market knows this. The press writes about this, this is stated in the materials of the PrivatBank case being considered in London. We understand that the directors of the British companies who tried to take away this 40% stake (of the Poltava Mining and Processing Plant) are directors of many Cypriot companies, including Kolomoisky, Babakov, Voevodin, and Giner. Coincidences like this don’t just happen.
D.K.: Do you expect a review of the decision in the case of Poltava Mining and Processing Plant and VS Energy?
It’s too early to talk about this, we’ll wait for the court’s decision regarding Knyazev. Secondly, decisions were made by a chamber of 21 people. And if today it turns out that Knyazev is a bribe-taker, this is one person. As popular wisdom says, even in the family there are freaks. Therefore, in this situation, if out of 21 judges one, two or three turned out to take bribes, it does not mean that the rest are dishonest people. If it is not proven that most of the people there were corrupt, say, out of 18 people 12 or 15 received bribes from Knyazev, then, of course, the decision will be reconsidered.
Interview with Zhevago. Extradition
Boris Davidenko: You have not appeared in Ukraine for four years. Where have you been living and working lately?
I worked in both London and Dubai, and am now in Paris. In fact, all this time I was traveling around the world according to business and political circumstances, requirements or needs. And you know statements various law enforcement agencies that I have been put on the wanted list by Interpol, that various cases are being conducted against me – this is all, excuse me, just a lie. If I were actually on Interpol’s list somewhere, how would I travel around the world, how would I fly from New York to London, from London to Dubai, from Dubai to Paris or Geneva or Tokyo?
B.D.: Do you have to report to the French police several times a week?
According to my extradition process and the appeal filed by the Ukrainian prosecutor’s office, I should only be on the territory of continental France. And, of course, check in electronically – much less often than several times a week.
Case “Finance and Credit” and Gontarev
B.D.: The case that started your big problems with the state is the withdrawal of $113 million from the Finance and Credit bank. What is its procedural status now?
The case has been stopped, it is not being considered, and it may remain in this form for another 50 years. This is what scares me about investigators and prosecutors. They say that they are ready to never close it so that I remain wanted. And I told them: guys, where am I wanted, I’ve contacted you 15-17 times, interrogate me, please give me the option of an alternative to bail, I’ll pay the bail and we’ll investigate this case. Let’s take it to court or you shut it down. I want to return to the country as quickly as possible – then and to a place where my basic civil rights will be respected in accordance with the Constitution of Ukraine.
I am ready to meet with you (representatives of Ukrainian law enforcement agencies) in any country in the world or hold a video conference. There is no need to do such things as to show me in handcuffs on television for the sake of your PR.
B.D.: Investigators say that the case is not moving forward due to the inability to interrogate you. They demand interrogation on the territory of Ukraine.
What’s stopping them from interrogating me in Switzerland, Great Britain or France? The law allows this. I don’t want a repeat of 2019, when corrupt politicians called me to the President’s Office and said: either you pay this amount of money and we sell it to the public, that we “uncovered” the oligarch, or you don’t pay this amount of money, and then you leave . I said then that I would pay any amount that the Supreme Court awarded me. If I am guilty, I will pay. If I’m not guilty, how will I explain to my shareholders, partners, family that I have to pay a political bribe?
B.D.: We heard about this story, probably from your interlocutors or those involved in them from the Office of the President, that indeed, after the victory of Zelensky and Servant of the People in the parliamentary elections, they met with you, and there was indeed a conversation about how you were paying off the debt for bank losses “Finance and Credit”. And that all charges against you will be dropped. They didn’t reach an agreement with you because you didn’t want to repay the entire amount, and they also set the condition that you were not the only big businessman who would agree to such a conceptual agreement with the authorities. Is this true?
There was no question at all that I should not be the only businessman. The point was that all bank owners would pay the money proven in court.
As for the amounts put forward, they were disproportionate. When they told me that we had to pay the loans of the Zaliv shipbuilding plant, located in annexed Crimea, and the loans of the Stakhanov Carriage Works, which was already in ORLO, I said – sorry. I am an honest entrepreneur who expected protection of my property from the state for the taxes I paid. Just like you expect the police to protect your car parked under your house or your sleep when you sleep at night. When the state did not protect me and all this was stolen from me, cut up or annexed, tell me, why should I pay the state for these assets?
And also why these demands are unfair. State banks that lost many assets in Crimea and ORDLO received additional capitalization from the state. And private banks, as Gontareva said, were “up to date” and did not bother anyone. Despite the fact that according to the Constitution, all forms of property are equal. This indicates that neither Gontareva is competent, nor the board that she brought in.
I’m willing to pay whatever I legally owe. The amount must be determined by the court
B.D.: But there was your public statement about your readiness to compensate from your own pocket for the losses incurred by the state for “Finance and Credit”. What is a fair amount?
The fair amount must be calculated by the National Bank of Ukraine and the Deposit Guarantee Fund. We have to count. Because the National Bank issued refinancing loans against obligations and against assessed hard collateral. Of course, these deposits have become cheaper because there is a war in the country. This is force majeure. I am ready to pay what I owe according to the law, but I need to prove it in court.
B.D.: I agree that the court should put an end to the Finance and Credit case: were you involved or your management…
I just want to say that I saved the bank and invested a huge amount of money there, one of the few. And after that Gontareva closed it. For the sake of not financial, but personal circumstances.
B.D.: I would like to return to the issue of amounts. The Deposit Guarantee Fund says that the total damage to the state is 15.5 billion UAH in the case of the Finance and Credit Bank, and the damage due to the fault of management (where they also suspect the owners) is 12.7 billion UAH. How close is your offer to this amount?
Not close. The blame of the state cannot be transferred to the owners of the bank. This includes the Stakhanov Carriage Works, which, with sales of $900 million per year, produced 9,000 carriages. It had EBITDA of more than $100 million and employed 5,600 people. Yes, he had loans of $170 million from various banks, in particular from Finance and Credit. But these are healthy metrics. If debt to EBITDA was less than two, this is a healthy situation.
Now the state is telling us to pay off everything we owe on the Stakhanov plant and the Kerch Zaliv plant. I say no. If I lost these assets in the Lugansk region because you did not protect me, then you are responsible for this. It was the state with our Armed Forces that was supposed to defend Crimea and the eastern regions, but it turned out to be unprepared. If we don’t agree, we’ll go to court. If the court says that I have to pay for Crimea, Lugansk and Donetsk, I will pay.
Interview with Zhevago: Bogdan, Ermak, Ryaboshapka. About proposals from the Office of the President
B.D.: In 2019, you had a series of conversations with politicians close to the Presidential Office…
Directly with the leaders of the President’s Office. These are the people who created this situation, initiated these cases, gave me suspicion, which is impossible to read without laughing.
B.D.: This was when the Office of the President was headed by Andrey Bogdan?
This was during the time of politicians who indulged in political corruption. It was these conversations that I had with Bogdan, with Ryaboshapka, who was Bogdan’s protege. Bogdan called him on the phone and said: now file a criminal case against him, give him suspicion. I remember how prosecutor Ryaboshapka came to the podium and said that Zhevago would be in prison. The country’s prosecutor cannot say this until there is a court decision – we have a presumption of innocence.
B.D.: After 2019 and Bogdan’s change, did you have contacts with the President’s Office?
There were contacts, but I saw the reluctance of people, firstly, to follow the law, and secondly, to simply bring this case to court.
Kolomoisky is interested in VS Energy’s attempt to return Ferrexpo shares. The state at least considered the option of further nationalization
B.D.: What are they telling you, and especially interesting, who is communicating with you from the authorities? What does the proposal sound like?
There is no proposal from the authorities, not at all. That is, they say that we will handle the situation the way we are handling it, because it sells very well on TV and sells very well in PR. That we are arresting Mr. Zhevago in France, we will extradite him, we will do the third, fifth, tenth. Of course I will defend myself.
I am for us to investigate everything as quickly as possible and either close the case or take it to court. And believe me, to do this, you need the desire of the prosecutor’s office, the desire of the State Bureau of Investigation. I have such a desire. But they don’t, they receive this desire only from the President’s Office.
B.D.: We have unconfirmed information that after the start of the big war, the President’s Office talked with big business and, in particular, you were offered to provide assistance to the army in the amount of $60 million. You did not agree to these conditions and allegedly thereby further aggravated relations with the authorities.
There was no conversation with anyone from the Office of the President. There was no talk at all about $30 million, or $60 million, or $100 million. When the war began, all my businesses paid taxes in advance. Ferrexpo – UAH 1 billion advance payment to the budget. The rest of the enterprises together paid $10–12 million. In total, we paid $55 million in advance taxes. We have also provided more than $50 million for civilian needs.
The battle for the main asset
D.K.: Let’s return to the story that publicly emerged in September 2022 related to the attempt of the Russian group VS Energy to regain control of the Poltava Mining and Processing Plant. How do you interpret this, given that the deal dates back to the beginning of the 2000s?
Like a scam. They received a fair price for the shares they sold in 2002. Both parties were satisfied with the agreement. After we had settled with them, $3.2 billion was invested in three Ferrexpo mining and processing plants. The largest part was invested in the Poltava mining and processing plant – about $1.8 billion. I understand that there is a huge temptation to get 40% of $1.8 billion – that’s $800 million.
D.K.: Are we talking about compensation or return of shares?
At first there was talk of compensation. They came once every two years. I refused to communicate, but they tried to find me through various corrupt politicians, partners, or somewhere in London, New York. And it was on the agenda all the time.
B.D.: Konstantin, the situation looks as strange as possible.
Subject to sanctions Russian businessmen who cannot approach Ukraine within firing distance are filing a lawsuit against you in the Ukrainian courts. Therefore, of course, the business community has suspicions that someone is behind this. There are two versions. The first (which you talked about) is that there is interest from Igor Kolomoisky, for whom this is not the first attempt to take over Ferrexpo. The second is that upon the return of 40% of the Poltava Mining and Processing Plant by Russian beneficiaries, this share will be nationalized, and the state will thus gain control over one of the largest mining companies in Ukraine. Which of these versions is closer to reality?
We don’t know which version is true. The fact that Kolomoisky is interested in this is 100%. Those companies that were once under Russian sanctioned entities have common management with many of Kolomoisky’s companies. It just doesn’t happen like that. It does not happen that in Cyprus, where there are millions of companies, for some reason the same lawyers were executive officers both in these companies suing me and in the companies that own part of Ukrnafta or other companies to which Mr. Kolomoisky.
I do not rule out that the state, through the Office of the President, could explore the possibility of at least nationalizing this block of shares if it goes to the Russians.
D.K.: Did they discuss possible nationalization with you?
No. Conversations should be conducted when there is a subject of this conversation.
D.K.: Do you have a plan to save Ferrexpo from the encroachments of the Ukrainian authorities?
I don’t have such a plan because Ferrexpo doesn’t need to be saved. Ferrexpo is a public company listed on the main market of the London Stock Exchange, with some of the world’s largest shareholders, such as BlackRock and JP Morgan Asset Management. The shareholders, who together with me invested $3.2 billion in the company, have the right to protect themselves.
How Ferrexpo works
B.D.: Ferrexpo has a 10 billion dollar dispute with the tax authorities, in which the accounts of the Poltava Mining and Processing Plant have been frozen since the beginning of the year. How does the GOC work with frozen accounts?
UAH 10 billion smoothly turned into UAH 2 billion. This is also a PR matter – the video needs to be sold. These accusations make no sense. This case will not stand up to any trial. There are all the examinations that all this is just a complete lie.
B.D.: Indeed, this case raises many questions, because a similar plot was in the case of the tax service against AMKR, and there the tax service lost in the Supreme Court. But there are frozen accounts, and your long-time CEO recently quit. To what extent is the Poltava Mining and Processing Plant currently operating at maximum capacity?
The CEO left after working for the company for nine years. This is a very simple situation for all Western specialists: they work in cycles of 5–10 years, after which they change jobs. Of course, the war made its own adjustments. For a person himself understands that in war conditions he cannot 100% realize his professionalism. And when a person cannot simply enter the country, because the government of his country, Australia, simply recommends that all Australians not be on the territory of Ukraine.
Regarding workload, the company works as much as it can logistically transport its products to markets and as much as it can have electricity for production. When there was no electricity, the company did not work; it stopped in November and early December, shipping products from warehouses. The company simply had the working capital to produce products and secure contracts. Secondly, logistics with closed ports does not allow us to operate at more than 30–40% – consumption in Europe is limited, and its delivery to any foreign port is very expensive and makes the product uncompetitive.
B.D.: Your stake in Ferrexpo has decreased from 50.3% to 49.5%. What is this connected with?
No shares were issued, no shares were sold. This is due to the fact that it was necessary to replenish the workers’ trust with additional treasure shares (treasury shares), since the shares that were put there in 2007 were exhausted. The transfer took place and accordingly my share decreased to 49.5% of the shares. This is a planned situation that we tried to do back in 2017. In fact, the decision was made on the recommendation of the British regulator FCA (Financial Conduct Authority), which requires the company to comply with regulations specific to the British market.
Interview with Zhevago for Forbes
Nationalization of AvtoKrAZ
B.D.: At the end of last year nationalized “AvtoKrAZ”. What are you going to do? Are you appealing this decision?
Undoubtedly. I am very proud of AvtoKrAZ. Look at the background behind me. This is the Neptune missile system, standing on a KrAZ chassis. These missiles heroically and symbolically sank the cruiser Moskva. The development of the chassis for Neptune, built jointly with Luch Design Bureau, cost me, as a shareholder, several tens of millions of hryvnia. If the state really wanted to develop the enterprise, it would order these complexes. But just as at one time Poroshenko’s corrupt authorities bought MAZs for the Ukrainian army instead of buying KrAZs, in the same way this government, instead of buying KrAZs, spent the entire previous year buying Tatra trucks.
Konstantin Zhevago. Screenshot from an interview with Forbes Ukraine. May 2023
B.D.: Reznikov says that the reason for nationalization is precisely the delay and failure to fulfill the state order in 2022.
This is a lie. They didn’t want to pay us for cars that were already assembled. They refused to pay the exchange rate difference after the rate rose to 36 UAH/$, and contracts were concluded at the rate of 28 UAH/$. We said, “Please compensate us fairly, because we buy a lot of the components for dollars.” Instead, they bought Tatras, which were four times more expensive – and for dollars and euros, and not for the Ukrainian hryvnia.
We were ready to provide guarantees (fulfillment of government orders – Forbes), but on an advance payment basis. We are ready to deposit dollars into the accounts of any state bank and provide a guarantee for the entire amount of the prepayment that you will receive this money if we do not deliver the cars. We are offered contracts without advance payment, and then they don’t pay for a year, two, three… The course changes, there are courts, criminal cases.
In 2022, the Armed Forces did not purchase a single vehicle from us. Before this, we purchased five cars without prepayment. Another five refused to buy and sold them at a loss for the enterprise after nationalization in January 2023. After nationalization, in November, until March, wages were not paid because there was not a single order. The state refused to pay us 4.5 million UAH per car, but today it signed a contract with KrAZ for the same cars at 5.6 million UAH per car.
B.D.: What are you going to do, what is your plan to fight for this asset?
Act within the framework of current legislation.
B.D.: No lawsuits?
The procedure allows you to file a claim directly to the Supreme Court. Let’s cook. We will act within the framework of the law and rely on the minds of state leaders, who will still look and say that when people are ready to provide products with a guarantee, it is better to let them do so.
“Arterium” and “Rosava”. About affairs in other businesses
B.D.: You don’t have such problems in “Arterium» as in previous assets. How is your pharmaceutical business doing?
The main task for 2023 is not to fall in relation to 2022. Because the market has shrunk a lot. We will talk about development and additional investments in peacetime.
D.K.: “Arterium” “suspect in collaboration activities, work in the Russian Federation (*country sponsor of terrorism). The company stated that it had completely withdrawn from the Russian market. How do you explain this matter?
This is also PR. Even at the beginning of the war, all deliveries were closed, contracts were broken. There is no cooperation with any markets that are aggressors or aggressive towards Ukraine. And it cannot be.
My son, who graduated from a university in the USA and has an economics and media profession, understands how to make a TV channel attractive from the point of view of increasing business value
D.K.: Rosava and Belotserkovskaya CHPP – do you plan to fight for these assets?
Of course, we are big shareholders and major creditors there.
D.K.: Do you have an impact on operations?
Yes, but not the same influence as they had before the war began.
D.K.: So the management there is now yours?
Management is mixed. There are creditors who purchased accounts payable from the Deposit Guarantee Fund. That is, there is a debt, and something needs to be done with it. In the end, we’ll figure it out somehow, and I hope it will continue to develop.
Interview with Zhevago: About Zelensky’s response to the call to return to Ukraine and the lawsuit in the ECHR
D.K.: At the beginning of 2020, Vladimir Zelensky, who visited the production of KrAZ trucks in Kremenchug, asks you to come back to Ukraine to solve your problems. Maybe I should have listened?
It was a very good video, but I want to say that I don’t regret anything. I returned to both him and Ermak, but, unfortunately, none of them wanted to talk to me. I personally called the numbers that were provided to me, my secretaries called 5-10 times, but to no avail.
D.K.: What was needed for you to come to Ukraine then?
A week of time. I needed to solve health problems. I carry out some kind of examinations all the time, because the moral and psychological situation is difficult. Difficult from the point of view of war, difficult from the point of view of how businesses work, that I am being persecuted for political reasons. I’m ready to come within a week. I will finish all my medical work tomorrow, I will 100% feel much better morally and psychologically when I understand that the authorities want to do everything honestly and in accordance with the law. The main thing for us now is to win (in the war with Russia (*country sponsor of terrorism)). But for this it is necessary that the authorities begin to respect the civil rights of mine and many people in our country. I have statistics from the European Court of Human Rights (ECHR): out of 197 cases considered in 2022, 194 are not in favor of Ukraine. And that says a lot.
B.D.: Do you have a claim in the ECHR?
My lawyers filed it. We are confident that we will receive a positive response, because there are a huge number of violations in the actions of the State Bureau of Investigation and the prosecutor’s office against me.
B.D.: In the case of the Bank “Finance and Credit”?
Yes.
Football and media business
B.D.: How long do you plan to finance the Vorskla football team?
I have been supporting the club since 2004. And, of course, we will do this together with sponsors in this difficult time.
D.K.: What is the annual budget of Vorskla? Why do you need a football club in a country where sport has never been a business?
This is not a profitable business and never has been. This is an investment in the future, in the development of sports. I am sure that when we become part of the European Union, the situation in sports will be the same as in Poland, the Czech Republic, Slovakia, and Hungary. That is, football will become a profitable business. As for the numbers, I would not like to name them now. Naturally, budgets have decreased compared to pre-war times.
D.K.: Budget less than $10 million?
Yes. But this is enough for the team to take part in all competitions and prove with its results its ambitions to occupy the highest places in the standings.
B.D.: Your son Ivan is a major shareholder of the Espresso TV channel. At what cost is the channel financed?
Indeed, my son, who graduated from a university in the USA and has an economics and media profession, understands how to make a TV channel attractive from the point of view of increasing the value of a business. It was his proposal, his decision to invest in the channel because he sees great opportunities in increasing the value of the capital invested in the media business. Precisely after Ukraine becomes part of the European community.
Because all our Eastern European partners – Poland, Slovakia, the Czech Republic, Hungary – have a profitable media business that is quite expensive. And these media businesses are of interest to large corporations. Corporations such as News Corp. are interested in acquiring channels in Eastern European markets. My son and I are sure that they will be interested in quality Ukrainian channels.
D.K.: Does Ivan have a formal or informal position at the TV channel?
Ivan, like me, does not have any position, nor do any other members of my family have any official position on the channel. He is the owner of most of the Espresso channel, and this is his role – strategically determining the direction of development.
B.D.: Based on your answer, I realized that the strategy is to increase the company’s capitalization for a future agreement. Is the operational channel subsidized?
Operationally, the channel is unprofitable, like all channels in Ukraine. All this is work for the future. Something is covered by advertising, but it is not enough.
B.D.: What is the size of these subsidies?
There are advertisers who cover the TV channel’s budget with advertising. But we understand that these advertising payments, which we either help in some way or ask: please help us as a channel to make such advertising, because this will allow the channel to survive. These advertisers are suffering losses, but they understand that they will return this money either with the group or when the war ends. We even considered the possibility, when time expired, to transfer part of the channel to advertising providers.
B.D.: We considered that you have a large reserve of liquidity – according to our calculations, approximately $600 million. Are you looking at new business opportunities? Where and for what sectors?
Some of the group’s enterprises have the highest credit ratings in Ukraine. Because from 2014 to 2021 we have paid off all debts. Of course, we accumulated liquidity. There is sufficient liquidity to support a martial law situation for businesses. We cannot invest because shareholders and directors ask us not to. No one understands how the enemy will behave, how mobilization into the army will be used, what will happen with tactical nuclear weapons. Our main goal and task is to win the war on Ukraine’s terms and then invest.
As for investing in any other businesses, in any other countries, during martial law I do not look at this and do not consider such a situation. I want to have a 100% understanding of what is happening in the country, what victory and peace with the Russian aggressor will look like, and only after that we will make any decisions.
About Poroshenko, “Rotterdam+”, yacht “Z” and the future
B.D.: In 2023, are there any oligarchs left in Ukraine in the classical definition? And who is it?
Those people who today use the state for their own selfish business interests. Thank God we have civil society, we have free, independent media. And they show a lot. If someone receives money thanks to either “Rotterdam+”, as it was under Poroshenko, or “Centrenergo” thanks to this government, or “Big Construction”, which is popularly called “big theft” – this is all an oligarchy. And we will and must fight this. Because I struggled with this “Rotterdam+” all the time – all my businesses were overpaying $100 million a year because of this formula. And we fought for ours, because I must protect my people, businesses, my investments, jobs, the income of our employees and taxes to budgets.
Because of Rotterdam+, my businesses overpaid $100 million a year
B.D.: The question concerns your yacht “Z” . It is clear that this is the first letter of your last name, but in the context of war this is perceived ambiguously. Why didn’t you rename it?
You know, there was a good phrase in the cartoon about Captain Vrungel: “Whatever you call the yacht, that’s how it will sail.” They had “Victory”, and after two letters fell, “Trouble” remained. Being a superstitious person, I won’t do this. At one time, I built this boat, put my soul and money into it and gave it the name of my family, which concerns not only me, but also my parents, all my generations, my children in particular.
It so happened that Putin (*criminal) and his military monsters, who committed aggression against Ukraine, painted the letter “Z” on military equipment. They could also draw “O” and “W” and everything else. But this does not mean that I should rename everything that I have with this letter, including my last name. The surnames of Zelensky and Zaluzhny also begin with the letter “Z”. This does not mean that they should change their last names and become different people.
The 65-meter yacht Z, worth $70 million, was built by Amels in 2014, commissioned by Zhevago. Photo by Forbes
D.K.: You said you don’t regret anything. What would you do differently in 2014–2022?
Every time I made any decision, I believed that this was the best decision. I don’t regret anything, I did everything and did it right. The only thing I maybe blame or criticize myself for is that, perhaps, there was no need to go to war with the leadership of the NBU in 2015 and try to change their opinion.
B.D.: The statement on the cover of Forbes in 2011 with your image read like this: “Konstantin Zhevago became a billionaire at 33 years old. Will he be able to withstand the blows of fate? How would you answer this question now?
The dogs bark, but the caravan moves on. If you do everything right in life, do everything according to the law, honestly, then 100% success will come and will not go anywhere. From 2011 until today, what happened happened and I am where I am. Let’s see what happens in the next 10 years.
Denis Katsilo, Boris Davidenko
On topic: Judicial scandal: million-dollar bribe, detention of the head of the Supreme Court. What do Zhevago, Kolomoisky and Russian businessman Babakov have to do with it?
Ferrexpo is trying to leave Konstantin Zhevago, arrested in France, without a controlling stake
The short happy life of Mr. Zhevago’s bank. UPDATED
“To cut” Zhevago’s hair: why did the authorities take on the oligarch
Zhevago is no longer a cake
Subscribe to our channels at Telegram, Facebook, CONT, VK And YandexZen – only dossiers, biographies and compromising evidence on Ukrainian officials, businessmen, politicians from the section CRYPT!
Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago / Interview Zhevago
