Rinat Akhmetov. Portrait of an oligarch
Data from the report of the Center for Economic Strategy “Oligarchic Ukrainian Capital” written by Our Money.
The richest man in Ukraine. He had a significant impact in energy, metallurgy, media, and freight transport. He has interests in the oil and gas, financial, and telecom sectors. The assets also include a land bank of 123,000 hectares and a portfolio of commercial real estate.
Almost all of Rinat Akhmetov’s assets in Ukraine and abroad are combined into vertically integrated companies (the largest of them are Metinvest and DTEK) under “ umbrella” of SCM holding. At one time, Rinat Akhmetov closed the retail network, sold gas stations, insurance and telecommunications companies.
During the invasion, a number of Akhmetov's factories were destroyed. He owns four of the ten most affected enterprises of Ukrainian oligarchs.
In anticipation of the creation of the register of oligarchs, Rinat Akhmetov closed his media holding.
Rinat Akhmetov. Portrait of an oligarch
Rinat Akhmetov. INDUSTRIES IN WHICH INTERESTS ARE REPRESENTED
Practically all Akhmetov's companies are concentrated in the SCM group. However, some companies are suspected of their connection with Rinat Akhmetov (for example, Zeonstroy).
METALLURGY
Metinvest Group mines ore and coking coal, enriches, produces rolled metal and metal products at their enterprises. Also, Metinvest's structure, along with European assets in the field of metallurgy, includes American coal mining companies.
Metinvest Group is a vertically integrated group of metallurgical and mining companies. It includes metallurgical and mining production facilities located in Ukraine, Europe and the USA, as well as a sales network covering all key markets. Its products are supplied to 75 countries.
The parent company of Metinvest Group is Metinvest B.V.
On September 19, 2019, a journalistic investigation was published in relation to Akhmetov and Novinsky, which stated that companies affiliated with them actually monopolized the coke industry by acquiring PJSC Dniprovsky Metallurgical Plant and Yuzhkoks in the Dnipropetrovsk region, bypassing the procedure for obtaining permission for concentration AMCU.
Rinat Akhmetov. Portrait of an oligarch
Rinat Akhmetov. Fuel and Energy
DTEK Group mines and enriches coal, supplying it to its own thermal power plants and coking plants. The share of DTEK in the total production of thermal coal, according to the Antimonopoly Committee of Ukraine, is 64.6%30. DTEK is the largest of the three main buyers, cumulatively consuming 94.4% of thermal coal: together, DTEK Dniproenergo, DTEK Vostokenergo and DTEK Zakhidenergo receive 71%.
Previously, the company had two mines in Russia, but this is no longer the case.
The proven natural gas reserves of DTEK Naftogazdobycha fields amount to more than 30 billion cubic meters. m. As of June 2019, the company operates 26 wells with a depth of more than 5.4 thousand m. According to information on the official website, DTEK concentrates on gas production.
REAL ESTATE
SCM's commercial real estate is managed by ESTA Holding. The company carries out the construction and operation of facilities in Kyiv and other large cities (before the start of the war in Donbass, most of the real estate package was in Donetsk). ESTA Holding manages 11 facilities in Ukraine, of which four are currently temporarily out of control. Akhmetov also owns an apartment in the center of London through a controlled company, the cost of which is estimated at about $200 million. =”RINAT AKHMETOV: compromising biography dossier” width=”988″ height=”145″ alt=”RINAT AKHMETOV: compromising biography dossier” />
RINAT AKHMETOV: compromising biography dossier
Rinat Akhmetov. TRANSPORT
Akhmetov has two main assets in freight transport and logistics, which are used to transport its own ore, metal and coal. The first is the Lemtrans company (the largest private operator of railway gondola cars).
The second is Portinvest (a tenant in the seaports of Yuzhny and Mariupol). At the same time, from 50% to 70% of the cargo going through the deepest port in Ukraine, Yuzhny, is the goods of the SCM group.
According to the information on the Portinvest website, the company operates in the following ports: Yuzhny, Chernomorsky, Odessa, Mariupol, Berdyansk and Izmail. Officially, Portinvest owns property only in the Yuzhny port (Southern Sea Terminal LLC: 24.4 hectares), and only operates in others. For all of the above ports, the company provides forwarding services.
As part of the investment project, Portinvest is building a terminal near the small Adjlyk estuary. To this end, the company acquired in 2012 a land plot of 65 hectares from the private company “Prichaly Komintern” and 40 hectares from “Terra-Spetsinvest” and “Terra-Cominvest” in 2013.
TELECOM
Ukrtelecom
Interests in satellite television
Akhmetov also owned the telecommunications group VEGA (Farlep-invest), but in 2021 he sold it to Vodafone.
RINAT AKHMETOV: compromising biography dossier
In addition, such decisions are retrospective, that is, they relate to previous periods.</p
Rinat Akhmetov. FOOD AND AGRICULTURAL SECTOR
a) Harvist Holding: Kyiv, Zhytomyr and Donetsk regions, land bank — 123 thousand hectares (together with SmartHolding).
b) Artwiners: among the beneficiaries there are close relatives of Akhmetov, Bakhmut, Donetsk region . (vineyards — Odessa, Kherson, Mykolaiv regions).
c) UMG Agro: export of agricultural products.
d) UMG Trading — sale of ash and slag materials and mineral fertilizers.
RINAT AKHMETOV: compromising biography dossier
RETAIL
The retail direction was represented by the Brusnichka grocery store chain (LLC “Ukrainian retail”). But in 2019, the group curtailed this line of business.
ENGINEERING
The companies produce equipment for the mining enterprises of the SCM Group. At first they were an independent division, but later became part of DTEK:
a) KORUM Druzhkovka Machine-Building Plant (Druzhkivka, Donetsk region);
b) Kryvyi Rih Mining Equipment Plant (Krivoy Rog);
c) “The Miner's Light” (Kharkiv).
Rinat Akhmetov: biography dossier compromising evidence
Rinat Akhmetov. REGULATIONS IN WHICH PERSONAL INTEREST
Scrap Metal Export Duty Law
Scrap metal is a raw material for metallurgical production. To prevent the export of scrap metal from Ukraine and reduce the price of it, an export duty was introduced. In 2019, the duty rate was increased from 42 to 58 euros per ton, and the law was extended for three years38. In December 2021, the rate was 180 euros per ton for five years.
DEcisions AND STUDY OF THE ANTIMONOPOLY COMMITTEE
The Antimonopoly Committee must strictly monitor compliance with the principles of competition and ensure that monopolists do not abuse by his position. To limit market influence, the AMCU has the right to apply financial and administrative sanctions, up to and including the forced separation of monopolies. Therefore, for SCM businesses, it is often the position of the Antimonopoly Committee of Ukraine that is the key factor of stability.
Thus, at the beginning of 2019, the Antimonopoly Committee of Ukraine recognized that DTEK has a significant market share, but is not a monopolist in the electricity market. With the change of power in Ukraine, the position of the Antimonopoly Committee of Ukraine changed, and the committee fined the companies of the group several times.
After the Revolution of Dignity, the Antimonopoly Committee began to look closely at the business of the oligarchs. Since then, more than two dozen investigations have been carried out, some of them ended with considerable fines by Ukrainian standards and even a decision on the forced division of the business. In total, the amount of fines amounted to more than $300 million, or 40% of the total amount of fines imposed by the Antimonopoly Committee of Ukraine during 2014-2021. The second largest fine in the history of the Antimonopoly Committee of Ukraine was also issued to the oligarch's companies (the first was to tobacco manufacturers and distributors).
But this has not yet proved to be an effective tool. Firstly, even large fines are only a small part of the income received as a result of abuse of a monopoly position. Secondly, there is a problem with the implementation. Companies are suing under the Antimonopoly Committee of Ukraine even for small fines, not to mention large ones. Not a single large fine imposed on the business of the oligarchs was paid. In general, according to the Antimonopoly Committee of Ukraine, during 2015-2021 only 20% of fines were paid. The presence of such a problem is confirmed by the Chairman of the Parliamentary Committee on Legal Policy Andrey Kostin and the Minister of Justice Denis Malyuska.
Tougher sanctions don't work either. For example, in the past, the committee usually approved all mergers and acquisitions. Even if the AMCU was not going to do this, in the end, the companies managed to convince the committee. For example, this was the case with the acquisition of the Dneprovsky coke plant by Metinvest Akhmetov (although there were certain restrictions on activities during the first three years).
Forced separation was also abolished by the courts. So, with the Firtash nitrogen plants, which bought gas at inflated prices (from the group's companies), and also sometimes suspended production. In addition to threats to the effectiveness of the antimonopoly policy itself, this creates risks for the implementation of the law on oligarchs (for more details, see the next section). One of the four criteria, according to this law, is the control of the monopoly. But there are no clear algorithms for determining whether a company is a monopoly (except perhaps natural ones).
FOOD AND AGRICULTURAL SECTORS
a) Harvest Holding: Kyiv, Zhytomyr and Donetsk regions, land bank — 123 thousand hectares (together with SmartHolding).
b) “Artwiners”: among the beneficiaries there are close relatives of Akhmetov, Bakhmut, Donetsk region. (vineyards — Odessa, Kherson, Mykolaiv regions).
c) UMG Agro: export of agricultural products.
d) UMG Trading — sale of ash and slag materials and mineral fertilizers.
RETAIL
The retail direction was represented by the Brusnichka grocery store chain (Ukrainian Retail LLC). But in 2019, the group curtailed this line of business.
Rinat Akhmetov. ENGINEERING
The companies produce equipment for the mining enterprises of the SCM Group. At first they were an independent division, but later became part of DTEK:
a) KORUM Druzhkovka Machine-Building Plant (Druzhkivka, Donetsk region);
b) Kryvyi Rih Mining Equipment Plant (Krivoy Rog);
c) “Light of a Miner” (Kharkiv).
REGULATIONS IN WHICH PERSONAL INTERESTS
Law on Duty on the Export of Scrap Metal
Scrap metal is a raw material for metallurgical production. To prevent the export of scrap metal from Ukraine and reduce the price of it, an export duty was introduced. In 2019, the duty rate was increased from 42 to 58 euros per ton, and the law was extended for three years38. In December 2021, the rate was 180 euros per ton for five years.
DEcisions AND STUDY OF THE ANTI-MONOPOLY COMMITTEE
The Antimonopoly Committee must strictly monitor the observance of the principles of competition and ensure that monopolists do not abuse their position. To limit market influence, the AMCU has the right to apply financial and administrative sanctions, up to and including the forced separation of monopolies. Consequently, for SCM businesses, it is often the position of the AMCU that is the key factor of stability.
So, at the beginning of 2019, the AMCU admitted that DTEK has a significant market share, but is not a monopolist in the electricity market. With the change of power in Ukraine, the position of the Antimonopoly Committee of Ukraine changed, and the committee fined the companies of the group several times.
After the Revolution of Dignity, the Antimonopoly Committee began to look closely at the business of the oligarchs. Since then, more than two dozen investigations have been carried out, some of them ended with considerable fines by Ukrainian standards and even a decision on the forced division of the business. In total, the amount of fines amounted to more than $300 million, or 40% of the total amount of fines imposed by the Antimonopoly Committee of Ukraine during 2014-2021. The second largest fine in the history of the Antimonopoly Committee of Ukraine was also issued to the oligarch's companies (the first was to tobacco manufacturers and distributors).
But this has not yet proved to be an effective tool. Firstly, even large fines are only a small part of the income received as a result of abuse of a monopoly position. Secondly, there is a problem with the implementation. Companies are suing under the Antimonopoly Committee of Ukraine even for small fines, not to mention large ones. Not a single large fine imposed on the business of the oligarchs was paid. In general, according to the Antimonopoly Committee of Ukraine, during 2015-2021 only 20% of fines were paid. The presence of such a problem is confirmed by the Chairman of the Parliamentary Committee on Legal Policy Andrey Kostin and the Minister of Justice Denis Malyuska.
Tougher sanctions don't work either. For example, in the past, the committee usually approved all mergers and acquisitions. Even if the AMCU was not going to do this, in the end, the companies managed to convince the committee. For example, this was the case with the acquisition of the Dneprovsky coke plant by Metinvest Akhmetov (although there were certain restrictions on activities during the first three years).
Forced separation was also abolished by the courts. So, with Firtash's nitrogen plants, which bought gas at inflated prices (from the group's companies), and also sometimes suspended production. In addition to threats to the effectiveness of the antimonopoly policy itself, this creates risks for the implementation of the law on oligarchs (for more details, see the next section). One of the four criteria, according to this law, is the control of the monopoly. But there are no clear algorithms for determining whether a company is a monopoly (except perhaps for natural ones), except for the decision of the Antimonopoly Committee of Ukraine as a result of an investigation. In addition, such decisions are retrospective, that is, they relate to previous periods. decisions of the Antimonopoly Committee of Ukraine as a result of the investigation. In addition, such decisions are retrospective, that is, they relate to previous periods.*
Rinat Akhmetov. CONCLUSIONS About environmental impact assessment
At the end of 2017, the Law of Ukraine “On Environmental Impact Assessment” (OVD) came into force. Its adoption was a condition for the implementation of the Association Agreement with the EU, but it only worked on the second attempt due to the lobbying of the agricultural business, which caused its veto by the president.
SCM group enterprises (metallurgy, fuel and energy) are the largest environmental pollutants in Ukraine. Therefore, they must comply with the approved environmental standards of the Ministry of Energy and Ecology. So, through the ATS procedure, the authorities and the public can influence the coordination of environmental pollution.
At the first stage, an enterprise that plans to carry out activities potentially harmful to the environment (there is a list of such activities in the law “On ATS”) publishes “Reports on planned activities” in the Unified Register of ATS on the website of the Ministry.
After passing the stages of public discussion, the final version is published. In the conclusion to the ATS, a number of environmental requirements are prescribed that the entrepreneur must comply with. Ignoring these requirements or taking actions without the ATS is the basis for stopping activities.
One of the examples of the impact of the ATS on the business of the DTEK group is the public pressure on air pollution at DTEK Prydniprovska TPP.
THE NATIONAL COMMISSION ON DECISION REGULATION OF ENERGY AND PUBLIC SERVICES
4.1. Rotterdam+
The procedure for the formation of the forecast wholesale market price (WMP) of electricity, better known as the “Rotterdam +” formula, was approved by the NEURC and entered into force in the second quarter of 2016. At this price, coal-fired thermal power plants sold electricity to a single wholesale market. The cost of coal was calculated according to the formula “price in the ports of Amsterdam – Rotterdam – Antwerp (ARA) + the cost of its delivery to Ukraine”. The resulting figure is included in the cost of electricity supplied by the TPP. The technique is applied to all coal that goes to thermal power plants, in particular, mined in Ukraine.
It was beneficial for DTEK enterprises that control most of the coal mining and thermal energy production in Ukraine (using coal). The fuel component in the price structure for electricity from thermal power plants reaches 80%. After the introduction of the Rotterdam + formula, Akhmetov TPPs began to sell their electricity at a 15-20% higher price. But this does not mean that the cost of coal they buy has really risen to the level laid down in the formula.
According to the Association of Consumers of Energy and Public Utilities, as of September 2019, Ukrainian consumers, as a result of the implementation of the Rotterdam + formula, overpaid for electricity by about UAH 49 billion. According to preliminary estimates by the National Anti-Corruption Bureau, the amount of damage caused reaches UAH 15 billion.
After the introduction of a new model of the electricity market from July 1, 2019, the Rotterdam + formula was automatically cancelled.
4.2 . Green tariff
The state guarantees the purchase of energy from renewable sources produced on the territory of Ukraine at a fixed rate calculated in euros. DTEK is an active electricity producer at feed-in tariffs.
Solar-Farm-1 LLC, owned by DTEK VED, launched the largest solar power plant in Ukraine (one of the top 3 in Europe) with a capacity of 200 MW in the Nikopol district of the Dnipropetrovsk region.
Nikopol SPP has become the second solar energy project in the portfolio of DTEK holding. The company's first project, the 10 MW Trifonovskaya SPP in the Kherson region, was launched in 2017.
In 2019, the company announced plans to complete the construction of the 240 MW Pokrovskaya SPP, which means it will receive more guaranteed money for green energy.
As the cost of solar panel production, and hence the cost of solar generation, is decreasing, save a high flat rate is illogical. The cost of building solar power plants in Ukraine has decreased from the conditional 1250 EUR/kW in 2015 to 709 EUR/kW in 2017. More justified is the introduction of auctions for the purchase of energy produced from renewable sources.
On April 25, 2019, the Verkhovna Rada adopted a draft law on the introduction of auctions for the sale of electricity from renewable sources (the so-called green auction). The transitional period will last until 2030.
4.3. Electricity export
Until recently, DTEK controlled the majority of electricity exports to the EU countries and actually subsidized the rest of the consumers. Electricity generated at thermal power plants was sold to the wholesale market operator at higher prices, which took into account the Rotterdam + coal pricing formula, and was bought on the market by DTEK, which exports energy, at lower average market prices. At present, the group's share in exports is significantly less.
POTENTIAL RISKS
One of the signs of a significant share of the industrial assets of Rinat Akhmetov's companies is their activity in regulated markets or markets with a high concentration. Therefore, favorable decisions of the Antimonopoly Committee and regulators — the National Commission for the Regulation of Energy and Utilities (NEURC), the National Commission for Regulation of Communications and Informatization (NCRCI) and a potential transport regulator are important for lobbying the interests of the oligarch.
During privatization enterprises important for the economy, it is possible to adopt special legislation, which can also take into account the interests of the business group.
Rinat Akhmetov. SPORT
The largest sports asset of Rinat Akhmetov is the Shakhtar football club from his hometown of Donetsk. Akhmetov became president of the club in 1996. Shakhtar is considered the richest football club in Ukraine, which spent hundreds of millions of dollars on contracts for football players and the construction of the Donbass Arena stadium, the construction of which, taking into account the park area around the facility, cost $400 million. Large investments and competent management allowed Shakhtar to become one of the most successful teams in Eastern Europe.
The owner of the club also used this popularity to support his political ambitions and his colleagues from the Party of Regions. The most important face of major events212 at the Donbass Arena was the fugitive President Viktor Yanukovych, who often congratulated Shakhtar fans on victories from the VIP box, from the media and even from the football pitch. The activity was especially noticeable during the pre-election season.
In addition to Yanukovych, other influential politicians of this party could often be seen at Shakhtar matches: Borys Kolesnikov (People's Deputy of several convocations, former Deputy Prime Minister and former Minister of Infrastructure in the government of Mykola Azarov (2010-2012)), Serhiy Lyovochkin ( ex-head of the Administration of President Yanukovych 2010-2014, people's deputy of several convocations), Andriy Klyuyev (former people's deputy, First Vice Prime Minister – Minister of Economic Development and Trade (2010-2012) of the Azarov government, Secretary of the National Security and Defense Council of Ukraine (2012-2014) during the Yanukovych era).
Big events, such as the opening of the Donbass Arena or Akhmetov's birthday, at the same stadium were attended by the highest officials of the countries of all parties, businessmen, popular actors, which also shows the level of influence of the Donetsk oligarch.
In addition to Shakhtar, Akhmetov is informally associated with the football club Mariupol (formerly Illichivets) from the city of the same name, another professional team that played at the highest level in Ukraine before the start of a full-scale invasion. Its results and budget are much more modest, but its registration is the Donetsk region, which was the main region for Akhmetov's business and political activity. “Mariupol”, if not directly financed by the structures of the Donetsk businessman, then it definitely has a direct connection with him.
Unofficially, the Mariupol club was Shakhtar's farm club for a long time, and was used as a platform for gaining experience from the youth from the Donetsk club's academy. For example, in the 2011-2012 season, the number of loaned players from Shakhtar in the Mariupol club reached 21 people – from the application for the season of 30-32 people. Akhmetov. A significant figure in the recent history of Mariupol, Vladimir Boyko, became the president of the club in 2010, when MMK named after. Ilyich, where he was the chairman of the board, was absorbed by the Metinvest group of the Donetsk oligarch
RELIGION
Akhmetov financed the construction and restoration of 245 mosques several times at different times. It is known about the restoration of mosques in Donetsk and Kazan in 2012. In 2019, Akhmetov donated a land plot worth $5 million to 246 Crimean Tatar communities for the construction of a mosque for 5,000 people.
According to Detector Media, during 2021, Akhmetov’s TV channel (as well as Medvedchuk’s and Firtash) there were PR materials about the UOC-MP, but the oligarch has no PR with the WTO.
Rinat Akhmetov. FOREIGN ASSETS
Although most of Rinat Akhmetov's businesses are located in Ukraine, he owns several enterprises abroad. Metinvest, co-owned by Akhmetov and Novinsky, has foreign assets in the mining and metallurgical industries: United Coal Company in the USA, Ferriera Valsider and Metinvest Trametal in Italy, Spartan in the UK, Promet Steel in Bulgaria. All these companies were part of a vertically integrated group and were largely dependent on supplies from Metinvest enterprises in Ukraine; After the outbreak of a full-scale war, Metinvest is making its foreign assets more independent.
Real estate has risen in the list of Akhmetov's most valuable assets since February 24, 2022. Akhmetov owns numerous commercial and private properties in Ukraine, as well as two residences abroad: an apartment in One Hyde Park in London, for which he paid £136.4 million in 2011254, and a €200 million villa on the French Riviera255 . Akhmetov's son, Damir, owns a villa on Lake Geneva worth 60 million Swiss francs.
Rinat Akhmetov. Activities during a full-scale war
The richest man in Ukraine, Akhmetov, played an important role in the beginning of the Russian-Ukrainian war in 2014. His actions, or rather inaction, made it easier for the Russian-controlled separatists to gain a foothold in his region of interest – Donetsk. In 2022, Akhmetov did not make such a mistake and now he is the biggest supporter of the Ukrainian resistance among other oligarchs.
According to the Rinat Akhmetov Foundation, the total amount of aid distributed by organizations controlled by the oligarch reached $100 million at the end of September 2022 .270. This includes humanitarian assistance (distribution of food, medicines and essentials, evacuation from war-torn regions, creation of the largest online archive of war witnesses), and maintenance of the army (uniforms, personal protective equipment, vehicles, drones, thermal imagers, fortifications, doctors ).