Zhevago has problems because of the bank
More and more problems arise for Konstantin Zhevago, one of the greatest Ukrainian oligarchs, who is now awaiting an extradition hearing in France after his arrest, writes Kyiv Post.
On Monday, January 30, the Kyiv Economic Court began considering the fraud case of oligarch Konstantin Zhevago, allegedly involved in the theft of depositors’ funds in the amount of 46 billion hryvnias ($1.23 billion).
Zhevago is the fifth richest man in Ukraine according to Forbes. As of December 2022, he was worth $1.4 billion, down $2.1 billion from a year earlier.
The Kyiv Post investigation revealed the most likely embezzlement scheme of recent decades, corruption in state regulators and trade with Russia during the war, which Mr. Zhevago, a mining magnate and former member of the Ukrainian parliament, has always denied.
Zhevago has problems because of the bank
Business vacuum cleaner / Zhevago has problems because of the bank
In January 2015, nine months before the collapse of the main financial asset of Konstantin Zhevago, a Ukrainian soldier nicknamed Santik (Kyiv Post knows his real name, but does not disclose it for security reasons) tried to get the body of an electricity killed by a booby trap in the front-line village of Marinka , a few kilometers from Russian-occupied Donetsk.
The explosion of the mine turned the body lying under the electrical pole into an unrecognizable piece of flesh. These booby traps were often tailor-made to kill civilians trying to repair damaged power lines.
“It’s an anti-electric mine,” Santik says, looking around the explosion site.
This Ukrainian military man was born and raised in Donetsk, after 2014 he lost his business because of infidels and started a new life and career from scratch.
The bank to which he entrusted his money was called Finance and Credit and was owned by Konstantin Zhevago, a Ukrainian tycoon who claimed he had never had a joint business with the Russians.
Soldier “Santik”, one of the depositors of the destroyed Bank “Finance and Credit”.
The bank was on the verge of collapse, and most of the money belonging to thousands of its depositors, including Santik, was about to disappear from the accounts due to massive fraud, which was already known to the National Bank of Ukraine (NBU) – the regulatory body in charge of state of the banking system of Ukraine.
In the same month, in January 2015, the NBU Board classified Finance and Credit Bank as problematic. A number of restrictions were imposed on him, including the requirement to stop active transactions with insiders and persons associated with the bank.
However, the bank continued these operations despite the regulator’s ban.
From February to October 2015, he provided loans to Zhevago-affiliated companies.
Zhevago has problems because of the bank
Among the enterprises involved in this scheme were several companies that supplied tires, fuel and other goods necessary for conducting military operations to Russia and Belarus dependent on it.
This bank collapsed a year and a half after the first wave of the Russian invasion in 2014.
Now Santik, like thousands of other investors of this financial institution, are seeking their money back.
“Zhevago’s business is like a vacuum cleaner. He sucked money out of savers to lend to his own businesses. When the bank was gone, he initiated a new scam and began to “vacuum” the co-owners of his other big business – Ferrexpo”, says Maxim Garus, who represents one of the groups of investors who lost money in the Finance and Credit case.
Out of paper
“We have never seen such a complex case”, – the representative of the Ukrainian Deposit Guarantee Fund addressed the judge at the court session this Monday, January 30.
“The court does not have enough funds to print all the evidence you provided“, – said the judge, – “This is 7 thousand pages. Can you print them for us?
“It would cost half a million hryvnia. Is it enough if we print only the essentials?“?
Konstantin Zhevago, the protagonist of this drama, could not be present in the courtroom. He was detained in the French ski resort of Courchevel in December 2022 on the basis of an international warrant issued by Ukraine. The issue of Zhevago’s extradition to Ukraine will be decided at a court hearing in France on February 2.
Investors and lawyers filled the small hall of the Kyiv Economic Court during the consideration of a massive fraud case that led to the loss of 46 billion hryvnia by depositors. Halls where the tycoon in exilion Konstantin Zhevago should be present.
“He asks to be granted refugee status and asylum in Europe,” said Natalya Pushina, Mr. Zhevago’s lawyer.“He worries about his safety.”
Among the depositors who lost money in the Zhevago bank is the businessman Igor Maksimovich, who worked with Zhevago and his companies.
“He swore to God that he would give me back the money. And after half a year his bank burst“, – says Maksimovich.
Personal relationships based on promises and loans to affiliated companies were part of the business model of Finance and Credit Bank, which collapsed in late 2015 in the midst of the financial crisis in Ukraine following the first phase of the Russian invasion.
The likely embezzlement scheme that led to the bankruptcy of Zhevago Bank is one of the largest in the history of Ukraine.
An investigation by the Kyiv Post found that the regulator had not carried out statutory inspections of Zhevago Bank since the early 2000s.
Already on the verge of collapse, according to the documents of the Supreme Administrative Court of Ukraine, the bank did not follow elementary procedures, in particular, did not monitor operations for possible money laundering and terrorist financing.
Trade with Russia. Zhevago has problems because of the bank
“Our companies have not been doing business with the Russian Federation for more than ten years”, Zhevago said on February 24, 2022. “Leading companies and I personally are under Russian sanctions.”
But the Kyiv Post investigation revealed dozens of transactions between companies from the Zhevago business group and the Russian Federation.
So, since November 2018, the businessman has been under Russian sanctions, as well as two companies belonging to him – AvtoKrAZ and Ferrexpo, which includes the Poltava, Bilanovsky and Yeristovsky mining and processing plants (GOK).
According to the State Customs Service obtained by KyivPost, the latest cooperation between AvtoKrAZ and Russian partners dates back to May 18, 2018.
The Zhevago company exported trucks worth UAH 15 million.
In November 2022, AvtoKrAZ was nationalized.
And Zhevago’s Poltava GOK continued to import Russian goods even into 2022. One of the last such operations was dated February 14, 2022, just ten days before the full-scale invasion of the Russian Federation.
The plant purchased metal products from the Russian RTS-Polymer Engineering.
Since 2017, Poltava GOK has been collaborating with 12 companies from the Russian Federation.
Interestingly, the enterprise is the subject of a dispute between Ferrexpo and VS Energy, which is associated with Russian entrepreneurs and politicians Alexander Babakov and Evgeny Giner.
Both are on the list of individuals sanctioned by Ukraine and are the beneficiaries of several troubled Ukrainian businesses linked to organized crime groups, as previously reported by KyivPost.
Another enterprise of Zhevago, Rosava, engaged in the production of tires, also cooperated with the Russians.
In 2017, two Russian companies purchased goods from this Ukrainian company. These were Torgliga and Rostselmash Combine Plant.
The most active business Zhevago cooperated with the Russians in the field of pharmaceuticals. The Kyivmedpreparat company has been supplying medicines and other medical products since 2018.
And Galichpharm sold medicines to Russia and Belarus, and the last official shipment of medicines there took place in January 2022.
From 2017 to 2020, Zhevago Arterium Corporation conducted financial transactions with Russia and Belarus.
On December 8, 2022, Arterium reported that as of February 24, they had already “completely exited the Russian and Belarusian markets, terminated all relations with Russian and Belarusian counterparties and do not carry out any activities on the territory of these countries, either directly or indirectly” .
Goods that can still be sold in these countries are “leftovers sold before the war,” according to the company.
According to the Kyiv Post, the volume of export-import operations of Zhevago companies from the Russian Federation in 2017-2022 exceeded UAH 7.5 billion.
The Kyiv Post sent a request for comment to the press service of Zhevago with a request to provide details of the commercial activities of companies affiliated from Zhevago.
At the time of this article’s publication, they have not given any response.
At the same time, when Zhevago’s wife and daughter were posing for fashion event in Paris, Santik, a client of his bankrupt bank nicknamed, was looking for a drone bought by volunteers and lost on the front line.
The Zhevago family in Paris this January, Ukrayinska Pravda
“The drone costs UAH 1.5 million ($41 thousand), I just couldn’t lose it. Therefore, I planned this operation as a chess player plans to play in a tournament. And I found it after walking 50 kilometers in the gray zone. I’m not the Zhevago type. I do not lose what is entrusted to me“.
Alexey Bobrovnikov, Marina Shashkova, translation Skeleton.Info