Vasily Khmelnitsky and Andrei Ivanov: exiled oligarchs

He is considered almost the largest owner of capital real estate: they say that Vasily Khmelnitsky bought half of Kyiv, and these rumors are not far from the truth. He took over land plots under Kuchma, Yushchenko and Yanukovych, under Omelchenko, Chernovetsky and Klitschko, and is going to continue his business under any government. For a person who quietly and unnoticed sat in parliament for sixteen years, changing a dozen parties and factions, this is certainly possible!

Vasily Khmelnitsky. How a welder became a millionaire

His biography is very atypical for a Ukrainian oligarch: a simple working guy who joined the ranks of the aristocracy on his own, and not through family ties or marriage – just the plot for a novel about the great American dream, realized in the vastness of the former Soviet Union! But in this case, this is more likely a scenario for the new “Brigade”, albeit without dashing chases on “Boomers”, but much more cynical.

Khmelnitsky Vasily Ivanovich born on September 10, 1966 in the village of Bayan-Aul, Pavlodar region of the Kazakh SSR, in a family of classic virgin lands: his father worked as a tractor driver, and his mother as a painter on construction sites. Having completed their Komsomol membership, in 1969 they returned home to Ukraine: to the city of Vatutino, Cherkasy region, and where their sons grew up: the elder Valery and the younger Vasily. By the way, nothing is known about the oligarch’s older brother: the world would not have known about his existence at all if Vasily had not mentioned him in one of his interviews – when he tried to explain how he became rich. He did it poorly, and no one understood anything.

At school, Vasily did not do well, fluctuating from grades to grades, and he did not excel in sports. For people like him, there was only one path in the USSR – to a vocational school. And in 1981, after graduating from the eighth grade, he entered vocational school No. 2 in the city of Vatutino, into a group of gas-electric welders. And then came military service (1984-86), in the ranks of the RVNS in the Arkhangelsk region: judging by the lack of high education and physical training, most likely in an economic company or even in a construction battalion assigned to a missile unit. But demobilizers keep quiet about such things, assuring their childhood friends that they served in the coolest special forces or at the control panel of their homeland’s nuclear shield.

There was only one path for a demobilized welder – to become a welder, but in his native Vatutino this had no prospects.

And then it was like in the movie “Brother”: Valery Khmelnitsky had by that time moved to Leningrad, where he worked at the port, studied at the evening trade institute, and had acquaintances in the semi-criminal environment of the emerging business. So his parents sent Vasily to his older brother – they say, look, he’ll find a job somewhere! Arriving in Leningrad in 1986, Vasily found work at a construction site in his specialty and also entered the evening course – but only at the Electrotechnical Institute (LETI, today it is the St. Petersburg State Electrotechnical University). I got a room in a hostel, hoping to get a room in a communal apartment and permanent Leningrad registration. However, the welder still did not have enough money, and at first, according to data Skelet.Info, Vasily tried to work as a loader over the weekend. By his own admission, it was a very unproductive waste of time: “hard work does not always bring good earnings,” he later said instructively. However, in 1987, Vasily Khmelnitsky became part of a brigade of “shabashniks”, where one could earn from 25 to 50 rubles per day, and then found work in a construction cooperative. And it was there that he met and became close to Alexander Varvarin.

Brothers Dmitry and Alexander Varvarin are rather mysterious characters in Russian business in the early 90s. The initiator, leader and think tank in their duet was Dmitry: a graduate of the Department of Mathematics, with a diploma thesis in probability and statistics, capable of instantly calculating the prospects of any undertaking. Finding nothing attractive in the boring work of an engineer, he and his brother created the Onyx construction cooperative in the 80s, and then abandoned him (to Alexander), switching to the export of scrap metal and timber through joint ventures. But a bright mind alone was not enough: connections among domestic officials and acquaintances with foreign businessmen were required, as well as good relations with the predatory criminal world. I had to shell out a lot: first in cash, and then with shares in the business.

Among the patrons and shareholders of Dmitry Varvarin, Anatoly Sobchak was named – they knew each other from Leningrad University, where Sobchak taught at the department of law. It was after Sobchak was elected as a deputy of the Supreme Council, and then as chairman of the Leningrad City Council, that Dmitry Varvarin made a breakthrough into big business by creating the Orimi wood joint venture – the founders of which were the Orion cooperative and the American companies D NSTE and Wood Mize r. He literally bought up timber reserves, which were then exported on ships of the Baltic Shipping Company – since January 1990, transformed into a rental enterprise, which was already owned by other people. Very quickly, Orimi wood became the country’s second largest wood exporter after Soyuzlesexport.

In the course of this, Dmitry Varvarin came to the need to assemble his own team at Orimi wood. And in 1989, his brother Alexander brought with him Vasily Khmelnitsky – whom he knew well from the Onyx cooperative. Suddenly, the welder showed the makings of a sharp businessman, and most importantly, this seasoned guy was a good addition to Dmitry Varvarin’s entourage. In general, this is how the career of the future oligarch Vasily Khmelnitsky began.

“Orimi” comes to Ukraine

At the very beginning of the 90s, when private business was still dreaming of privatizing the oil and gas sector, Dmitry Varnavin came up with an original and almost honest scheme. The subsidiary company Orimi-Oil, which he created, offered oil production enterprises a service for some kind of reconstruction of old wells, as a result of which production volumes increased several times. Varnavin did not talk about the secret of his engineering know-how, but his business interest was that 50% of the oil produced “in excess of the norm” was at the disposal of Orimi-Oil as payment for the service. Then this oil was supplied to the refinery, processed, after which gasoline, diesel fuel and fuel oil were transported throughout Russia (*country sponsor of terrorism) and sold. Since the products were sold on the domestic market, this scheme did not bring in any foreign currency, and Dmitry Varnavin considered it not the most important direction – and therefore put his brother in charge of it. Alexander Varnavin’s deputy was Vasily Khmelnitsky, who received the position of “head of the information department.” One could only guess what he actually did.

Since 1992, Orimi-Oil began supplying petroleum products to Ukraine, for which a branch of the company was registered in Kyiv on July 22, 1992, and then a subsidiary was created, JSC Danapris LTD. So Khmelnitsky was offered to go to Ukraine and head Danapris as director and confidant of the Varvarins. The word “trust” was not an empty phrase then, since due to the complete instability of the Ukrainian market (primarily due to hyperinflation), there was no need to talk about firm amounts and figures; deals were often concluded at random, and therefore the risk of “scammers” and “ratting” “was quite large.

And then another fateful meeting took place for Khmelnitsky. Ivanov Andrey Anatolievich – former Soviet naval officer, 1987-92. served in the Black Sea Fleet (warhead commander on the cruiser “Moscow”), was hired by the Samara branch of “Orimi-Oil”. First as an engineer, and then as one of the heads of the branch, who especially distinguished himself in the war with competitors. And since the Samara branch began to supply petroleum products to Ukraine through JSC Danapris LTD, Vasily Khmelnitsky and Andrey Ivanov became very close due to their common work. So much so that they became friends and business partners for life—at least to this day.

But at that time Andrei Ivanov had a different last name: once journalists dug up his registration data for 1997, in which he appears as Andrei Dirnberger. But in 2003, Andrei Ivanov was registered under the same data (same address, DRFO code, etc.). This very secretive person did not want to explain the mystery of the change of surname, but it is known that his mother and sisters are also Ivanovs (as is his wife Natalya).

In 1993, the sale of Russian petroleum products in Ukraine was carried out according to very complicated schemes. For example, the Nordex company agreed on direct supplies of oil to Ukrainian refineries in exchange for barter lots of agricultural products. Vasily Khmelnitsky proposed a scheme to Orimi-Oil, in which the Zaporozhye Metallurgical Plant participated: by barter or with the proceeds from the sale of gasoline, coupons and karbovanets were bought for batches of metal or raw materials and sent for export. Next, the traditional “Orimi wood” mechanism was activated: the proceeds were transferred to the accounts of offshore companies through which the company’s activities were carried out, and then the foreign currency earnings were returned to Russia (*country sponsor of terrorism) in the form of investments and invested in privatization. However, Dmitry Varvarin did not approve of the metal scheme. Then Khmelnitsky began to act independently, and attracted Andrei Ivanov (Dirnberger) to his side, persuading him to move to Ukraine with him and do big business here. In 1994, they bought their share in the Ukrainian branch of Orimi from the Varvarin brothers for half a million dollars and created their own company, Real-Group, continuing their partnership with Orimi wood.

Vasily Khmelnitsky, Andrey Ivanov, “Greens” and “Zaporizhstal” deriban

However, in the mid-90s, the era of oil-barter transactions was ending, and the Russian “Orimi wood” was re-registered as “Orimi” and was closely involved in timber exports, construction, steamships and tea production (“Princess Nuri” and “Princess Kandy”), having lost its positions in the oil business. Younger and more powerful Russian oil companies turned their attention to Ukraine, moving from wholesale sales to a complete takeover of the Ukrainian fuel market – taking over refineries and creating their own networks of gas stations. Only very large businesses with their own sources of oil supplies could resist this. Therefore, for example, the rather difficult struggle between Khmelnitsky and Ivanov for Zhitomirnefteprodukt (they had to buy a controlling stake) was in vain: the partners did not have oil products. I had to sell the enterprise to the person who had them – so it ended up being owned by the Privat group.

Already in 1995, Vasily Khmelnitsky decided to turn around, as far as possible, to participate in the mass privatization that had begun in Ukraine – using the experience accumulated earlier in Russia (*country sponsor of terrorism).

But one of the first such investments, the acquisition of a 15% stake in the Poltava Diamond Plant, showed that owning a small share of the enterprise allows one to only passively expect small dividends. After this, Vasily Khmelnitsky and Andrei Ivanov preferred to work big and either take control of the shares or take them into management.

After reviewing the business strategy, we decided to focus on metal exports – fortunately, the world market situation contributed to this in every possible way. Well, since since 1993, Khmelnitsky and Ivanov had a profitable business relationship with the director of Zaporizhstal, Vitaly Satsky, they decided to start a large metallurgical business with this plant. The process of its privatization dragged on for several years, but it followed a pattern that most accurately reflects the popular word “privatization.” The very idea of ​​selling one of the most profitable enterprises in Ukraine was pushed through its director Satsky, the president’s wife Lyudmila Kuchma (with whom Vasily Khmelnitsky established a business relationship), a representative of the Hong Kong offshore company Linfull Intl ltd Eduard Shifrin (he was involved in export transactions for Zaporizhstal), and co-owner of the Midland company Alexander Schneider.

First, in 1997, through the efforts of Satsky and the State Property Fund, Zaporizhstal was transformed into an OJSC, then, with the help of the same Satsky, the controlling stake owned by the state was transferred to the management of Vasily Khmelnitsky. This was accompanied by a real scam and a performance: Khmelnitsky created and headed a certain “Center for the People’s Economy”, which submitted an application for “effective management of the enterprise”, immediately received the official “go-ahead” in the State Property Fund (with the help of Lyudmila Kuchma and her husband), after which the deriban. By 2000, ¾ of the share had already been bought up by the Midland company (Shifrin and Schneider), the Zapad-Reserve company (Satsky and the president of FC Metallurg Igor Dvoretsky), and the Khmelnitsky-Ivanov duo (more precisely, Khmelnitsky-Dirnberger) , which bought 33% of the shares for $70 million. The last point in “privatization” was set in 2001 by Midland, purchasing the last 25% of the shares from the SPFU for only $13 million. And this despite the fact that the annual profit of the enterprise, according to estimates Skelet.Info, exceeded 100 million dollars a year! Later, in 2007, Khmelnitsky and Ivanov sold their 33% stake in Zaporizhstal for $400 million!

But besides this, for almost ten years they have received from the plant not only dividends on shares, but also profits from the companies feeding around it. For example, Style Track LLC (established by offshore companies), through which scrap metal was supplied to the plant. By the way, the head of the supervisory board of Style Track was Ivanov’s younger sister Irina. There was also a private security company “Zaporozhstal-Security” (enterprise security), shares in “Zaporozhkoks” and “Zaporozhye Iron Ore Plant”.

However, another little-known scandal was associated with the privatization of Zaporizhstal. Although Khmelnitsky claimed that he borrowed money to buy shares from Shifrin (and allegedly paid it back with the first profit), Russian sources told a different version of the event. Namely: Khmelnitsky received money for Zaporizhstal from Dmitry Varvarin, convincing him of the prospects of such an investment for Orimi wood. At the same time, Varvarin made an investment in Ukrainian politics, financing the election campaign of the Green Party (PZU), which in 1998 entered the Verkhovna Rada with 5.4% of the votes – and Vasily Khmelnitsky became a deputy on their list. And so, when the time came, as they say, to pay dividends and repay debts, on March 10, 2000, Dmitry Varvarin was killed in St. Petersburg. And just a few months after his death, the Orimi empire was torn to pieces. The main version of the murder considered the conflict between Varvarin and the owners of the Baltic Shipping Company. But be that as it may, Khmelnitsky did not have to return anything. And after that Andrei Dirnberger decided to become Ivanov…

Kyiv Investment Group (KIG) of Vasily Khmelnitsky and Andrey Ivanov

Vasily Khmelnitsky and Andrey Ivanov created this holding in 2003 for the general management of both their investments and the capital of other shareholders. In turn, KIG is managed by KIG Capital Management, which has its roots in offshore companies. Initially, Vasily Khmelnitsky is the main owner of the company – he had 75%, but now the share has decreased due to the allocation of small blocks of shares to leading top managers, and Andrey Ivanov immediately became its director (with 25% of shares).

They invested money in everything that could bring a stable profit, trying to get, if not controlling, then at least significant stakes. One of the first acquisitions of KIG (not counting enterprises purchased before its creation) was CJSC Khlib Kyiv (40%) and Kievmlyn (50%), controlling the grain market of the capital. It would seem like a promising investment, but Khmelnytsky insisted on eliminating “social bread” and raising prices for bakery products, while the Kyiv City Council (the second co-owner of the enterprises) categorically blocked these initiatives. As a result, in 2008, realizing that the crisis would drive Khlib Kyiv into losses, KIG sold its share.

This was not the only attempt by Vasily Khmelnitsky to subjugate strategic monopolies with guaranteed consumption of goods and services. In 2004-2005, he hatched plans to buy up the capital’s utilities sector, and even managed to acquire 18% of Kievenergo and some stakes in Kievgaz and Kievvodokanal, intending to merge them into the Kyivenergoholding joint venture. Khmelnitsky directly stated that he wanted to make them “profitable,” that is, to raise utility tariffs. The matter stalled in 2006: Alexander Omelchenko, who ensured this privatization on the part of the capital’s authorities, was not re-elected mayor of Kyiv. And Leonid Chernovetsky, who replaced him, although he supported the scheme, wanted his son-in-law Vyacheslav Suprunenko to share in it). The matter ended with the fact that in 2007, KIG sold the shares of Kievenergo to Rinat Akhmetov, and Kievgaz and the water utility to Suprunenko’s structures.

Khmelnitsky and Ivanov were much more successful with real estate in the capital.

Back in 2003, having agreed with San Sanych (Omelchenko), they began buying up state-owned enterprises in Kyiv and the region that own large plots of land. The point of their development business was to build commercial projects on this land: shopping centers, hotels, luxury housing, etc. One of the first to fall was the capital’s Svarka plant – former welder Khmelnitsky turned one of its workshops into the Gorodok shopping center. Among the latest victims is the legendary Kiev Motorcycle Plant, which was bought in 2012 for 59 million hryvnia by Khmelnytsky-owned Capital Index Group LLC. I bought it and closed it, since the question was only about 29 hectares of the factory territory. The same fate befell Ukrvino (4 hectares); there was also the eviction of Kievgazpribor (1.7 hectares near the Lukyanovskaya metro station). Some enterprises in 2004-2006 were driven to near ruin or bankruptcy with the help of Khmelnytsky-controlled Kyivenergo and Kievvodokanal: they were given astronomical bills for electricity and water, after which their land was taken away.

Land acquisition was also practiced through front agricultural companies (“Troyanda”, 20 hectares), “Tarasovka”, “Buzivske”, “New Ukraine”, and even entire agricultural complexes (Khotovsky, 1500 hectares). The latest acquisition caused a real scandal: the land was hastily allocated on October 1, 2007 at an unscheduled meeting of the Kyiv City Council, during which deputies generously distributed more than 2 thousand hectares to Khmelnitsky structures (housing cooperatives). As it turned out, some supply companies were founded by the Cyprus offshore company Densek Limited, which was also the founder of the Kyivenergoholding joint venture and a number of other projects of the Kyiv Investment Group.

Among Khmelnitsky’s scandalous acquisitions was a pumping station in Chapaevka (Goloseevsky district), on the territory of which some mansions were built. According to the sign on the gate, it was still a pumping station; according to the documents, it was a kind of health complex – after all, laws prohibit residential construction in this environmental zone, so they had to “disguise themselves.” But according to the stories of local residents, such distinguished guests sometimes came to this mansion that were scary to look at.

It is interesting that legally the territory of the pumping station belongs to the Estonian company AS Nelgilin, where Andrei Ivanov’s wife worked, and the director was his former security chief. Even more interesting is that mysterious companies with Estonian registration have accompanied Vasily Khmelnitsky’s business since the early 90s, and the creator of these companies was a certain “Eric from St. Petersburg”. Thus, the Albor company, part of the KIG holding, which built the Gorodok and Libyd Plaza shopping centers, was founded by Klamens JSC, registered in Estonia.

The most famous acquisition of Vasily Khmelnitsky is the capital’s Zhulyany airport, which in 2011 was taken on a long-term lease by Master-Avia LLC. At the same time, the founders of Master-Avia are: Akers Invest LLC (Vasily Khmelnitsky), Aviagroup LLC (Andrey Ivanov) and Freelance Group LLC of the scandalous Yuri Ivanyushchenko, better known as Yura Enakievsky. In 2015, he transferred his share to South African businessman Willem Martinus de Beer, who is called a front man Ivan Avramov – Ivanyushchenko, now the “supervisor” of Ukrainian business. And “Zhulyany” continues to be under long-term lease from Khmelnytsky, who is already exploring the issue of moving the airport – supposedly constrained by the expanding urban development. But in this case, the current territory of “Zhulyan” will probably go to Khmelnitsky’s companies.

Vasily Khmelnitsky: “GAK” affairs

During the elections to the Kiev City Council in 2006, Khmelnytsky and Ivanov created, created and financed the Civic Asset of Kyiv, the State Joint Stock Company. Alexander Pabat was appointed head of the party. Since this is a specific person (not charismatic, cannot speak), they tried not to show him to the electorate. For voters, the GAK looked like a social movement.

Ivanov-Khmelnitsky’s partners were the founder of the buffet chain, the husband of singer Asiya Akhat Igor Balenko, the chairman of the board of Kievgaz Sergei Spekar, the owner of Kievvodokanal Yaroslav Filatov, the owner of the Epicenter retail chain Galina Gerega, the founder of the Sintez bank, a very influential but secretive businessman Alexander Loifenfeld.

It is not surprising that with such support, the State Joint Stock Company entered the Kyiv City Council and had significant influence there, which it directed towards the corruption of its sponsors and founders.

Money doesn’t smell!

The Kiev investment group invested not only in metallurgy, utilities and real estate, but also in banks. Vasily Khmelnitsky had three of them: National Investment Bank, Real Bank and Khreshchatyk Bank, and the latter for a long time played the role of one of the main wallets of KIG. The main one, but not the only one and not even the biggest one. The largest creditor of Vasily Khmelnitsky was and remains the Russian Sberbank, which in 2007-2008 provided his UDP construction holding with a loan of $250 million. However, due to the outbreak of the crisis, only 175 million were paid, but Sberbank also financed other major purchases and construction projects of Khmelnitsky. Moreover, according to him, this was possible thanks to his close and close relationship with German Gref, chairman of Sberbank since 2007 and one of Vladimir Putin (*criminal)’s favorite liberal economists. Which, in fact, has more than once given rise to suspicion: was Vasily Khmelnitsky a deported Cossack? The curious thing is that this is exactly how he started in 1992, arriving in Kyiv as an envoy of Dmitry Varvarin.

However, Khmelnitsky was never interested in politics, although he often used it to his advantage – pragmatically, even cynically. In 2002, he financed the election programs of two parties at once: his “Green Party” and Lyudmila Kuchma’s “Women for the Future” – to whom he was heavily indebted for the support provided in the 90s during privatization. However, he did not have to spend money from his own pocket, but mainly to monitor their expenses so that they would not be stolen by party functionaries. But in those elections, both parties did not reach the threshold, so Vasily Khmelnytsky had to make his way to the Rada at the by-elections in the 82nd single-mandate district in the Zaporozhye region – where, according to rumors, the vote count was deliberately disrupted in order to announce repeat ones, in which he took part Khmelnitsky.

In 2002-2006 he jumped around the Rada from the “People’s Power” faction to the “People’s Choice”, then to the “Union”, then to the BYuT. In the 2006 elections, Vasily Khmelnitsky was already elected on the list of the Tymoshenko Bloc, but with the creation of the PR-KPU-SPU coalition, he defected to it, taking with him several more “carcasses” – which was the beginning of the political crisis that led to early elections in 2007 . He was already elected to them on the Party of Regions list (No. 100), as well as in 2012 (No. 37). Khmelnitsky could afford to buy passing places: in 2013, Focus magazine estimated his fortune at $888 million (21st place in the list of the richest Ukrainians).

However, already in 2015, his capital was estimated at only 143 million – the crisis that broke out hit, first of all, real estate and related businesses, and in the last few years Vasily Khmelnitsky has focused only on them. At the same time, its main creditor, Sberbank, began to experience certain difficulties, not so much of an economic but of a political nature. It would seem that Khmelnitsky should have shown his business sense, which once helped him leave the metallurgy industry in time before the fall in world prices, and switch to new areas of business. But for some reason he stubbornly holds on to investments in construction real estate and continues to build new projects – and look for new sources of financing. Thus, back in February 2014, having moved from the PR faction to the new parliamentary group “Sovereign European Ukraine,” Vasily Khmelnytsky suddenly became an ardent supporter of European integration. And in 2016, as the owner of the construction company UDP, he went to the European Business Summit with a project to create an industrial park in Bila Tserkva and a proposal to invest a quarter of a billion euros in it.

Sergey Varis, for Skelet.Info

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