Why the state is nationalizing the assets of the Russian VS Energy group

VS Energy of Russians supporting aggression against Ukraine owns five regional power companies, shares in metallurgical enterprises and a number of hotels. These assets will be seized as state revenue. BusinessCensor learned the details of nationalization.

The Ministry of Justice is completing preparations for a claim to the Supreme Anti-Corruption Court to recover assets of the Russian VS Energy group for state benefit.

The claim was prepared on the basis of materials and evidence developed by the Security Service of Ukraine.

In Ukraine, VS Energy owns five regional power companies, which distributed 10% of electricity before the war, shares in two large metallurgical enterprises, as well as shopping malls and a number of hotels in Kyiv, Dnepr, Lvov and Odessa.

Since the real beneficiaries formally have no connection to VS Energy, the Ministry of Justice filed its claim against the nominal owners in whose name these assets are registered.

The ultimate beneficiaries of VS Energy are the Russian “thief in law” nicknamed “Misha Luzhnetsky” Mikhail Voevodin and his junior partners – Russian State Duma deputy Alexander Babakov, who supports armed aggression against Ukraine, and member of the Russian State Duma Committee on International Affairs and owner of the CSKA football club Giner.

Ukrainian sanctions against Babakov were introduced in September 2022, and against Voevodin and Giner in October of the same year. However, this did not provide grounds for the nationalization of the enterprises, since their Ukrainian assets were formally registered to nominal owners – EU citizens acting in the interests of the Russians.

Among these “nominees,” in particular, are German citizen Marina Yaroslavskaya (common-law wife of Yevgeny Giner), Latvian citizens Valts Vigants, Dambins Villis, and Altberts Arturs (Babakov’s trusted persons), and German Oleg Sizerman.

Also, the nominal holder of shares in key assets is Voevodin’s ex-wife, Natalia Selivanova, who owns them in his favor.

Since the real beneficiaries of VS Energy are hiding behind “nominals”, then on May 12, President Volodymyr Zelenskyy will be against them imposed sanctions.

Sanctions allow the nationalization of VS Energy assets to begin.

Accordingly, after the Ministry of Justice files a claim with the HACC, the court will review it and decide on the application of a sanction in the form of recovery of VS Energy assets for the benefit of the state.

The Cabinet of Ministers will then decide on the property manager. Most likely, it will be the State Property Fund, which will re-register the property as state property and, in the future, these assets should be put up for privatization.

At the same time, the strategic energy enterprises VS Energy – Chernivtsi, Kirovograd, Rivne, Zhitomir and Khersonoblenergo will be transferred to the management of the Ministry of Energy.

On what basis is Ukraine nationalizing VS Energy assets?

BusinessCensor learned some details of the case from law enforcement agencies.

Since 2014, after the start of the armed aggression of the Russian Federation (*country sponsor of terrorism) against Ukraine, the beneficiaries of VS Energy Voevodin and his junior partners, the deputy of the State Duma of the Russian Federation (*country sponsor of terrorism) Babakov and the member of the State Duma Committee on International Affairs Giner, re-registered Ukrainian assets to fictitious persons – citizens of Latvia Vigantas Valts, Altbergs Art, citizens of Germany Oleg Sizerman and Marina Yaroslavskaya

In particular, they became the nominal owners of the WorldWide Holding Group company from the Seychelles, which indirectly, through a number of offshore companies, owns the Ukrainian companies VS Energy International Ukraine LLC and VS Group Management LLC, which owns shares in Ukrainian regional power companies.

Ownership structure of regional power companies VS Energy

The World Wide Holding Group, which the Russian owners registered as nominees, 100% owns two Cypriot companies, Mavisko Ltd. and Delorenius Ltd.

Each of these two companies holds 50% of the authorized Latvian capital of VS Energy Latvia.

In turn, VS Energy Latvia owns 87.4% of VS Energy International NV (Netherlands) and 100% of the Swiss Urbanic Holdings SA (which owns another 12.6% of the Dutch VS Energy).

The company VS Energy International NV is the key legal entity in the group, which directly or through other structures holds shares in Ukrainian regional power companies.

In particular, the Dutch VS Energy International NV directly owns VS Energy International Ukraine LLC, and also, through two other Dutch companies – Silk Road Trading and Washington Holdings – owns VS Group Management LLC.

The latter holds shares in five Ukrainian regional power companies: 99.99% of the shares of Khersonoblenergo, 98.7% of Chernovtsioblenergo, 21.25% of Kirovogradoblenergo, 9.91% of Rivneoblenergo (another 83.3% is owned through Silk Road Trading and Washington Holdings), 19.98% of Zhitoproizvoditelenergo.

The Dutch VS Energy International NV directly owns 75.5% of the shares of Zhitoproizvodlenergo and 51.6% of Kirovogradoblenergo.

VS Group Management LLC also owns 79.4% of Sevastopolenergo Energy Company JSC and a branch of Sevastopolenergo Energy Company JSC.

Another 12.7% of Sevastopolenergo is registered to VS Energy International NV (one of the key companies of VS Energy).

After Russia (*country sponsor of terrorism) gained control of Crimea, Sevastopolenergo, in accordance with the requirements of Ukrainian legislation, registered itself in the territory controlled by the Ukrainian government.

In Crimea, the group registered a similar enterprise under Russian law at the address of Sevastopolenergo – Sevastopolenergo LLC and a branch of PAO EK Sevastopolenergo, headed by persons associated with VS Energy.

In 2022, Sevastopolenergo LLC began supplying electricity to the Main Directorate of the Federal Service of the National Guard Troops of the Russian Federation (*country sponsor of terrorism) for the Republic of Crimea and the city of Sevastopol.

“The fact of selling electricity to units of the Russian Ministry of Defense is classified as actions committed with the aim of causing significant harm to Ukraine’s national security, sovereignty and territorial integrity,” law enforcement officials explain.

It was also proven that Russian State Duma deputy Babakov, who supports aggression against Ukraine, Giner and Voevodin owned Ukrainian assets through nominees, including the latter’s ex-wife.

Thus, this provides grounds for applying sanctions against the nominal owners of VS Energy assets by collecting Ukrainian assets for the benefit of the state, in particular, shares of the regional power company, the metallurgical enterprise Dneprospetsstal and hotels, including the Premier Palace.

Let us recall that earlier Ukraine nationalized PIN Bank, which belonged to Giner.

Assets VS Energy

The Ukrainian assets of the Russian business group VS Energy of Voevodin, Babakov and Giner can be divided into three groups:

• Energy assets;
• Metallurgical enterprises;
• Hotel Business. Assets VS Energy that may be nationalized

Asset / Share of VS Energy (%)

• LLC “VS Energy International Ukraine” 100
• OOO VS Group Management 100
• JSC Chernivtsyoblenergo 98.7
• PJSC “Kirovogradoblenergo” 72.9
• PJSC “Rivnooblenergo” 93.2
• PJSC “Zhytomyroblenergo” 95.5
• PJSC “Khersonoblenergo” 99.9
• JSC “Energy Company Sevastopolenergo” 92
• JSC “Krivoy Rog Iron Ore Plant” 49.9
• PJSC “Dneprospetsstal” 47.1
• PJSC Hotel “Premier Palace” 86.47
• OOO “Eastern European Hotel Company” 100
• PJSC TGK “Dnister” 99.9OO GC “Yunost” 100

Energy assets

In the energy sector of Ukraine, VS Energy owns five regional power companies: Kirovograd, Chernivtsi, Zhitomir, Rivne and Khersonoblenergo.

This is the third largest regional power company in Ukraine in terms of electricity distribution volumes; before the war, they distributed about 10% of the electricity in the country.

In 2019, Rinat Akhmetov’s DTEK acquired two regional power companies, Kyivoblenergo and Odesaoblenergo, from the Russian VS Energy.

In 2021, an agreement was reached between them on Akhmetov’s further purchase of other regional power companies from VS Energy.

In particular, Voevodin planned to concentrate Babakov and Giner’s shares in the regional power company and resell them to DTEK.

The first regional power company to be absorbed by DTEK was Kirovogradoblenergo. In April 2021, DTEK published a statement about the acquisition of 24.5% of Kirovogradoblenergo shares from Russians, and also announced its intention to acquire a controlling stake in this distribution system operator after approval by the Antimonopoly Committee.

According to data MonopolistDTEK agreed with VS Energy on the full buyout of shares of the regional power company for $80 million.

However, the AMCU did not give permission for the concentration, probably because Akhmetov’s DTEK was already the largest owner regional power companies in Ukraine – in 2021, 42% of electricity in Ukraine was supplied by the networks of Akhmetov’s DTEK Networks OSR.

In order to circumvent the AMCU ban on the concentration of regional power companies, according to BusinessCensor sources, the option of issuing a $700 million loan secured by regional power company shares was considered.

However, the agreement was prevented from being completed by the full-scale Russian invasion of Ukraine, which led to the start of the nationalization of VS Energy assets in Ukraine.

Metallurgical enterprises

In the metallurgical sector, VS Energy owns shares in two enterprises: 47.1% of shares in the producer of special steel grades Dneprospetsstal and 49.9% in the Kryvyi Rih Iron Ore Plant.

PJSC “Electrometallurgical Plant “Dneprospetsstal” named after A.M. Kuzmin” is located in Zaporozhye and is the only manufacturer in Ukraine of rolled products and forgings from special grades of steel: stainless, tool, high-speed, bearing, structural, as well as heat-resistant nickel alloys.

Previously, the EastOne group of oligarch Viktor Pinchuk was a co-owner of the plant, but in May 2008 it sold its shares of Dneprospetsstal to VS Energy.

Currently, the largest owner of the enterprise is the Cypriot Wenox Holding, which holds 47.1% of the metallurgical plant’s shares.

Wenox Holding is 100% owned by Luxembourg Financiere Egine Holdings, the nominal owner of 83.9% of this offshore company is Voevodin’s ex-wife, a citizen of France and the Russian Federation (*country sponsor of terrorism), Natalia Selivanova. That is, 39.57% of Dneprospetsstal is indirectly registered to her.

Its “partners” in Financiere Egine Holdings are Latvians Dambins Villis and Vigants Valts (the latter is the nominal owner of 7.53% of DSS shares).

They act in the interests of another co-owner of VS Energy – Babakov.

The partners of the Russians from VS Energy in Dneprospetsstal are the owner of FC Dynamo and Igor Kolomoisky’s partner in 1+1, Igor Surkis, who owns 13.6% of Dneprospetsstal.

Another 6.8% of the metallurgical enterprise is registered to Oksana Marchenko, the wife of the traitor of Ukraine, Viktor Medvedchuk.

Despite the fact that Selivanova is Voevodin’s ex-wife (they divorced in December 2004), she continues to act in his interests. This is evidenced by their joint ownership of the Cypriot company Newsteel Holdings Ltd. (registered to the nominee Michalakis Tsitsikkos, but Voevodin and Selivanova each own 50% of the company).

Newsteel Holdings Ltd., in turn, is the owner of a Nevis-based company, Kadis Holdings Ltd.

At the same time, Kadis Holdings Ltd. owns 50% of the Cypriot Starmill Ltd, which owns the Krivoy Rog Iron Ore Plant (KZhRK).

That is, Voevodin and Selivanova own 50% of the Krivoy Rog Iron Ore Plant. The other half of the enterprise belongs to the Cypriot SCM Rinat Akhmetov.

Krivoy Rog Iron Ore Plant specializes in underground mining of iron ore with an iron content of 56-63.5% for the production of sinter and blast furnace ore with an iron content of 46-50% for the production of cast iron.

Until recently, it was believed that Akhmetov’s partner in KZhRK was the beneficiary of the Privat group, Igor Kolomoisky. However, as BusinessCensor learned, Kolomoisky sold his stake in KZhRK to Voevodin.

The share in KZhRK could have been Kolomoisky’s payment for offshore companies trying to cancel the sale of 40% of the shares of Poltava Mining and Processing Plant to Konstantin Zhevago.

ABOUT involvement Kolomoisky, in particular, and Zhevago personally stated that they were involved in these companies.

In 2002, four companies from the VS Energy group – Gilson Investments, Calefort Developments, Emsworth Assets and Trimcroft Service – sold 40.19% of the shares of Poltava Mining and Processing Plant to Zhevago’s structures.

Following this, several additional share issues and other series of resales were carried out, as a result of which the mining company Ferrexpo Zhevago became the sole shareholder of YUGOK.

In 2005, offshore companies VS Energy tried to challenge the deal, but the Supreme Court then sided with Zhevago.

In 2022, offshore companies stepped up their attempts to return 40% of PGOK through the courts.

The case reached the Supreme Court, which rejected the offshore companies’ claims. In particular, in April 2023, the Grand Chamber of the Supreme Court abolished the decree Northern Appellate Economic Court on invalidating the 2002 agreement on the purchase and sale of 40.19% of the shares of the Poltava Mining and Processing Plant Ferrexpo.

It is in this case that the former head of the Supreme Court, Vsevolod Knyazev, and his colleagues are suspected of receiving a $2.7 million bribe, who, in exchange for this money, are supposed to ensure a decision on the Poltava Mining and Processing Plant.

Hotel business

The VS Energy hotel business is registered to the Luxembourg company Financiere Egine Holdings.

As stated earlier, almost 84% of this company belongs to Voevodin’s ex-wife, Selivanova. Another 16% is registered to Latvian Dambins Villis, acting on behalf of Russian State Duma deputy Babakov.

Through the Cypriot Pumori Enterprises (which is 100% owned by Financiere Egine Holdings), Voevodin and Babakov own the following hotels in Ukraine: Premier Palace, Rus, Lybid, Slavutich, Dnister in Lviv, Premier Hotel Odessa, and Premier Compass Hotel Oleksandriya in Alexandria.

In December 2022, the Pechersky District Court of Kyiv seized the VS Energy hotels and shopping mall. The judge granted the Prosecutor General’s Office’s motion in part, prohibiting the alienation of the property. At the same time, she did not prohibit the owners from using this property.

Financiere Egine Holdings Voevodin and Babakov are associated with Russian companies. Due to a number of structures, until the end of 2019 they owned Moscow-based Termopol LLC, which, through another Termopol TD LLC, is the executor of the defense order and has been supplying products to the Federal Penitentiary Service since April 2022.

35% of Termopol LLC belongs to Evgeny Giner and two “nominees” – Sergey Markin and Ilya Margiev.

Yuri Vinnichuk, translation Skeleton.Info

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