Data from the report of the Center for Economic Strategy “Oligarchic Ukrainian Capital” reported by Our Money.
The youngest of the richest people in Ukraine. He has interests in metallurgy, the pharmaceutical industry, transport and energy. The largest assets are Ferrexpo and Arterium. He was a deputy of the III-VIII convocations from the Batkivshchyna party and a self-nominated candidate in the majoritarian district. Until 2015, he owned the Finance and Credit Bank, which is now in a state of liquidation.
Zhevago and his business. Reference: INDUSTRIES REPRESENTED OF INTERESTS
Konstantin Zhevago is a shareholder and CEO of Ferrexpo. She owns a number of assets in Ukraine, in particular, the Poltava, Yeristov and Belanovsky mining and processing plants. She also has a mining license in the Galishchansky mountain field and an exploration license in five more mountain fields. In addition, Ferrexpo owns its own transport and processing facilities, which means it is vertically integrated.
Ferexpo shares are traded on the London Stock Exchange. In addition to assets in Ukraine, it has representative offices in a number of other countries, in particular in Britain, Switzerland, Japan, and China.
The Ukrainian pharmaceutical market is characterized by a large share of imports. Of the local manufacturers, the largest are Farmak, Darnitsa, SPC Borshchahovsky KhPZ, Arterium, KVN and Sanofi, and the largest in terms of drug sales are Farmak (Ukraine), Arterium (Ukraine), Teva ( Israel), Darnitsa (Ukraine) and Sanofi (France).
Konstantin Zhevago owns the Arterium Corporation, established in 2005. It includes the Kyivmedpreparat and Galichpharm enterprises. This company is the second in terms of profit in Ukraine in the industry. The corporation has offices in many CIS countries and is export-oriented.
A 49.9% stake in TIS-RUDA LLC is owned by Poltava GOK, which is part of the Ferrexpo group Konstantin Zhevago. “TIS-RUDA” is engaged in the transport processing of goods, namely, they own a terminal for transshipment of pellets. In addition, Ferrexpo has 150 barges and 2,252 railcars.
Zhevago and his business. Reference: ENERGY
Konstantin Zhevago owns the Belotserkovskaya CHPP. Journalistic investigations show that companies associated with Zhevago have repeatedly won tenders for servicing the Belotserkovskaya CHPP, in particular, converting it to burning solid coal.
Konstantin Zhevago owns the company PrJSC AvtoKrAZ. It also includes KrAZ Foreign Trade Company, KrAZ Leasing LLC, Poltava Automotive Plant, Kherson Cardan Shaft Plant, Kamenetz-Podolsk Automotive Plant, Tokmak Forging and Stamping Plant, Simferopol Autoradiator Plant (located in the occupied territory). According to OpenDataBot, at the end of July 2019, a bankruptcy case was initiated at PJSC AvtoKrAZ. According to YouControl, AvtoKrAZ is unprofitable.
In addition, Zhevago owns the Stakhanov Carriage Works, but is located in occupied territory.
Zhevago and his business. Reference: REGULATIONS IN WHICH PERSONAL INTEREST
TARIFFS FOR STATE CAR RENTAL
Renting state-owned wagons is cheaper than renting private ones. Therefore, companies that want to transport their goods prefer state-owned wagons. But the number of such cars is limited, so the demand is greater than the supply. The report of the Ukrainian Institute for the Future claims that therefore there are certain shadow tariffs – an additional surcharge for the transportation of goods, which goes beyond the box office. According to the Ukrainian Institute for the Future, Ferrexpo is one of the main beneficiaries of this scheme.
ISC in AMK
In 2015, Poltava GOK, owned by Konstantin Zhevago, filed a lawsuit that the Ostchem group, owned by Dmitry Firtash, is a monopoly. The consideration of this case ended on September 3, 2019, when the Antimonopoly Committee of Ukraine admitted that Firtash had abused his monopoly position in the fertilizer market and fined him UAH 107 million. and forced to divide Ostchem in terms of nitrogenous mineral fertilizers.
In 2013, the AvtoKrAZ company, owned by Konstantin Zhevago, signed an agreement with the Ministry of Defense in the amount of UAH 136.5 million, which stipulated that the company would supply trucks for the Ministry of Defense. According to a study by the Independent Anti-Corruption Committee, the level of closeness of the state defense order is 90%, while in other countries it is 10-20%. Despite the fact that Konstantin Zhevago promised in his election program to restore the defense order system, he did not vote for the relevant law (an inappropriate meeting did not come).
Zhevago and his business. Help: IMPORT OF MEDICAL DEVICES
Zhevago companies that control the production of syringes initiated an anti-dumping investigation by the Interdepartmental Commission on International Trade on the import of syringes from other countries. The investigation has been going on for almost two years, since November 2017, and so far it has been useless.
AFFORDABLE DRUG PROGRAM
In 2017, the government launched the Affordable Medicines program. Under this program, Ukrainians with cardiovascular diseases, type II diabetes and bronchial asthma and who have a prescription from a doctor can receive certain medications for free or with a partial surcharge. At the same time, the state reimburses the cost of only a cheap drug for each category of drugs. If the patient wants to get a more expensive drug, he can pay the difference. As of 2019, the register of medicines, the cost of which is fully compensated by the state, includes 14 medicines manufactured by the Kievmedpreparat enterprise, owned by Zhevago.
REGISTRATION OF DRUGS
The procedure for registration (re-registration) of medicines is approved by a resolution of the Cabinet of Ministers. The current version of the resolution provides that registration is carried out by the Ministry of Health based on the results of an examination by the State Expert Center of the Ministry of Health.
Konstantin Zhevago or companies related to him are (or were recently) involved in several court cases. Such cases can be conditionally divided into those related to Finance and Credit Bank (in liquidation) and those related to AvtoKrAZ (in bankruptcy).
Zhevago and his business. Reference: COURTS IN FINANCE AND CREDIT BANK
As noted above, the Finance and Credit Bank is now in a state of liquidation. The bank's liquidators filed a number of lawsuits against other companies associated with Zhevago, such as Belotserkovsky CHPP, FC Vorskla. In addition, the police are investigating the case of the absence of guarantee agreements at the Finance and Credit Bank where the guarantors were Poltava GOK, Yeristovsky GOK and other companies controlled by Zhevago.
COURTS FOR LENDING “AVTOKRAZ”</h3
Litigations between AvtoKrAZ and Sberbank have been going on for several years. In July 2019, the Court of Appeal dismissed AvtoKrAZ's complaint and confirmed that it must repay a debt of UAH 899 million due to the sale of its shares for the corresponding amount at auction.
In addition to Sberbank, other companies also have claims against AvtoKrAZ, and many of them also have Konstantin Zhevago as the owner (for example, AvtoKraz Trading House LLC, Galichfarm PJSC, etc.).
Claims against AvtoKrAZ were also made by the liquidators of some banks to which AvtoKrAZ had debts: Delta-Bank, Finance and Credit (previously owned by Zhevago), Ukrexim, Prominvestbank.
Separate judicial The case of AvtoKrAZ is a lawsuit filed by the Ministry of Defense. In 2013, AvtoKrAZ and the Ministry of Defense signed a contract for the supply of trucks. Due to the appreciation of the dollar, the amount of the contract increased, but the Prosecutor General's Office considers the increase in the amount unlawful.
In addition, AvtoKrAZ is accused of delaying the delivery of trucks. In 2015, the court ruled in favor of the Ministry of Defense and ordered AvtoKrAZ to pay UAH 6.69 million. This has not happened yet, therefore, since November 2018, the police have been investigating these non-payments.
Zhevago and his business: POTENTIAL RISKS
Given the structure of Zhevago’s business interests, his the following regulatory preferences may be of interest:
- Minimization of duties on the import of equipment for own production – medicines and (subject to the continuation of the activities of AvtoKrAZ) cars.
- Continuing the practice of hiding the maximum part of information regarding the defense order and preventing foreign manufacturers of equipment from it.
- Introduction into the legislation on public procurement of norms that allow discriminating against foreign manufacturers of medicines and medical devices in favor of domestic ones.
- Liberalization of the railway transportation market in such a way that vertically integrated companies like Ferrexpo have preferences over other shippers for transportation with their own rolling stock.
Zhevago is a sponsor of the honorary president of the FC “Vorskla” from Poltava since 2004. The most important assets of the oligarch are also located in the Poltava region.
Zhevago was elected for 6 terms in a row as a people's deputy in majoritarian districts, including due to his influence on the electorate because of football.
Thanks to these investments, Vorskla consistently performs in the Ukrainian championship at an “above average” level and regularly participates in European cups.
Also, Zhevago's enterprise Poltava GOK financed Gornyak-Sport, a small team from the second most powerful Ukrainian championship.
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Konstantina Zhevago, the former owner of the Finance and Credit bank, is wanted by the Economic Security Bureau of Ukraine. He was seen in Monaco in August 2022 enjoying a summer vacation on his yacht called Z. Ferrexpo, 51% owned by Zhevago, provided $12.5 million. humanitarian fund.
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