Nine billionaires among Ukraine's 30 richest men

by Zenon Zawada
Kyiv Press Bureau

KYIV - Ukraine now boasts nine billionaires, all having prospered from the nation's vast natural resources and the industrial might inherited from the Soviet Union, according to a newly released survey of Ukraine's 30 wealthiest men.

Among them, 17 conduct their business in the industrial east, while none are based in western Ukraine, as determined by the financial analysts at Dragon Capital investment bank and editors of KP Media, who published their report in the July 1 issue of Korrespondent magazine.

"If more than half of the wealthy in neighboring Russia scraped together their fortune exporting natural resources, mainly natural gas and oil, then most well-off Ukrainians made their millions producing steel and cast iron," reported Korrespondent magazine, Ukraine's leading news weekly, which is published by American Jed Sunden in the Russian language.

The rich have gotten richer in Ukraine thanks to the Orange Revolution - an event that increased the attractiveness of their properties, assets and stocks among Western investors and capitalists, Korrespondent reported.

One of the top beneficiaries of this newfound luster is one of the Orange Revolution's enemies, Rynat Akhmetov, 39, whose wealth has multiplied to an estimated $11.8 billion.

He remains the biggest financier of the Party of the Regions, which he represents in Ukraine's Parliament as a national deputy.

Known as Ukraine's steel king, Mr. Akhmetov also has enormous investments in the auto-making, energy, communications and finance industries, Korrespondent reported.

His holding company, System Capital Management (SCM), has become so large that it has recently undergone major restructuring in order to more effectively maintain control of its assets.

In the process, Mr. Akhmetov created Ukraine's first vertically integrated firm, the holding company Metinvest, which mines raw materials and smelts them into metal and steel products. It has become Mr. Akhmetov's most profitable enterprise, Korrespondent reported.

He has also created holding companies for his vast energy business, Donbas Fuel-Energy Co., which controls 15 percent of the energy market, as well as his growing insurance and financial empire, SCM-Finance.

Mr. Akhmetov also owns the Donetsk Shakhtar soccer club, which defeated archrival Dynamo Kyiv for Ukraine's championship this year.

An ethnic Tatar, Mr. Akhmetov is married with two sons. His relations with Crimea's Tatars is strained, however, because they support the Our Ukraine bloc and oppose pro-Russian political parties.

The remaining three of Ukraine's four wealthiest people are Dnipropetrovsk businessmen who are active in the city's Jewish community.

Ukraine's second wealthiest man is media king Viktor Pinchuk, 45, who became the son-in-law of former President Leonid Kuchma in 2002 when he married his daughter, Elena Franchuk. His wealth is now estimated at $3.7 billion.

He began his investment activity even before the Soviet Union's collapse, when he founded Interpipe in Dnipropetrovsk in 1990. Besides trading metal, he imported Turkmen and Russian natural gas, Korrespondent reported.

Profit from those activities enabled him to purchase the Nizhnedniprovskyi Tube-Rolling Plant, the Nikopol Ferroalloy Plant and the Novomoskovskyi Tube-Rolling Plant, among others.

Mr. Pinchuk's industrial empire enabled him to build a media empire within Ukraine, which now includes three national television networks, ICTV, STB and Novyi Kanal.

Mr. Pinchuk is known as an avid art collector, creating a three-floor museum of contemporary art in Kyiv's Mandarin Plaza, Korrespondent reported.

He is also financing a documentary on the Holocaust in Ukraine, based on survivor's testimonies recorded in the digital archives of the Shoah Foundation for Visual History and Education established by Steven Spielberg in 1994.

Mr. Pinchuk has two daughters.

Another Dnipropetrovsk businessman, Ihor Kolomoiskyi, 42, is Ukraine's third wealthiest person, also prospering from city's industrial inheritance from its Soviet past.

He acquired metallurgical, ferroalloy, ore mining and processing plants, also creating for himself a monopoly on Ukraine's manganese ore, Korrespondent reported.

Vast industrial holdings enabled Mr. Kolomoiskyi to join other Dnipropetrovsk businessmen in launching Ukraine's largest bank, Pryvat, enabling his wealth to grow to an estimated $2.8 billion.

While piecing together his industrial and financial empire, Mr. Kolomoiskyi has fiercely competed with Mr. Pinchuk, as well as the Donetsk business clans.

Though not known to sponsor any political parties, Mr. Kolomoyskyi is known to have some level of relations with Yulia Tymoshenko, also a Dnipropetrovsk native.

Mr. Kolomoiskyi is married with two children.

Dnipropetrovsk fuel trader and metallurgical industrialist Henadii Boholiubov has amassed a $2.4 billion fortune, ranking him fourth on Korrespondent's top 30 list.

Mr. Boholiubov is a Pryvat Group partner.

Ukraine's fifth wealthiest person, Kostiantyn Zhevago, 32, was born in a Siberian village near Magadan.

By the time he was 19 years old, he was already the financial director of Kyiv-based Finances and Credit bank, becoming its administration chair three years later in 1996.

Mr. Zhevago rose quickly in business as a result of contacts he established among Kyiv's wealthy oligarchs during the 1990s, Korrespondent reported.

While studying at the Kyiv Institute of the National Economy, Mr. Zhevago befriended Serhii Cherep, the son of Valerii Cherep, the director of UkrAgroStoy and Transportation Minister at the time.

During this time, he also established contact with Kyiv millionaires Viktor Medvedchuk and Hryhorii Surkis, as well as the notorious fugitive Ihor Bakai.

Mr. Zhevago acquired his wealth, currently estimated at $1.9 billion, through investments in Poltava mining, truck-manufacturing and pharmaceutical businesses, Korrespondent reported.

Despite his checkered past, which includes allegations of bribing judges, stealing businesses and driving officials to suicide, Ms. Tymoshenko allowed him to represent the Tymoshenko Bloc as a national deputy.

Though not among Ukraine's wealthiest people, President Viktor Yushchenko has a few allies who made the top 30.

Ukrainian chocolate king Petro Poroshenko, 40, has built a fortune worth $505 million, according to Korrespondent magazine, ranking him 15th on its list.

Unlike most others on the list, Mr. Poroshenko, 40, is clear about how he made his first million.

As an international relations student at Shevchenko State University in Kyiv, Mr. Poroshenko and three other students offered consulting work for external economic activity, for which he received 1.2 million rubles, Korrespondent reported.

He served as assistant general director of the Respublika Union of Small Businesses and Entrepreneurs between 1990 and 1991.

In 1993 he founded the enterprise that would make him rich, Ukrprominvest, a holding company for his Roshen confectionery industry, as well as his automobile and auto parts manufacturing businesses.

He managed to achieve virtually exclusive control of sugar production, as well as to invest in Lutsk and Cherkasy factories, Korrespondent reported.

Like Mr. Zhevago, Mr. Poroshenko had close ties to the Kyiv-based Medvedchuk-Surkis oligarch clan until breaking away in 2001 to team up with Mr. Yushchenko and his Our Ukraine bloc.

He launched the television network 5 Kanal (Channel 5) based on a commitment of giving its reporters freedom to determine editorial policy.

It became among the few media to report the 2004 presidential elections and Orange Revolution without bias.

Mr. Poroshenko is among Mr. Yushchenko's closest confidantes and played a central role in the president's decision in September 2005 to dismiss the Cabinet of Ministers.

Ms. Tymoshenko described her conflict with Mr. Poroshenko as the last straw that prompted Mr. Yushchenko to fire his government.

Previously serving as secretary of the National Security and Defense Council under President Yushchenko, Mr. Poroshenko is the parliamentary coalition's likely nominee for Verkhovna Rada chair.

Born in the town of Bolhrad in the Odesa Oblast, his ethnicity unconfirmed, Mr. Poroshenko is married with four children.

Of Ukraine's top 30 wealthiest, four are national deputies from the Yulia Tymoshenko Bloc, two are from the Party of the Regions and two represent Our Ukraine in the country's Parliament.

Mr. Yushchenko's other multi-millionaire ally is 50-year-old Fedir Shpyh, whose wealth is ranked 25th, estimated at $305 million.

At the time of the Soviet Union's collapse, Mr. Shpyh was managing the finances of the Kyiv Oblast's Komsomol organization, Korrespondent reported. In 1991 its finances were transferred into Inko Bank, where Mr. Shpyh just happened to be the managers.

In several years, Inko evolved into Ukraine's second-largest bank, Bank Aval, which Mr. Shpyh and his partners sold to Germany's Raiffeisen Bank for about $1 billion last year.

He recently launched Prestyzh Bank, which is targeted at handling the financial assets of Ukraine's elite.

A native of the village of Kobyzhcha in the Chernihiv Oblast, Mr. Shpyh is married with one son. He teamed up with Our Ukraine only in recent years, having been a member of the One Ukraine parliamentary faction prior to the 2006 elections.

He even built a modern soccer stadium for his village, outfitted with an automatic lawn-sprinkling system, running tracks, lockers and parking.

There's at least one Ukrainian patriot among Ukraine's wealthiest. Ranked 24th, Oleksander Slobodian's shares in the Obolon beverage behemoth are estimated at $315 million.

Mr. Slobodian, 50, began working in the beverage factory in 1980 as an engineer, climbing the ladder to become general director in 1993.

Not only a savvy businessman, Mr. Slobodian himself invented the recipe for Zhyvchyk, the popular soda pop, Korrespondent reported.

A national deputy of the Ukrainian People's Party in the last parliamentary session, Mr. Slobodian provided significant funding for the Kostenko-Pliusch Ukrainian People's Bloc, which finished in eighth place during the 2006 parliamentary campaign.

Born in Ternopil, Mr. Slobodian is married with a daughter and two sons.

Another noteworthy figure among Ukraine's wealthiest is Henadii Vasyliev, 52, the pro-Russian politician who has attacked the Ukrainian American diaspora in campaign literature for his Derzhava political party.

Mr. Vasyliev, a Donetsk native who worked for 10 years as a district prosecutor, built his $345 million fortune acquiring metallurgical plants and coal mines, Korrespondent reported.

Billionaire Dmytro Firtash, 40, is ranked eighth, owning assets of $1.4 billion.

Mr. Firtash is the biggest partner in RosUkrEnergo, the shady intermediary firm that purchases natural gas from the Russian Federation and Turkmenistan, and resells it to Ukraine.

He is believed to have close ties with international mobster Semion Mogilevich, a fugitive currently wanted by the U.S. Federal Bureau of Investigations for racketeering, securities fraud, mail fraud, wire fraud and money laundering.

A link between Mr. Firtash and First Lady of Ukraine Kateryna Yushchenko was alleged by Svoboda, the weekly newspaper published by the Tymoshenko Bloc.

Mr. Firtash allegedly provided the air transportation to Mrs. Yushchenko's relatives so that they could fly to Kyiv from the U.S. and witness the president's inauguration.

No women are among Ukraine's 30 wealthiest people, Korrespondent reported.

Copyright © The Ukrainian Weekly, July 9, 2006, No. 28, Vol. LXXIV

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