Anti-Monopoly Committee of Ukraine on March 30 completed a five-year investigation into collusion by fuel companies associated with oligarch Ihor Kolomoisky and imposed a $170 million fine on them.
The investigation revealed that a network of 1,625 gas stations — a quarter of all the stations in Ukraine — set the same prices at the same time over the last five years, creating a monopoly, AMCU reported.
“Today we recap the result of gigantic work and many years of legal confrontation between the committee and the conspiracy participants on the Ukrainian fuel market,” said AMCU head Olga Pishchanska.
The accused gas stations operate under 11 brands, including Ukrnafta, Ukrtatnafta and Avias.
Avias is a well-known brand that belongs to the so-called Privat Group, a business group controlled by Kolomoisky and Gennadiy Bogolyubov, founders of PrivatBank.
AMCU said the collusion was evidenced by all the brands using Avias’ software to “coordinate the price and trade behavior of participants.”
All companies in the network bought the same brand of gasoline — Keropur Energy. Its trademark belongs to Kolomoisky’s Ukrtatnafta, which runs the Kremenchuk Oil Refinery in Poltava Oblast. The Kremenchuk Oil Refinery must pay the biggest share of the fine — $104 million. The company already denied the accusations and stated that it will appeal in court.
The company added that it sees “signs of treason” in the committee’s actions, calling it an attempt to “destabilize the situation on the fuel market of Ukraine.”
According to the investigation, Ukraine’s city of Dnipro — Kolomoisky hometown — is the center for the whole network, where “detailed plans and coordination activities were carried out.”
AMCU fined 170 legal entities that were listed as owners of gas stations across the country — something that energy expert Sergey Kuyun, head of consultancy A-95, called a “factory of legal entities.” The Privat Group needed a plethora of entities to own gas stations to cover its tracks. In October and November 2018 alone, Privat Group changed the nominal owners of 739 gas stations in 16 oblasts.
“One appears, the second shuts down, the third goes bankrupt,” Kuyun told the Kyiv Post, adding that many can be owned through offshore companies. “This is a huge system.”
The expert believes that the current decision of AMCU is more a political move than an economic one. The investigation was re-started only one month ago. “Usually, it does not happen so quickly,” Kuyun said.
Previously, the Privat Group “successfully and actively blocked” the justice system. In 2018, for example, AMCU was about to make the same decision but was stopped by a bailiff who interrupted the committee meeting and read out a court decision that banned the use of some of the evidence.
AMCU’s decision is a link in the growing chain of Kolomoisky-related court cases in Ukraine.
Kuyun doubts the state will receive the fine in full. According to him, only two companies — Ukrnafta and Ukrattnafta — may pay the fine, because they are major players on the fuel market.
Everything will depend on the quality of AMCU’s investigation, he said. “If the investigation is done properly, companies will have to pay.” Otherwise, the lawyers of Privat Group “will quash this decision.”
