Europe’s only titanium sponge plant is now fully owned by the state after a Zaporizhzhia court stripped fugitive oligarch Dmytro Firtash of his minority share.
On Aug. 4, Zaporizhzhia Economic Court ruled in favor of the Specialized Anti-Corruption Prosecutor’s Office to return the plant’s minority share to the state.
Under pro-Kremlin President Viktor Yanukovych, a Cyprus offshore company Tolexis Trading Limited, owned by Firtash’s DF Group, was able to acquire a 49% share in the Zaporizhzhia titanium sponge plant in 2013.
The State Property Fund maintained control of the 51% share.
According to the deal, Firtash’s company pledged to invest $110 million into the plant’s modernization. According to Dmytro Sennychenko, head of the State Property Fund, Tolexis Trading Limited invested less than $1 million.
“This court decision proves that justice stand above any private interests,” Sennychenko wrote on Facebook.
“We will be able to attract an honest investor. The one who will really develop the plant, not destroy it,” said Sennychenko, who added that the plant ended 2019 with $60 million in losses.
Despite owning a minority share, watchdog organizations have stated that the plant was run by Firtash.
Firtash’s Group DF denies all accusations. Fritash’s legal team called the accusations “biased” and have stated their intention to go to court.
According to Roman Chishinsky, a lawyer at Tolexis Trading Limited, the money that the company had to spend on renovations is still in the plant’s bank accounts.
Chishinsky named “the war and the subsequent economic shocks in Ukraine” as the reason why the company lagged in modernizing the plant.
“It became economically inviable,” he said.
“In Olympic terms, having run only 25% of the distance, the State Property Fund and the Specialized Anti-Corruption Prosecutor’s Office hastened to declare themselves winners,” Volodymyr Sivak, former CEO of the plant, told the Kyiv Post in a written comment.
Located in Zaporizhzhia, regional capital of 750,000 people some 550 kilometers southeast of Kyiv, the titanium sponge plant is a crucial piece of Ukraine’s post-Soviet heavy industry.
A fifth of all the world’s reserves of titanium is located in Ukraine, while the titanium sponge is used in rocket engineering, aerospace, electronics, healthcare, and the defense industry.
However, the Zaporizhzhia plant is in a dire state.
In 2019, the plant produced a mere 7,000 tons of titanium sponge, a third of its potential capacity.
“The modernization did not take place. The plant is on the brink of survival,” said Sennychenko.
Firtash has been living in Vienna since 2014, fighting off a U.S. extradition warrant. The U.S. has charged Firtash with bribery and racketeering, accusations he denies.
