A top Ukrainian real estate developer has appealed to President Petro Poroshenko for help, saying that his business is facing extortion by the Security Service of Ukraine, or SBU. But the SBU claims that it is only following the law.
On Dec. 11, Artur Mkhitaryan, the founder of the Taryan Group, released a video message on Facebook in which he recounted the predations he says his business is facing.
However, the SBU claims that it is acting legally. The security agency says that it is conducting a pre-trial investigation in a criminal case opened on the basis of a complaint by a civil society organization that works to protect the city’s monuments and cultural heritage.
“We emphasize that the pre-trial investigation in the current case does not create artificial barriers to conducting legal commercial activities” but studies whether the construction work is in line with Ukrainian law “so that recent tragic events do not repeat themselves,” the agency said in a Facebook post.
It was referring to a Dec. 2 incident when the roof of a youth sports school collapsed in the town of Vyshneve. Instructors at the school had evacuated young children from the building just minutes before the collapse, but Mkhitaryan has nothing to do with this building.
However, according to Mkhitaryan, over the past two years, officials have created artificial barriers to receiving permits from the Ministry of Culture in order to build. The ministry is “sabotaging” the issuance of these permits to several dozen construction companies, Mkhitaryan says. Meanwhile, companies belonging to current and former officials continue to receive permits.
“Today, the officials have already crossed the red line and are pushing businesses out of Ukraine,” Mkhitaryan says in the video.
Taryan is building on the territory of a former factory. Neither the Ministry of Culture, nor the Institute of Archaeology have determined that the land has historical or cultural significance, Mkhitaryan says. Nonetheless, the SBU and General Prosecutor’s office have opened criminal cases claiming that the land lacks a required construction permit from the Culture Ministry.
Other companies have faced similar cases, Mkhitaryan says in the video.
After the cases were opened, people from the SBU made contact with his company and offered to “solve this problem” for $1 million or an apartment in the future building.
“And so we didn’t think too long about ‘the offer you can’t refuse,’ the SBU uses dirty PR techniques,” publishing negative materials about the company, Mkhitaryan says in the video.
The aim appears to be “scaring clients, in order to drive me into the right corner for the SBU.”
“What is so broken in our system that, instead of searching for terrorists, bandits, spies, and corrupt officials, the special services are busy extorting progressive business?” Mkhitaryan asks.
Founded in 2011, the Taryan Group is a Ukrainian investment and real estate development company known for its modern constructions like the TSARSKY City Resort in Kyiv.
Taryan would not be the first company to face pressure from the SBU.
In July, reformist MPs, civil society activists, and businesses gathered in central Kyiv for a roundtable on reforming the SBU. According to participants, while the security agency presents its work as protecting the country, its relations with business often resemble an extortion racket.
In particular, business representatives recounted how the SBU had accused them of “financing terrorism” in order to open investigations, harass, and potentially seize their companies.
