President Petro Poroshenko and his close ally and former chief of staff Boris Lozhkin are facing new corruption accusations linked to Lozhkin’s $500 million sale of his UMH media group in 2013 to Serhiy Kurchenko, an ally of ex-President Viktor Yanukovych.
First, Al Jazeera on Feb. 8 published a document showing part of the money paid for UMH came from a loan secured with assets worth $50 million allegedly stolen by Kurchenko. This implies that Lozhkin received funds raised fraudulently, and raises the questions of why they have not been confiscated.
According to documents revealed by Al Jazeera, Poroshenko still owned a 3 percent stake in UMH when it was sold to Kurchenko and thus also received $15 million raised fraudulently. Poroshenko denied having owned the stake at the time of the sale.
Second, 1+1 TV channel’s TSN show on Feb. 13 revealed alleged evidence that Lozhkin acquired one of UMH’s assets, Our Radio, back from Kurchenko in 2014. The investigation suggests that the acquisition could have been a payback for Ukrainian prosecutors’ decision to unfreeze Kurchenko’s UMH assets in 2014.
Lozhkin’s spokeswoman Maria Popova denied the accusations, saying that “the legality of the UMH deal has been confirmed by international law firms” and that currently Lozhkin does not have any media assets.
Stolen assets
Al Jazeera published a document according to which Kurchenko’s VETEK Group took out a $160 million loan from state-owned UkrEximBank to finance the purchase of UMH.
The loan was secured with $50 million held in the accounts of three Cypriot firms — Kviten Solution Limited, Sabulong Trading Limited, and Quickspace Limited.
Serhiy Kurchenko (UNIAN)
According to a secret Kramatorsk court ruling on the confiscation of $1.5 billion linked to Kurchenko published by Al Jazeera in January, the three companies were part of a large-scale money laundering and embezzlement scheme.
In December, a Kyiv court froze Kurchenko’s UMH assets for the second time. One of the arguments prosecutors used was that the $160 million loan agreement taken out by Kurchenko showed signs of money laundering.
Poroshenko’s role
Poroshenko has always claimed he sold his 3 percent stake in UMH in the months prior to the deal. However, an analysis of Cypriot company records by Al Jazeera indicates that, on the day of the sale — Oct. 28, 2013 — he still held the shares via a company in the British Virgin Islands. Unless he sold the BVI company beforehand, at the point of sale, Poroshenko stood to receive $15 million, tripling his initial investment, Al Jazeera reported. A spokesman for Poroshenko said he did not own, directly or indirectly, any stake in UMH on Oct. 28, 2013.
Kurchenko confirmed in December that he bought UMH not only from Lozhkin but also from Poroshenko.
If he took part in the deal, it is not clear if Poroshenko paid the appropriate tax on the deal, given that it was executed in offshore tax havens, according to Al Jazeera.
Poroshenko also co-owned with UMH the Korrespondent magazine, the bigmir news site and Our Radio until April 2013, as well as Retro FM and Next Radio until February 2013.
Our Radio scheme
Another accusation is that Lozhkin allegedly acquired Our Radio, one of UMH’s assets, from Kurchenko in 2014.
Aziza Kourmpanova is the head of both Avikan Limited, which owns Our Radio now, and Ensitar Limited, which is owned by Lozhkin.
Our Radio is owned by Ukrainian firm Katapulta, which is in turn owned by Oleksandr Kartashov. TSN reported that Grigory Shverk, who was a vice president of UMH under Lozhkin, had confirmed to them that Kartashov was his relative.
Moreover, Olena Leshko, who became the head of Katapulta in 2016, used to work at Retro FM radio when it was owned by Poroshenko and Lozhkin.
Oleksandr Onyshchenko, a fugitive lawmaker charged with graft, told the Kyiv Post that the alleged acquisition of Our Radio by Lozhkin was payback for prosecutors’ decision in 2014 to unfreeze Kurchenko’s other UMH assets. According to a contract published by Al Jazeera, Onyshchenko and Russian-Ukrainian oligarch Pavel Fuks bought Quickspace Limited from Kurchenko for $30 million in 2015. Onyshchenko denies completing the deal.
Money laundering?
Some analysts believe UMH’s $500 million sale price was far more than the real value of UMH, and that is why suspect that money laundering and a kickback were involved. Lozhkin denies these accusations.
According to the Forbes magazine, UMH’s price was 80 percent to 300 percent higher than foreign media groups with similar financials, including Poland’s Agora and Western European media groups.
Ex-Infrastructure Minister and former investment banker Andriy Pivovarsky said in 2013 that UMH was estimated to be worth $120 million to $150 million in 2012.
Six days after the $160 million loan was made to Kurchenko and the official change in ownership, Lozhkin received $130.5 million from the Latvian bank account of BVI company Trejoli Business Ltd, which is linked to Kurchenko, Al Jazeera said.
The money went to an Austrian bank account held at Raiffesen Bank on behalf of his BVI company, Integrity International Holdings. The transfer led to a suspicious activity report being filed at the bank, which in turn triggered a money laundering investigation by Austria.
However, the investigation saw no progress due to a lack of cooperation from Ukrainian law enforcers.
Meanwhile, Kurchenko said no taxes had been paid on UMH’s sale in Ukraine, which prompted accusations of tax evasion. Lozhkin denies them.
