Ukraine's 'Chocolate King' Poroshenko puts his crown in trust

Ukraine's 'Chocolate King' Poroshenko puts his crown in trust
By bne IntelliNews January 15, 2016

In a bitter-sweet but temporary parting with the main source of his huge wealth, Ukrainian President Petro Poroshenko transferred his stake in Roshen Corporation, the country's largest confectionery manufacturer, to an independent and unnamed "blind trust".

Almost two years after pledging to concentrate on being president and not on his business empire, Poroshenko, nicknamed the Chocolate King by Ukrainians, said in Kyiv on January 14 that the transfer took place under a contract signed earlier this year. The trust is blind, meaning he will theoretically have no oversight how his assets are managed.

"During my presidential term, neither I nor someone else can break this trust," Poroshenko, 50, told a  press briefing. "Secondly, under the contract, neither my signature nor my orders have legal force. A respectable foreign bank of the first category will manage the trust, it will own, control and manage the assets."

Poroshenko, whose wealth is varyingly estimated from $750mn to $1bn, pledged to sell Roshen, producer of 450,000 tonnes of chocolate annually, after he became Ukrainian president in May 2014.

Letting go of his business is not required by Ukrainian law, but was rather meant as a sign of good faith that he would run the country to the best of his abilities. "I want and will take care exclusively of the country's well being," Poroshenko said while campaigning, but underlining that the deal would only take place once proper investors came to Ukraine.

The president also refused from the outset to relinquish control over his Fifth TV channel, which has been instrumental in cementing his power while countering his opponents.

Ukrainska Pravda was unable to obtain clarification on January 14 from Poroshenko's administration which institutions are involved in the deal.

The president said transfer of his Roshen stake is being conducted by the Rothschild investment company, and that the unnamed bank that is managing the trust also has power of attorney for four years to negotiate on the sale of assets. Poroshenko added that he also intends to transfer to a trust his shares in Ukraine's International Investment Bank (IIB), in which he owns a 60% stake.

Many Ukrainians consider IBB a quiet harbour during current financial and economic crisis in war-torn country. According to the National Bank of Ukraine (NBU), IIB assets increased by 85% in 2014, which was the fourth best result in the banking sector.

Before winning the presidency, Poroshenko served as Ukraine's foreign minister from 2009 to 2010, and trade minister in 2012. Outside government, he emerged as one of the country's second-tier oligarchs, with a lucrative career in acquiring and building assets from confectionery to ship-building.