Yanukovych used network of UK shell companies to hide private empire

By bne IntelliNews February 24, 2014

Graham Stack in Kyiv -

Documents rescued from former Ukrainian president Viktor Yanukoych's abandoned estate point to an empire of hidden business and palatial residences owned via a network of UK companies.

As Yankovych fled his Kyiv residence in panic on the night of February 22, after security forces had killed around 75 protestors over the previous days, his staff frantically attempted to destroy records of his undeclared business empire that spanned the country - first by fire, and then, apparently as this proved too slow, by dumping the archive in the waters of the Dnipro, on the banks of which his palatial residence and 140-hectare estate lay.

But the Dnipro at this point forms part of a still-water reservoir system, meaning that the files simply sunk to the bottom. Opposition activists who entered the estate on the morning of February 23 found files still floating on the surface, and during the course of the day divers retrieved masses more from the reservoir bed, totalling around 200 stuffed folders.

A team of leading investigative journalists are currently sifting through the singed and sodden documents. The first documents posted online show that Yanukovych used a network of UK shell companies to hide ownership of a business empire that ranged from one of Europe's largest data centres in the heart of Kyiv, to Donbass coal mines, to palatial Black Sea real estate.

Europe's largest data centre

Documents posted online show that Tantalit - the holding company that built and owned the Mezhyhirya estate - in the course of 2011 paid hundreds of thousands dollars in 2011 to construct a squat glass-and-concrete monstrosity in wooded parkland in the historical centre of Kyiv. The building's roof serves as helipad, while it contains an enormous datacentre, among other offices. The Ukrainian companies running both the building and the data centre are owned by the same UK shell company, Fineroad Business LLP.

Yanukovych used the helipad on the building's roof to commute between the nearby presidential administration building and his opulent residence outside Kyiv. Yanukovych's flight from Kyiv may have started here on the afternoon of February 21 - first flying to his suburban residence from where, under cover of night and following the abortive attempt to destroy his files, a helicopter whisked him on to Kharkiv. He is currently believed to be in Crimea, possibly holed up in an Orthodox monastery, according to reports.

The building under the helipad, believed to have cost $40m and opened in July 2013, houses Ukraine's largest data centre, according to its website, and one of the largest in Europe. Clients including state-owned monopolies such Ukrainian Post. Bizarrely, the data centre advertises its physical proximity to customers as a selling point: "Prime location of the facility will allow customers to save on the organization of the channels of transportation," reads the Borat-style blurb on the website.

"I have only worked here a week and do not know who or where the boss is," the data centre's press secretary told bne when asked to comment.

From Donetsk to Crimea

Another UK shell company apparently fronting for the Yanukovych family is Navimax Ventures Ltd. According to investigations by Ukrainskaya Pravda, Navimax Ventures features in the ownership structure of a major Donetsk coal trading company, Donbasskii raschyotno-finansovyi tsentr (DRFTs), founded in 1999. DRFTs has long been associated with Yanukovych, who in 1999 became governor of the Donetsk region, the first step in his path towards the presidency. The company has been accused of being the main trader of coal mined from the illegal mines (called kopanki in Ukrainian) worked under 19th century conditions, responsible for numerous mining deaths and prevalent throughout Yanukovych's home region.

Yanukovych's representatives had long denied any link to the company. But proof has arrived to the contrary: "We found documents relating to DRFTs among the papers from Mezhyhirya in the water," investigative journalist Natalie Sedletska, one of the team sifting through Yanukovych's archive, confirmed to bne.

In a different world altogether from the kopanki, Navimax Ventures also features in the ownership structure of three palatial Crimean residences, all situated in extensive grounds washed by the Black Sea, which journalist investigations have also linked to the Yanukovych family.

Vitaly Klichko's UDAR party announced February 24 that it had entered one of these properties - a five-storey residence being built by the sea at Cape Aya, near Balaklava, and known popularly as "Mezhyhirya 2". The property had closed locals off from enjoying a spectacular stretch of the Black Sea coast.

A fourth magnificent Crimean residence, at Masandra, linked to the Yanukovych family is leased by another UK company, Roadfield Capital LLP.

Yanukovych used network of UK shell companies to hide private empire

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