A polarising Pole returns to the fray

By bne IntelliNews July 24, 2014

Jan Cienski in Warsaw -


Jan Kulczyk is back. After years of keeping a very low profile in his home country, Poland's richest man is again cutting deals and spooking politicians after becoming embroiled in an ongoing bugging scandal.

Kulczyk, 64, became a billionaire by cutting extremely lucrative deals during the country's massive privatisations in the 1990s. His formula was to use his contacts with the top levels of politics and business to make himself a crucial middle middle man in several enormous transactions.

But his run of luck ended at the turn of the millennium, when his efforts at playing a leading role in PKN Orlen, the state-controlled refiner, blew up amid allegations that he had been in touch with former Russian spies interested in grabbing a share of Poland's energy market. Although nothing was ever proven against him, the embarrassing spectacle of  being forced to testify before a hostile parliamentary commission convinced Kulczyk to shift most of his business interests outside of Poland.

Instead of hobnobbing with Polish politicians, Kulczyk instead turned his formidable social skills to his fellow London-based billionaires. Rather than invest in Poland, he began to take an interest in Africa, piggybacking on some energy investments led by Indian steel magnate Lakshmi Mittal, and undertaking other direct investments of his own on the continent.

One effort to return to big Polish deals flamed out in 2010, when the treasury ministry backed out of a transaction to sell him a controlling stake in Enea, one of the country's largest power companies. Kulczyk had been hoping to use Enea as the linchpin for creating a large private utility.

Back home

But Kulczyk now seems to be taking a renewed interest in Poland. One of his companies, KI Chemistry, recently took a majority stake in Ciech, a leading chemicals company, after the treasury ministry agreed to sell him its 38% share. Kulczyk was appointed to the company's board, along with several of his lieutenants.

Ciech was an easier morsel for Kulczyk to swallow than a company like Enea, which was in the politically sensitive energy sector. Chemicals arouse fewer populist hackles. Ciech has also been restructured and a cost-cutting programme has made it profitable. It posted a net profit of PLN49m (€12m) on revenues of PLN3.5bn in 2013, after posting a net loss of PLN431m a year earlier.

Kulczyk's return to big deals with the treasury ministry have coincided with his reappearance in the country's scandal sheets as well.

When the Wprost news weekly broke its first stories based on recordings obtained from private dinner conversations of top political and business figures – dubbed “Waitergate” thanks to the likely originators of the recordings – the magazine also said that there were recordings of meetings with Kulczyk. Those have not yet been released, but one was apparently with Pawel Gras, former spokesman for prime minister Donald Tusk, and reportedly concerned the privatisation of Ciech.

Kulczyk also met with the head of Poland's official watchdog agency to complain about economic misdeeds of which he was aware.

Another of the recordings, this one made three years ago by a journalist and published in July, was with Roman Giertych, a right-wing politician turned lawyer. Apparently, Giertych was working on behalf of a “friend of Kulczyk's” and was trying to negotiate a deal with the journalist, Piotr Nisztor, who was writing a book about Kulczyk. Giertych was concerned that the book would cast an unfavourable light on Kulczyk's father, Henryk Kulczyk, who had become rich while living in Germany by trading with Poland's communist regime in the 1960s and 1970s. Giertych was apparently proposing to pay as much as PLN400,000 for the book not to appear.

The recordings plus the Ciech deal have again made Kulczyk a Warsaw talking point. In recent years he had largely contented himself with appearing at conferences and promoting his charities. His economic activity in Poland was low profile, largely the completion of part of Poland's A2 east-west highway, as well as an investment in renewable energy.

He had also become anathema to most working politicians. Although Aleksander Kwasniewski, a former president, is one of his advisers, meetings between him and top officials had become something of a rarity. When Tusk flew to Nigeria last year as part of an effort to boost Poland's economic contacts with Africa, the lead commercial presence on the trip was not Kulczyk but his son Sebastian, who accompanied the Polish leader.

Politicians' wariness was linked to the fear that Jan Kulczyk would quickly cause them problems with voters. And they were right to worry. The Ciech transaction has already been criticised by the opposition Law and Justice party as being overly favourable to Kulczyk, creating problems for the ailing Civic Platform government as it heads into parliamentary elections next year.

Kulczyk's touch may be golden when it comes to making a fortune out of complex transactions, but it has more of a leper's touch to any officials seen to be too close to him.

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