These days, we don't really associate Ukraine with prosperity and billionaires. It's better known for political unrest and a complicated relationship with Russia. But there are indeed some billionaires who call Ukraine home. Most of Ukraine’s wealthiest, sometimes known collectively as the 'Ukrainian Oligarchs', have something crucial in common: They are alleged to use strong-arm tactics in order to succeed, meaning, in cases where the allegations are true, they've gotten ahead by quite literally threatening and intimidating others.
In a 2013 article, Forbes, USA stated: “Most people understand that rising out of the post-Soviet collapse to become an oligarch required questionable dealings…[Meanwhile], Ukrainian business has evolved, and so have its protagonists, albeit some more than others.”
If we are to believe much of the information out there, the businessmen of modern day post-Communist Ukraine – the rich ones anyway – are dirty rich, the operative word being “dirty.” By all accounts they are often associated with organized crime - the following list of top 5 richest Ukrainians is repeatedly marked by allegations of criminal activity. If it's true that much of this money is dirty money, what does it mean for this small country that has been under Russia’s thumb on and off (mostly on) over the years?
The stories behind the lives and business dealings of Ukraine's 5 richest men are, perhaps, a little more colourful than those which we've come to expect on the average rich list. These oligarchs emerged after Ukraine gained independence from Russia, and it has since been reported that (as of 2008) the richest 50 people in the country control the equivalent of around 85% of Ukraine's GDP. Who are the men with the greatest stake in the country's wealth, and how did they come by such prosperity in a largely struggling country? Read on to find out more about the fascinating, sometimes disquieting, stories behind Ukraine's 5 richest men.
5 Dmytro Firtash: $1 billion
Every story has two sides, and some have three or four. Depending on what you read, Dmytro Firtash is either a savvy and ruthless entrepreneur, or he’s savvy, ruthless, unethical and mercenary. The 49-year-old has made his money largely in chemicals, energy, fertilizer and titanium. Those are some safe (read; lucrative) industries, but in consideration of the more conspiratorial views, let us contemplate the following: Firtash, along with the Russian government, established a gas-trading company to be an intermediary in sales of the resource from Russia into the Ukraine. Separately, an international court ordered Ukraine’s state energy company, Naftogaz, to pay Firtash’s privately-owned energy company, RosUkrEnergo, for the expropriation of natural-gas resources in the billions of cubic meters, with interest. What muddies the waters is this: How exactly do all these companies fit together? Firtash is the common thread, and none of this looked quite right to external authorities.
The FBI investigated the businessman for eight years before arresting him; he denies allegations that he has ties to the Russian mafia. To further inflame things, it is thought by some that Firtash was largely if not singlehandedly responsible for the imprisonment of Yulia Tymoshenko, a Ukrainian presidential hopeful that was not pro-Russian. It’s a murky pond, but no doubt about it, Dmytro Firtash is a very big fish.
4 Sergey Kurchenko: $2.4 billion
Called a “straw man” by some, this 27-year-old rose to wealth and power seemingly out of nowhere. This may be the reason some believe him to be a front man for President Oleksandr Yanukovych, or more specifically for his son. The presidential family has serious holdings in both finance and energy, but not in media. Kurchenko, who bought his first company at the age of 19 and who was originally from a working-class family, bought Ukraine Media Holdings - the parent company of publications like Vogue and Forbes Ukraine - last year and he thus gained control of nearly 50% of the country’s online readership. The editor-in-chief of Forbes Ukraine was publicly very clear on his opinion of the deal, saying he believed Kurchenko’s intent was one of three possibilities: either to silence the media in time for the 2015 presidential elections, to legitimize himself and his reputation, or to use the magazine for some other unknown purpose.
Kurchenko coincidentally worked for Naftogaz, the state-owned energy company that lost a judgment to RosUkrEnergo, Dmytro Firtash’s company. Kurchenko began working for Naftogaz as a courier and quickly worked his way up to management’s head ranks, before buying his own petroleum company. Ties with companies involved in gas smuggling as well as links with the prosecutor general’s son have been denied by all parties involved.
Kurchenko is alleged to have embezzled $1 billion from his various oil and media endeavours; he is reported to have fled his home country in February and has not been seen since.
3 Igor Kolomoisky: $3 billion
Kolomoisky was sued by the second-richest person on this list, who you will read about, for selling him a worthless shell company. To add insult to injury, Kolomoisky was then alleged to have turned around and resold a part of that same company to a third party! He is reported as having a worth of $3 billion by Forbes, but up to $6.5 billion according to the Ukraine journal the Korrespondent. Kolomoisky and his business partner Gennadiy Bogolyubov together founded the group Privat, which is founded around Privatbank and controls thousands of companies across several countries including Ukraine, Russia, Georgia, Romania, the EU, Ghana and the USA. These companies predominantly have to do with oil, gas, chemical, energy and steel, and despite the group’s size, none of the companies is publicly traded. That is quite a feat.
Privat Group is known for typically acquiring companies through the hostile takeover – Ukrainian-style, according to Forbes, which means literally heading over to the quarters of the company to be absorbed “armed with baseball bats, iron bars, gas and rubber bullet pistols and chainsaws.” Business methods all over the world have, at times, been similar, even once upon a time in the US. When we judge Kolomoisky or his peers as being crooks because they may still use weapons, perhaps we should think about current methods in countries like the USA, where contemporary “weapons” involved in takeovers and other business dealings may not be guns, but may be just as coercive.
2 Victor Pinchuk: $3.2 billion
So this is the 'poor' guy who was conned out of a large sum of money over a business that did not exist by Kolomoisky, above. Swampland in Florida, anyone? Still, did Pinchuk have it coming? Seemingly not, as he's the only billionaire of the top 5 who has avoided allegations of criminal activity and he is, in fact, an active philanthropist. Here’s what we know about this Ukrainian oligarch:
Like Kolomoisky, Pinchuk was born to Jewish parents in the Ukraine, and the two went on to be schoolmates, graduating only two years apart from the National Metallurgical Academy of Ukraine (the little society of Ukrainian oligarchs is so interwoven and tangled as to be almost nepotistic). Pinchuk served two terms as a member of the Ukraine’s parliament and also married the daughter of a former Ukrainian president. He is the founder of EastOne Group LLC, of which he is also the primary owner. The company is based in London and its holdings include financial advising, investing, project funding, steel and media.
Pinchuk is very well known for his philanthropic undertakings, including the fight against TB, malaria, and HIV/AIDS. His charitable organization has also funded the arts, education, and several neonatal centres. This Ukrainian bigwig has joined the likes of Bill Gates and Warren Buffet in pledging to give half or more of his estate to charity during and/or after his lifetime.
1 Rinat Akhmetov: $12.5 billion
Akhmetov has been much in the news lately, as having separatist leanings and not wanting to be joined with Russia. Some pro-Ukrainian activists say he is a financial backer of separatist militants in Donetsk, and Akhmetov has publicly appealed for the integrity of Ukraine, though he publicly calls for peaceful solutions. Allegations have been made of this wealthiest Ukrainian that he has ties to organized crime. These men are nothing if not interesting!
As the founder and president of SCM or System Capital Management, Akhmetov owns companies with diverse portfolios, including energy, banking, insurance, metals, mining, media, telecommunications and real estate. SCM employs roughly 200,000 people and has assets in the Ukraine as well as in Italy, Switzerland, Bulgaria, the UK, and the USA. Its largest company is Metinvest, one of the biggest steel companies in Europe; it is also the Ukraine’s largest producer of iron ore. SCM is at the top of various publications’ lists for companies that are socially responsible.