Large Ukrainian business in Russian Federation: What else is left there

Author

Valery Moiseev

In early May, YouControl published the results of a research in which it found that 273 Ukrainian companies have ties with 251 Russian businesses. The study was based on data from state registers as of December 2021.

has decided to take a closer look at what this data show with regard to some of the largest financial and industrial groups and companies.

Before that, let us note that on March 3, the Cabinet of Ministers imposed a moratorium (ban) on the fulfillment of obligations to Russia and persons associated with the Russian Federation (Decree No. 187). The decision is valid until the entry into force of the law on the settlement of relations with the participation of persons associated with the aggressor state, but not more than one month from the date of termination or cancellation of martial law.

The latest customs statistics data on trade with the Russian Federation refer to February.

Rinat Akhmetov’s SCM Group

According to YouControl, ESTA Holding, which is part of SCM, has a corporate stake in DOL Bereg LLC, which was re-registered in the occupied Crimea in accordance with Russian law. Another company, S M Service LLC, owns a stake in a company of the same name registered in Moscow.

According to the latest data of the Russian information system SPARK, the founders of DOL Bereg (Alushta) are ESTA Holding LLC (34% of the authorized capital) and ESPV Ltd. (Cyprus, 66%)

In 2019, Radio Svoboda reported that Rinat Akhmetov's company in Crimea still owned a children's health camp (CHC) Bereg in Alushta. The camp is managed by the DOL Bereg company, since January 2015 it has been registered in Russian jurisdiction. DOL Bereg is owned by the Ukrainian ESTA Holding and the Cypriot ESPV. The founder of ESTA Holding is also ESPV.

Responding to this publication, SCM stated that they do not control or manage any of the assets that had belonged to the company before the annexation of Crimea. In the camp Bereg in March 2017, the invaders established a "temporary administration".

As for the Ukrainian SKM Service LLC, its main activity is the rental and management of own or leased real estate. It can be assumed that its Moscow namesake was engaged in the same activity, serving the needs of the group.

Businesses affiliated with Petro Poroshenko

According to YouControl, Central European Confectionery Company LLC, which is part of the Roshen Corporation and is owned by Oleksyi Poroshenko, son of the fifth president of Ukraine, Petro Poroshenko, owns Roshen LLC, which is registered in the Lipetsk region. And the Sevastopol Shipyard, whose beneficiary is Poroshenko himself, is a participant in two Crimean companies re-registered under Russian law.

After the outbreak of the war, Roshen reported on its website that:

from 2014, the supply of products to Russia has been stopped;
the Lipetsk factory has been closed from 2015;
franchises for the production of Roshen products in the Russian Federation were not granted;
from February 24, 2022, the supply of products to Belarus has been stopped.

Responding to the YouControl report, the press service of the European Solidarity party stressed that Petro Poroshenko had no businesses in the Russian Federation. The evidence in the registers is related to the fact that, "despite attempts to liquidate legal entities registered in the Russian Federation, this could not be done due to a ban and unlawful obstructions from the authorities of the aggressor country."

In March 2017, the director of the Lipetsk confectionery factory said in an interview that "after the completion of all technological processes at the factory, there remains a reduced access control service, security, one electrician, and one plumbing specialist who will be on the beat and, if necessary, repair something. In addition to the technological processes related to the factory, it is also necessary to bring to a logical conclusion all litigations in which we dispute unfounded tax claims."

In April 2019, Russian media reported that the Sevastopol Shipyard named after Sergo Ordzhonikidze (Sevmorzavod), previously owned by Petro Poroshenko, should become the base enterprise for overhauling ships of the Black Sea Fleet.

After the occupation of Crimea, it was "nationalized" and transferred to the ownership of Sevastopol. In February 2018, Sevmorzavod was transferred to federal ownership.

In addition to this, let us note that the other day, Roshen was deprived of the trademark associated with the popular Soviet film Hello, I am your aunt! in the Russian Federation. Now beer will be produced under it.

In 2003, the Ukrainian confectioner registered the trademark Donna Rosa in Russia in honor of Aunt Charlie, the widow of Don Pedro and a millionaire from Brazil, where there are many, many wild monkeys. This April, the patent expired, and Roshen did not renew it.

Serhiy Tihipko’s TAS Group

According to YouControl, PrJSC Dniprovagonmash, whose beneficiary is Serhiy Tihipko, owns an LLC of the same name in Moscow.

Dniprovagonmash is one of the leading Ukrainian enterprises in the design and manufacture of freight cars. Before the war, a significant part of its exports belonged to the Russian Federation. Trading House Dniprovagonmash LLC was established in Moscow. In 2020, its proceeds amounted to 75.74 million UAH, including the sale of 41 wagons for 74.8 million UAH.

After the outbreak of the war, supplies from Ukraine stopped and there was nothing to trade in the Russian Federation.

Motor Sich Corporation

According to YouControl, JSC Motor Sich, a leading corporation for the design, production, repair, and maintenance of gas turbine engines for aircraft and helicopters, is a co-owner of two Russian companies registered in Moscow.

The company's engines have been mounted on most helicopters and a lot of aircraft in the Russian Federation. The company not only sold them, but was also engaged in their maintenance.

In 2014, the then-president of Ukraine Petro Poroshenko banned any military-technical cooperation with Russia and the supply of dual-use products, including helicopter and aircraft engines.

The management of Motor Sich for some time tried to extend supplies, at least under existing contracts. Even the ideas of joint ventures were voiced. However, they failed to materialize.

The company stopped supplying all products to Russia: engines for aircraft and helicopters, gas turbine engines for cruise missiles, refused service support for equipment and suffered enormous losses. And Moscow had to urgently establish import substitution in such a complex and high-tech industry as aircraft engine building.

Over the past few years, Motor Sich has been at the center of a high-profile international scandal related to the purchase of its shares by Chinese companies.

Therefore, it is highly likely that the companies currently listed in the registers of the Russian Federation are unclosed remnants of the former service and trading structure.

Not only registers contain information

In early May, the Kommersant newspaper reported that the Russian factories Russkiy Sever and Rodnik & K, which produced vodka Khortytsa, Morosha, and Pervak from the portfolio of the Global Spirits holding owned by Ukrainian businessman Evgeniy Chernyak, changed owner. The enterprises should also rethink their product range by moving away from Global Spirits brands.

Market participants previously linked Russkiy Sever and Rodnik i K with Chernyak himself. But Global Spirits denied that he owned assets in Russia. Russian Sever also claimed that they were not included in Global Spirits, and the brands were used under license. In the explanations to the reporting of Trade House Megapolis for 2020, a citizen of Ukraine Oleksandr Borysovych Chernyak, who was called Evgeniy Chernyak’s father in the media. was called the beneficiary of the company.

The newspaper's sources in the alcohol market believe that the change of owners of companies could be required for the "visible alienation" of assets in the Russian Federation. They believe that the deal is formal, and the enterprises will remain under Chernyak’s control.

The Global Spirits website says that on February 24, due to military aggression, the company revoked a license for manufacturing and distributing products on the Russian market. Supplies of products to Russia were stopped back in 2014.

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In March, the European Business Association reported that of its member companies, only 34% did business in or with Russia. Of these, 31% completely cut ties with the aggressor country, 14% suspend work, and the remaining 34% are still thinking about it.