Saturday, July 07, 2007

Major conflict of interest revealed

Investigative journalism is playing an increasingly significant role in Ukrainian politics. For example, it was primarily the media that recently revealed the massive assets inexplicably accumulated by several Constitutional Court judges.

Today's 'Ukrayinska Pravda' run a story exposing energy minister Yuriy Boyko's links with Dmytro Firtash, owner of 45% of the monopolist imported gas supplier RosUkrEnergo.

A summary from 'Ukrainian Journal' below:

Energy minister in bed with gas supplier
Journal Staff Report

KIEV, July 5 - Yuriy Boyko, the energy and fuel minister, was named a beneficiary of RosUkrEnergo, a controversial gas trader, among other assets worth billions of U.S. dollars, legal papers obtained by a newspaper showed Thursday.

Boyko, who has been long alleged by opposition politicians of having links to RosUkrEnergo, Ukraine's monopoly natural gas supplier, had always denied having any interests in the company.

But the letter of attorney, obtained by Ukrayinska Pravda, shows Dmytro Firtash, a key shareholder in RosUkrEnergo, at least once has legally authorized Boyko "to manage and dispose of all assets" that he had owned.

Firtash, who last month consolidated all his assets under a new holding, Group DF (GDF), declined to comment. GDF's companies posted $4.6 billion in consolidated annual revenues as of Dec. 31, 2006.

Boyko, through his spokesman, on Thursday confirmed the letter of attorney had existed. The spokesman said the letter was aimed at helping Firtash to handle divorce with his wife.

Boyko's emerged link to RosUkrEnergo may shed light on the ownership of the company, which has been repeatedly investigated by authorities in the U.S. and the E.U. for its alleged link to organized crime and tax evasion. RosUkrEnergo denied the allegations.
The revelations are likely to put mounting pressure on Boyko to step down as opposition leaders on Friday will probably call for his immediate resignation, political commentators said.


Boyko, who was appointed to the post in August 2006 by Prime Minister Viktor Yanukovych, is the key negotiator with Russia on Ukraine's natural gas supplies. Boyko persistently defended RosUkrEnergo as Ukraine's only reliable source of natural gas.
The letter of attorney was granted by Firtash to Boyko on Dec. 13, 2005, and was valid through July 1, 2006, according to a photocopy of the paper published by the newspaper.
"Such letter of attorney really exists," Kostiantyn Borodin, Boyko's spokesman, told the newspaper. "It has been issued exceptionally because Boyko, at Dmytro Firtash's request, had been representing him in the divorce with Maria Firtash. It was exactly for this role that the power of attorney has been issued in the name of Boyko to dispose of all assets of Dmytro Firtash."


The revelations also underscore the close personal relationship between Boyko and Firtash that may well explain Boyko's attempts to defend RosUkrEnergo as the only gas supplier to Ukraine.

Dmytro Firtash has reportedly settled his divorce with Maria in January 2006. Maria, who now lives in Israel, has apparently received a $36 million settlement, according to the divorce agreement, Ukrayinska Pravda reported.

However, the divorce dispute resumed earlier this year when Maria had demanded 50% of Dmytro Firtash's assets. She claims that Dmytro Firtash only in April 2006, four months after the divorce had been settled, had disclosed that he also owns a 45% stake in RosUkrEnergo.

RosUkrEnergo, 50% of which is now owned by Gazprom, Russia's gas monopoly, has been for two years refusing to disclose its true beneficiaries since the summer of 2004 when it had been created.

LEvko thinks PoR would probably like to ditch Boyko [who is not Donetskiy] before the elections, but this would not reflect too well on the current Yanukovych government..and he most likely has influential friends 'up North'..

1 comment:

David said...

so what's the political fallout going to be?

Can PoR spin this sort of revelation in the east? Or do people there get so little info or are too fatalistic or self-centered on their "bribe" that it shd not matter too much? Or will the bribe prices simply go up?

dlw