Page 11 - bne_May magazine 2023_20230503 BRICS

bne May 2023 Companies & Markets I 11
the attack and seizure of Smart Holding’s assets and says her suspicions were raised after a number of international investors approached her and offered to buy the company at a knock-down price.
“These were international investors, they said, who wanted to buy the gas business. We checked them out, but these are not strategic investors in the oil and gas business and did not represent any company,” Kiryanova told bne IntelliNews. “Only one of them came up as a former manager at an international oil and gas company, yet they knew the Ukraine gas business very well.”
Negotiations have been ongoing, with the last call on the day of the raid.
“They told us that “we need to do a deal quickly,” and warned that there would be a raid as part of the criminal investigation. I refused and two hours later the raid happened,” says Kiryanova. “It looks like it was a carefully planned operation.”
No property rights
“There are no property rights in Ukraine,” says Kiryanova.
“In the matter of a few days all our assets were seized and the company unable to operate. There were no court cases and no way to defend ourselves from the allegations.”
Smart Holding already has one publicly listed company –
AIM listed Enwell Energy – and Kiryanova says it has been meticulous about filing its accounts and paying its taxes. Moreover, she points out that Smart Holding has continued to meet its payroll during the war out of a sense of patriotic duty.
“We are one of the most transparent companies in Ukraine and I have gone out of my way to promote the country, to bring foreign investors here, whenever I could,” Kiryanova told bne IntelliNews.
As he has got more involved in the church, Novynskyi has been winding down his involvement with the business over the last few years. The trusts were set up so that he could remove himself completely, but leave in place a structure,
based on the Cypriot lawyers, that would take care of the business and ensure a smooth transition to his heirs in the future. The trusts were registered with Ukraine’s Ministry of Justice and all their paperwork accepted.
“The trusts are governed by Cypriot law but now the authorities say Novynskyi is the actual owner again,” says Kiryanova. “The government is disregarding its own law and that of international law. We have been investing into Ukraine’s gas business, but now there is no rule of law. You cannot protect yourself at all. A criminal case was initiated without any substance and now all the assets are frozen.”
What will happen next is the Smart Holding assets will probably be placed under the supervision of ARMA, the asset recovery and management agency of Ukraine, which has the power to arbitrarily assign the management of seized assets to anyone it likes, says Kiryanova.
In the past, amongst other things, ARMA was charged with corruption in divesting large land plots in Odessa for no price to a no-name buyer following expropriation of land plots from AUCHAN based on criminal investigation unrelated
to the company.
“We can go to court to prove we were not wrong, but everything we had is gone already,” says Kiryanova.
The company’s recourse is to sue the Ukrainian government, as the holding companies for its assets are in
“We can go to court to prove we were not wrong, but everything we had is gone already”
countries like UK and the Netherlands. Ukraine has signed investment agreements with these countries that guarantee property rights
“We have to protect our rights and, unfortunately, we
have no other choice than address the claims to the Ukrainian government,” says Kiryanova. “Now it is some corporate raider that will benefit from this, but it will be the government that is liable.”
Smart Holding’s problems come in the same week that famous US investigative journalist Seymour Hersh released another bombshell investigation that claims that Ukraine’s president Volodymyr Zelenskiy's administration has siphoned off $400mn of US aid into its own pockets to buy diesel fuel and accuses the Ukrainian government of being deeply corrupt.
Kiryanova says she is certain that Smart Holding’s problems
www.bne.eu