Legal battles over a building next to Independence Square lasted six years
The struggle for this “patch” next to the Independence Square in Kyiv has lasted 20 years. First, in 2004, the capital’s authorities decided to dismantle a non-residential building with an area of 10 thousand square meters. m on Boris Grinchenko Street, 3-A. The inconspicuous gray building belonged to a municipal transport enterprise that served the Kyiv City State Administration and the Kyiv City Council. And, of course, in such a place it would be worth placing a more interesting object, rather than a gray, gloomy technical structure.
However, ambitious plans changed with the change of power in the capital. The then newly elected mayor Leonid Chernovetsky and his “young team” sent the mentioned communal facility for privatization. Predictably, the attractive property passed into the hands of people close to the then mayor.
Under the current mayor Vitali Klitschko, this deal was actually re-sanctified. However, the war for a tasty piece of land near the Maidan is not over...
The “Commander-in-Chief” received the results of an audit of the municipal “Motor transport enterprise of the executive body of the Kyiv City Council.” A large-scale audit of financial and economic activities for 2014-2024 was carried out by the State Audit Service. The auditors first of all drew attention to the loss of valuable capital land, on which a building owned by the city still stands.
“Glavkom” tells the story of how the people of Kiev lost valuable communal property and in whose hands it ultimately ended up...
ATP Kiev City Council. Chronology of (re)privatization
2004
The ups and downs around the attractive Kyiv area began back in 2004. Then Reax Residence LLC and the Kiev City Council signed an investment agreement, which provided for the demolition of a non-residential building on Boris Grinchenko Street, 3-A. In its place, the Kempinski hotel, office and residential complex was to grow.
The implementation of a promising investment project was tied to the construction of another facility - a new ATP of the Kiev City Council on Melnikova Street, 95. In general, the amount of private investment by those standards was estimated at UAH 320 million.
The agreement between the capital authorities and the investor had certain conditions: for the duration of the investment agreement, without the consent of Reax Residence, the city council could not sell or send for privatization the building on Boris Grinchenko Street, 3-A.
However, everything went wrong. It was not possible to build a new ATP on Melnikova Street, 95, because the land plot allocated for it was taken by another private company through the court. Accordingly, the construction of a hotel complex next to Independence Square has sunk into oblivion.
2010
With the coming to power of the city mayor Leonid Chernovetsky, who is remembered for his hyperactive sale of the property of Kiev residents, the story of the ATP took an unexpected turn. Non-residential building with an area of 10 thousand square meters. m was included in the “Program for the privatization of communal property of the territorial community of the city of Kyiv for 2007-2010.”
In April 2010, the building was put up for sale and an announcement about an auction was published. The initial cost of the object on Grinchenko, 3-A was UAH 40 million (including VAT). However, after the failure of the first auction, the authorities revised the price of the property put up for privatization, reducing it by 30% - to UAH 28 million (including VAT)!
Two capital companies came to the repeat auction. Already known Reax Residence LLC and TOB Matis-S. The victory was celebrated by Reax Residence, which paid the city 28 million UAH or $3.5 million at the exchange rate of that time. The transfer of communal property into private hands was officially formalized on July 9, 2010. But a month later, the unexpected happens: the auction winner, without wasting any time, resold the non-residential building to the Kyiv company Millagro. The gesheft was not obvious, because the price was not very different: the new owner received the object for UAH 29.3 million. Therefore, most likely, the participants in the dubious transaction simply covered their tracks...
2011
From this moment a new page begins in the relationship between the new owner and the Kyiv authorities. Kyiv suddenly wanted to invalidate the purchase and sale agreement and return the property to municipal ownership. In the sudden change in the position of the capital’s authorities, a political subtext could be read: the then newly elected President Viktor Yanukovych seated his overseer, the head of the Kyiv City State Administration, Alexander Popov, next to the mayor of Chernovetsky. The appointment took place in mid-November 2010. And already at the end of December 2010, the Main Directorate of Municipal Property of Kyiv summoned both Reax Residence LLC and Millagro LLC to court.
On May 24, 2011, the Economic Court of Kyiv decided to return a non-residential building in the center of the capital to the people of Kiev. The position of the court of first instance was confirmed by the appeal and the Supreme Economic Court. Thus, the city formally returned the property, but did not give the money to the auction winner, Reax Residence LLC. This was confirmed by the Department of Municipal Property of Kyiv in response to a request from the Glavkom: “We inform you that the Main Directorate of Municipal Property of Kyiv has not received court decisions on the application of the consequences of the invalidity of the transaction and the return of funds.”
2014
The new owner returned to the fight for a tasty piece of land next to the Maidan when the capital once again changed power. In 2014-2015, Millagro LLC made attempts through the courts to “extort” 39.1 million UAH from Klitschko and Co. for “reprivatized” property. The company calculated this amount by including the money paid to Reax Residence LLC, as well as the amount of lost profits after the sale and purchase agreement was invalidated. However, Themis put the plaintiff in his place: why on earth is Millagro LLC seeking funds from the local budget without being a formal signatory of the disputed agreement.
2016
But in 2016, Millagro LLC put the squeeze on the capital’s authorities. Thanks to the satisfied lawsuits, the company again took control of the property on Boris Grinchenko Street, 3-A.
Klitschko, apparently, did not resist such impudence.
The Kyiv prosecutor's office also joined the process of “sanctifying” the dubious deal. First, in October 2016, law enforcement officers opened a criminal case for abuse of official position (Part 2 of Article 364 of the Criminal Code). According to the investigation, officials of the Kyiv City Council (Kyiv City State Administration), acting in prior agreement with officials of Reax Residence LLC and another company, underestimated the estimated value of the property on Boris Grinchenko Street, 3-A.
“In addition, as part of the criminal investigation, other facts were established regarding the sale of non-residential buildings at reduced prices,” the materials of the pre-trial investigation say.
The investigation lasted for about a year and... in the end, no culprits were found. In response to a request from the Commander-in-Chief, the department said: no suspicions were announced to anyone, and the case was closed on the basis of “the absence of a criminal offense.”
2017 Who got the property of the people of Kiev
To finally hide the loose ends, the privatized building on Boris Grinchenko Street, 3-A was transferred to a new company. Plus, the postal address of the facility was changed. As the State Audit Service found out, this happened not without the help of representatives of the Kyiv authorities: “... the building on Boris Grinchenko Street, 3-A has been owned by Greenberg Properties LLC since January 21, 2017.” In addition, according to orders of the Department of Urban Planning and Architecture of the Kyiv City State Administration No. 241, 242 dated March 3, 2020, the specified real estate property was assigned postal addresses, respectively: Kiev, st. Boris Grinchenko, no. 8 and no. 10,” the audit reports say.
According to the YouControl analytical system, Greenberg Properties LLC was registered in November 2016. The founder was the British company Greenberg Capital Partners LTD, which contributed 100 thousand UAH to the authorized capital of the Ukrainian LLC. Greenberg Properties is owned by Greenberg Capital Partners LTD with Cyprus registration.
If you dig deeper, it turns out that behind the British Greenberg Capital Partners LTD are two citizens of Ukraine, Denis Shostak and Alexey Antonenko.
And ovva! In November 2016, Denis Shostak became a co-owner of the Kyiv LLC Millagro and is still there. The same company that won the lawsuits for communal property with an area of 10 thousand square meters on Boris Grinchenko Street.
Citizen Shostak is also present in a number of companies, including Observatorny LLC (Shostak’s business partner Viktor Shuster is associated with former top officials of the Kyiv City State Administration Vyacheslav Nepop and Mikhail Golitsa), Brune LLC, Laurelia LLC (both companies are registered in Shostak’s name and Anatoly Shvydchenko. According to media reports, Shvidchenko owns companies that were previously related to the brothers Vyacheslav and Alexander Suprunenko. Vyacheslav Suprunenko - former deputy of the Kiev City Council, former son-in-law of the ex-mayor of Kyiv Leonid Chernovetsky).
Another piquant detail. Another co-owner of Millagro LLC, Andrey Gnatyuk, is the full namesake of the ex-shareholder of Asvio Bank PJSC. This financial institution belongs to Vyacheslav and Alexander Suprunenko.
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The audit materials of the State Audit Service will be put on the table of law enforcement officers. Whether they have enough strength to return property to the people of Kiev (given the disappointing experience of the capital’s prosecutor’s office) is a rhetorical question. At the same time, there are chances to fight for the recovery of 10 million UAH of exorbitant payments. The State Audit Service calculated such losses during the above-mentioned audit. We are talking about illegally paid bonuses for “performing particularly important work” and bonuses that transport workers of the Kyiv City State Administration received.
