Assets worth 7.4 billion hryvnia belonging to the disgraced oligarch Dmitry Firtash, who is under sanctions, have been seized. Also, three top managers of regional gas companies controlled by Firtash’s Regional Gas Company (RGK) group received a notice of suspicion of committing financial fraud.
Regional gas companies, previously controlled by RGK, pass into the hands of the state and are placed under the control of Naftogaz structures. Firtashev’s energy trader Ye Energy has not yet come under attack, but in general the trend is that the oligarch is losing his influence in Ukraine. Why did such a systemic attack begin on Firtash?
Firtash stole gas?
According to information from the Bureau of Economic Security and the Security Service of Ukraine, three top managers were arrested as part of criminal proceedings against the structures of Dmitry Firtash. We are talking about the chairman of the board of JSC Krivorozhgaz, who is charged with causing damage to the state in the amount of more than 202 million hryvnia, the head of the board of JSC Volyngaz, who is suspected of damage in the amount of more than 130 million hryvnia, as well as the chairman of the board of JSC Chernigovgaz. - about 220 million hryvnia.
They have been charged with theft, embezzlement or illegal taking of property through abuse of official position on an especially large scale, as well as with the laundering of criminally obtained assets.
According to law enforcement officers, Dmitry Firtash, as the de facto head of the RGC, organized an unauthorized scheme for extracting gas from the gas transportation system of Ukraine. RGK manages 20 city and regional gas enterprises, which accounts for 70% of all gas distribution networks in Ukraine.
To cover the costs of gas extraction, regional gas companies allegedly transferred funds to an enterprise controlled by Firtash in a much larger volume than was actually supplied. This allowed officials of regional gas companies to actually “withdraw” funds from the budget intended for the purchase of fuel for the population. These funds were then directed to companies controlled by the oligarch and used in his interests.
The investigation claims that there is evidence that Firtash gave instructions to the heads of regional gas companies, there was a connection between them, and the scheme for withdrawing funds was carefully planned.
For Dmitry Firtash, who is sitting in Austria awaiting extradition to the United States, such events are definitely bad news. Moreover, Firtash got into a scandal when, at the end of June, Deutche Welle reported that Firtash was trying to gain diplomatic immunity through his work at UNIDO (United Nations Industrial Development Organization). In order to avoid extradition to the United States, he received the status of adviser to the permanent mission of Belarus to international organizations in Vienna. However, the Austrian Ministry of Justice clarified that Firtash is not properly accredited with UNIDO and does not have the appropriate accreditation card from the Austrian Foreign Ministry. Thus, the government in Vienna does not consider Firtash to be subject to diplomatic privileges, including legal immunity. UNIDO also played the situation back, saying that Firtash does not have the appropriate accreditation.
“Cases against Firtash’s structures and confiscation of assets are a decision that American partners have long been waiting for, so that the oligarch would be deprived of economic and, accordingly, political influence in Ukraine. Whether he will be extradited from Austria to the United States is an open question, but the oligarch’s prospects remain bleak. For him, there is a risk of becoming a kind of second Pavel Lazarenko - a person who has lost his former influence in Ukraine, but has received problems with the laws in the States. But this is not a 100% guarantee, since the anti-oligarchic policy in Ukraine has a lot of flaws,” noted political strategist Alexey Golobutsky in a conversation with Apostrophe.
At the same time, there is a version that behind the current systemic “attack” on the disgraced oligarch there may be hidden the interest of Bankova, who is already thinking about the upcoming elections and is aiming at the electorate, which was previously in moderate pro-Russian positions.
“There are persistently very plausible rumors that representatives of the “gas workers” in the former OPZZH, led by Boyko and Levochkin, are launching a new political project with the loud name “Ukraine Above All”, aimed at the moderate “vat” electorate, which, due to the Russian invasion, is forced was to reconsider ideological guidelines. Some people on Bankova, who also have plans for these voters, do not like such activity. By attacking Firtash’s structures, the new project is, among other things, trying to deprive it of funding,” says Vitaly Kulik, head of the Center for the Study of Civil Society Problems.
Firtash and “accomplices”
At the moment, as part of the investigation into the theft of gas from the Ukrainian gas transportation system, 15 people have already become suspects. Among them are Dmitry Firtash himself, 11 heads of regional gas companies, two heads of RGK and the director of the company. Six heads of regional gas companies are in custody. For these acts they face up to 12 years in prison.
In order to compensate the state for damages, the movable and immovable property of these suspects was seized. The total amount of seized property is 246 million hryvnia. In addition, Firtash’s corporate rights worth more than 7.4 billion hryvnia were also seized.
According to a forensic economic examination conducted by the SBU, in 2021 alone, the damage caused by the activities of the defendants amounted to more than 4.2 billion hryvnia. The total damage for the period 2016-2022 may exceed 18 billion hryvnia.
The SBU and BEB announced suspicion to Dmitry Firtash and 8 top managers of his companies back in mid-May. At the same time, searches were carried out at the heads of the oligarch's companies - RGK, energy trader Ye Energy and regional gas companies.
“The question is, why did criminal cases and seizures of assets begin only in the 17th month of the open invasion of the Russian Federation? Where did they look before, when one of the financial donors of the former OPZZH continued to earn money in Ukraine, maintaining economic influence here? Considering the specifics of the “fight against the oligarchs” that Bankovaya has been waging for two years, there are fears that in the end we will just get another redistribution of the market. Over time, regional gas companies may undergo privatization, allowing only “necessary” bidders to bid,” says Vitaly Bala, head of the Situation Modeling Agency.
“Nationalization” of regional gas companies
Recently, enterprises that were previously part of Firtash’s Regional Gas Company were transferred under state control, namely: Ivano-Frankivskgaz JSC, Khmelnitskgaz JSC and Nikolaevgaz JSC.
This information was released by the Gazseti company, which is part of the Naftogaz Group and is responsible for coordinating new integrated teams, optimizing their activities, as well as forming a development strategy.
According to the message, the integration of these enterprises is the first stage in achieving the main goal - to ensure stable and efficient operation of gas distribution systems in three areas.
Previously, according to a similar scheme, the Naftogaz group included Kyivoblgaz, Zhytomyrgaz and Lvovgaz, Sumygaz, Vinnitsagaz, Dnepropetrovskgaz, as well as Kropyvnytskyi, Dniprovsky and Kharkov regional gas companies.
“There is a court decision to seize assets from RGK. Considering that the regional gas companies were engaged in the transportation and distribution of gas, the government simply had nowhere to go but to transfer them to structures that had the technical capabilities and specialists in transporting explosive substances - to the structures of Naftogaz. For end consumers, nothing will change except the name of the campaign and a slight increase in delivery rates, as prices for salaries, spare parts and fuel have increased. But such growth would have occurred anyway due to the objective economic situation and regardless of who specifically controls the regional gas companies,” energy expert Viktor Logatsky tells Apostrophe.
The fundamental point is that RGK and regional gas companies, previously owned by Dmitry Firtash, which are engaged in gas transportation and do not generate the main profit, came under attack. More substantial income comes not from the supply, but from the sale of gas to the end consumer. The sale is handled by Ye Energy, which has not yet been subject to “dekulakization”. The management of the energy trader has so far escaped with a “slight fright”, having received a fine of 36 million hryvnia from the Antimonopoly Committee.
The structure itself continues to operate and, accordingly, generate income for the final beneficiary. Perhaps the security forces simply haven’t gotten around to Ye Energy yet, but on the other hand, cases against RGK and confiscated regional gas companies continue to be heard in the courts, where no one can guarantee that Themis will not “roll back” decisions on the alienation of property oligarch or will not put the brakes on criminal cases against Dmitry Firtash and the leaders of his campaigns. Until recently, not a single oligarch had ever seriously lost in domestic courts. The final court decisions, on the one hand, will show the professionalism of the work of Group DF lawyers, and on the other hand, they will become a real indicator of whether the scandalous oligarch has retained his influence within the country.
