From the first day of the great war, Kharkov became the city that suffered the most from daily shelling. The destruction of residential, administrative and energy infrastructure has acquired terrible proportions.
The damage caused to the city has already reached $10 billion and this amount is only growing every day. The most terrible losses, of course, are the lives of hundreds of citizens who died from Russian shelling.
Despite this, Kharkiv residents, like the majority of Ukrainians, consider the greatest threat to the country’s development not so much Russian aggression as corruption in government. This fact clearly demonstrates the level of the problem that officials cannot comprehend.
In words, it seems that the Kharkov authorities understand everything. “We are maximally focused on eradicating corruption, since now, during the war, it is very important to save budget funds, and we are already taking appropriate steps,” said the mayor of Kharkov, Igor Terekhov, in April 2023.
More than a year has passed since then, but the “appropriate steps” have not been very effective. The investigation carried out by the ED showed that since the beginning of the great war, an undisputed leader in the field of fuel supplies to public utilities (CPs), which are subordinate to the City Council, has emerged in Kharkov.
Without competition or with its imitation, city utility monopolists such as Dorremstroy, Kharkovvodokanal, Saltovsky tram depot, Kharkov heating networks and others give the largest contracts for the supply of fuel. The total number of these orders is already close to UAH 1 billion.
By the standards of the fuel market, the favorite of the Kharkov authorities is a tiny retail player - it has only two gas stations. However, it seems that he has something much more important: friendly relations with the chosen one of the Kharkov mayor, which literally “know no boundaries.”
Spanish shame
In January 2024, former deputy of the Kharkov Regional Council Anna Kuznetsova, who had resigned her powers a month before, released her last declaration in this position before her dismissal.
It follows from it that Kuznetsova is a fairly wealthy woman. She owns three cars (2021 Volkswagen Touareg, 2019 Porsche Cayman and 2018 Volvo XC90), has the Hilazon Shovav venture fund (authorized capital - UAH 108.2 million), shares in Ukrainian and foreign businesses (medical centers "ON Clinic Kharkov", Doctorpro in Poland and Slovakia), which cost millions of euros and generate millions of hryvnias of income.
Where do these assets come from for the Kharkov journalist, one of whose public achievements is the last interview with Viktor Yanukovych before his flight to Russia? The mayor of Kharkov may know the answer to this question. In December 2021, 54-year-old Igor Terekhov, who was elected mayor a month before, publicly commented on his affair with Kuznetsova.
“In fact, no one ever hid anything. Our relationship has been going on for many years. Everyone knows this very well and we have nothing to hide. I have known Anya for more than ten years; we first met because she interviewed me. By the way, she is the last journalist in Ukraine who interviewed Yanukovych when he fled Kharkov.
I value her very much, I treat her very carefully. And when some kind of negativity spills out, especially during this dirty election campaign, Of course, she was worried, I reassured her, because this is the price for publicity,” Terekhov said then.
In his declaration for 2023, there are no shares in businesses. Only rented cars and 1.71 million UAH annual salary as the main income. And, most interestingly, there is not a single mention of Kuznetsova.
Does this mean their relationship is over? ED sources close to the mayor of Kharkov indicate that Terekhov and Kuznetsova are still a couple, although she has been spending a lot of time abroad since the beginning of the big war. In particular, in Spain, where since March 2022, as follows from Terekhov’s declarations, his youngest son Andrei has also lived.
Kuznetsova’s declaration also indicates foreign real estate - a residential building with an area of 137.46 square meters worth UAH 5.872 million, which she acquired on February 2, 2023. This house is also located in Spain. Where exactly? This information is not disclosed in the declaration.
In March 2023, Kuznetsova’s location became known. One of the anonymous Telegram channels published photos in which she is allegedly in the city of Cambrils, Catalonia. Three cars (two BMW X6 and Volkswagen Touareg) produced in 2020-2021 with Kharkov license plates were also included in the frame. Apparently, they did not belong to Kuznetsova.
The city of Cambrils has the reputation of a picturesque resort with 10 km of beaches on the Mediterranean coast, which is also called the Costa Dorada (Gold Coast). It also attracts wealthy tourists because there are three golf clubs on its territory.
EP decided to check the above information. At the request of the editors, journalists who have the right to travel outside of Ukraine visited Cambrils, where Kuznetsova was staying. While walking along the embankment, next to her was a woman who turned out to be the owner of one of the mentioned BMW X6s (license number AX8080AM).
Subsequently, journalists recorded a man driving another mentioned BMW X6 (license number AX8080VT). Both cars were parked near Kuznetsova’s villa, located on Carrer de Alfred Sisley street.
Considering that these same cars were photographed in Cambrils a year ago, it can be assumed that their owners are neighbors and, probably, close friends of Kuznetsova.
In the man driving the BMW X6, the ED sources recognized Kharkov businessman Konstantin Batvinov, and in the woman to the left of Kuznetsova, his wife Yana. “They are not just acquaintances or friends, but godmothers. The Batvinovs baptized Kuznetsova’s son Kirill Efremenko (born in 2006),” says an ED source familiar with the situation.
From Kurchenko to Terekhov
Konstantin Batvinov is a well-known person in the Kharkov fuel market. In 2006-2013, he served as director of a small local network of Spika gas stations, and his senior partner was then Kharkov businessman Sergei Kovalenko. By the way, Kuznetsova’s ex-husband Vitaly Efremenko at that time worked at the Spika company together with Batvinov.
At the beginning of 2013, Kovalenko and Batvinov sold Spika to the Kharkov favorite of the “Yanukovych family” Sergei Kurchenko, who registered it under his company Ernor Holdings. After that, Kovalenko got into the malt business: he opened the Altbier beer restaurant in Kharkov and founded a chain of craft beer stores.
But Batvinov, who managed to work for Kurchenko until the end of 2013 (then he headed the Spika private enterprise), remained in the fuel business. In the same year, he founded Starvid Invest LLC and Golden Standard Plus LLC in Kharkov, and at the end of 2014, Golden Standard K LLC. The latter, as further events will show, will become his most profitable asset.
In May 2015, Batvinov opened his own gas station in Kharkov with the name “Our Correct Refueling” or “Refinery”. Her design stood out from others. “At the gas station there are elements of an oil refinery, in particular pipes and valves. Its personnel are dressed in the uniform of engineers and laboratory technicians of the plant. The stele at the gas station is made in the form of a stationary production pumping machine,” the Nefterinok website described the gas station.
Subsequently, Batvinov opened a second oil refinery gas station in Kharkov, which was managed by the Stabina company he acquired in 2016. Since 2016, Batvinov’s companies, in particular Zolotoy Standard K LLC, began to participate in tenders for the supply of fuel, in particular, to utility companies in Kharkov.
At first, without much success. Utility companies, for example, Kharkov-Signal and Dorremstroy, often rejected proposals from Gold Standard K and the company received small volumes of orders compared to the then favorites of the Kharkov city hall. For example, Hozsfera LLC, which was considered close to Gennady Kernes, at that time received orders worth hundreds of millions of hryvnia.
Everything changed at the end of 2020, exactly when Terekhov became acting. O. mayor of Kharkov instead of Kernes, who first fell ill with coronavirus and then died at the Charité hospital in Germany.
According to Prozorro, in 2015-2020, at state tenders, “Gold Standard K” received contracts for only 56.6 million UAH, and in 2021, when Terekhov headed the mayor’s office, for 103 million UAH.
After a forced six-month tender pause, which began with the beginning of the great war, at the end of 2022, money began to rain on the company. It still hasn't subsided. From then until the end of May 2024, “Gold Standard K” signed contracts with Kharkov utility companies worth about UAH 1 billion.
Communal Favorite
It seems that the administrative resource owned by Terekhov could help Batvinov’s company gain a foothold in the fuel firmament. After the start of the great war, the Kharkov utility companies controlled by him began to award multimillion-dollar contracts to Gold Standard K without any tenders.
The fact is that at that time all municipalities classified as communities where hostilities were taking place, and Kharkov was among them at that time, received from the government the right to conduct purchases without a tender, bypassing the Prozorro system.
On February 25, 2023, the Ministry of Reintegration excluded the Kharkov community from the list of those where active hostilities are taking place and included it in the list of “possible military operations,” which automatically obliged Kharkov to order all goods and services through Prozorro. But the City Council found a way to continue distributing contracts manually.
This solution was a scheme with long payment periods for the delivered goods prescribed in the tender conditions. Typically, customers undertake to pay for fuel within 5-20 days after delivery and presentation of the invoice.
This is normal for a market where prices can change significantly within a week. But in Kharkov everything is different. In the largest procurements, where contracts went to Gold Standard K, this indicator was set at 60, 120, 180 or even 365 days.
Transfer of funds within 365 days from the date of delivery of goods is perhaps the most serious obstacle that discourages other suppliers from attending tenders. “Everyone understands that a stranger who enters such a tender will wait exactly a year for his money. And “their” payment will be made in a few days. This is precisely the meaning of the word “during,” explains EP’s interlocutor in the fuel market.
These words are confirmed by the analysis of almost 20 thousand fuel tenders in Prozorro for 2023-2024.
In one such tender of the Kharkovvodokanal KP in the last days of 2023 with an expected cost of UAH 85.15 million and a payment condition of up to 180 days, the only participant and automatic winner, with whom a contract was quickly signed, was Gold Standard K. In another tender dated February 2024 for UAH 5.8 million from the KP “Ritual” of the Kharkov City Council, the number of days of payment was set at 90. “Gold Standard K” won.
At tenders where other competing participants were not deterred by long payment terms, the customer came to Batvinov’s aid. For example, in August 2023, Kharkovvodokanal, at a tender for the purchase of 1.5 million liters of A-95 gasoline, refused the state company Ukrnafta-Postach, which offered UAH 66 million, recognizing the winner as Gold Standard K with a price of 71. 85 million UAH.
The utility companies actually carry out the contract signed with Batvinov’s company as an exemplary counterparty - payment occurs as soon as possible after receiving the fuel.
Thus, the Municipal Waste Management Company, based on the results of a tender that provided for payment “within 90 days,” entered into an agreement with Gold Standard K on January 17, 2024 for UAH 6.9 million. The first delivery note for the delivery of part of the fuel was received on January 24. Until April, six deliveries were made under this agreement and all of them were paid for within three to five days.
Under the terms of the tender announced in February, a potential supplier could wait 180 days for an application to supply fuel and pay for it. However, KP “Kharkovspetsstroy” already received on March 14, and on March 16 paid all 553.8 thousand UAH under the contract, completely closing the contract.
These are not individual cases, but a system. The EP analyzed data from the website spending.gov.ua to compare the terms of payment at the time of the tender in Prozorro with the dates of actual delivery and payment for the goods through the State Treasury Service.
In almost a hundred transactions in favor of Golden Standard K LLC, which are displayed on this website, the average payment period is eight days. The terms of the tenders in which they participated provided for a deferred payment of an average of 46 days. With the average NBU discount rate of 16% per annum over the past year, utility companies in Kharkov could have caused losses of UAH 20 million through premature payments.
While financial losses can still be discussed, it is difficult to ignore direct ones - due to inflated prices resulting from non-market payment terms and the actual monopolization of fuel supplies in Kharkov by one company. For example, in a non-competitive tender at the end of January with payment terms of up to two months, the Shlyakhrembud enterprise of the Kharkov City Council received diesel fuel from Gold Standard K at a price of 53.9 UAH per liter including VAT.
According to monitoring data from the Ministry of Finance website, on February 2, the retail price of diesel fuel in the Kharkov region was UAH 50.74 per liter. With a wholesale purchase through Prozorro for almost fifty million hryvnia, the cost should have been lower.
For example, the Krasnokutsky village council of the Bogodukhovsky district of the Kharkov region in the same month purchased diesel for 43.94 UAH including VAT per liter. Even if we take into account the average price at Prozorro, which in the first quarter of 2024 was 48 UAH per liter, this is still 10% less than what Terekhov’s wards buy.
Many questions for Batvinov also arise because of his participation in schemes for the sale of counterfeit fuel, recorded by law enforcement officers. He and his group of companies, in particular Golden Standard K LLC, appear in the materials of the criminal proceedings of the National Police.
Within its framework, “a group of persons was exposed who, in the territory of Kharkov and the region, by prior conspiracy among themselves, organized the illegal production, storage, transportation for the purpose of selling counterfeit fuel and established constant sales in large volumes of illegally manufactured counterfeit fuel, namely A-92 gasoline , A-95 and diesel fuel through gas station networks of well-known brands in the region under the guise of trademarks of high-quality fuel from domestic manufacturers, thereby misleading end consumers."
In 2021, investigators conducted 19 searches “at the place of residence of the defendants and at oil depots where low-quality fuel was probably produced and stored,” in particular, at Zolotoy Standard K LLC, PKF Starvid LLC, NPP Stabina LLC and other companies owned by Batvinov.
It was at his “refinery” gas stations on Lyubvy Malaya Avenue, 36-A and st. Heroes of Labor, 9-D in Kharkov, investigators made test purchases of gasoline in June 2021, which, according to the results of the examination, turned out to be a low-quality counterfeit.
Investigators found that the process of illegally manufacturing fuel consisted of mixing at so-called mini-refineries a stable fraction of gasoline with an octane number of 70-75 units (for the A-95 brand the norm is at least 95 units) with an additive and the addition of a dye to give the liquid the appropriate color . After this, the finished adulterated fuel was sent to gas stations, including those of the “Gold Standard K”.
There are several suspects in this case, but Batvinov is not among them yet. Even if that happens, in this case or another, law enforcement may have trouble bringing him to justice. According to ED sources, in October 2023, Batvinov left Ukraine through the Shlyakh system as a volunteer and has not returned since then.
During the preparation of the material, the ED asked for comments from Batvinov, Kuznetsova and Terekhov.
The conversation with Batvinov lasted about ten seconds. Realizing that journalists were calling him, the businessman answered briefly: “Unfortunately, I don’t have time. Sorry". After that he hung up.
During a five-minute conversation with Kuznetsova, her most common answer to various questions was: “This is my personal life, which I don’t want to talk about.” She refused to answer the substance of the questions raised over the phone.
The EP also tried several times to contact Terekhov, but he did not answer the calls. The mayor of Kharkov did not respond to requests for comments sent to him via SMS and WhatsApp messenger.
