April 27, 2006

Ukraine businessmen are mystery gas firm’s owners

Moscow (Reuters) – Two influential Ukrainian businessmen are the previously undisclosed owners of a one-half stake in RosUkrEnergo, a mysterious company that controls Ukraine’s gas imports, Austria’s Raiffeisen Zentralbank said on Wednesday.

The bank confirmed a report by the Izvestia daily that Dmitry Firtash — who in the past played a role in importing gas from Turkmenistan to Ukraine and owns a Kiev basketball club — and banker Ivan Fursin were the beneficial owners of the stake.

Raiffeisen had previously said that it held the stake as trustee but had not revealed the identify of the real owners.

RosUkrEnergo bounced into the public eye when it was named as the middleman in a deal to resolve a gas pricing dispute between Russia and Ukraine which interrupted supplies to Europe over the New Year.

Russian state gas monopoly Gazprom owns 50 percent of Swiss-registered RosUkrEnergo, while Austria’s Raiffeisen Investment AG controls the other half on behalf of the beneficial owners.

Firtash, who according to media reports spends most of his time in Hungary, could not immediately be reached for comment. Fursin also could not be contacted.

Diplomatic and financial sources told Reuters last week that the U.S. Justice Department had opened a probe into RosUkrEnergo with which Raiffeisen had cooperated.

January deal

Izvestia, which is owned by Gazprom, published extracts from an audit report by PricewaterhouseCoopers that named the two men as the beneficial owners of Centragas Holding AG, through which Raiffeisen Investment controls half of RosUkrEnergo.

“The ultimate beneficial owners of Centragas Holding AG are Messrs. D. Firtash (90 percent) and I. Fursin (10 percent),” the audit document stated.

The Moscow office of PwC, which acts as Gazprom’s global auditor, declined to comment. PwC said its Moscow office was not responsible for the RosUkrEnergo account, which its Swiss team took over late last year.

President Viktor Yushchenko’s press service said he had previously asked security bodies to get information about RosUkrEnergo.

“The president’s press service wishes to point out that the president has previously asked security bodies to obtain all information on the founders and shareholders of RosUkrEnergo.

“Yushchenko has repeatedly said that there are no Ukrainian state bodies or officials among the owners or shareholders.”

RosUkrEnergo’s sales in 2005 were around $3.5 billion and it made profits of $500 million from the sale of around 40 billion cubic meters of gas, Raiffeisen has said.

The disclosures come as concern mounts that Ukraine — the transit route for 80 percent of Russia’s gas exports to Europe — is tolerating opaque gas deals, even after the “Orange Revolution” of 2004, that jeopardize regional energy security.

Ukraine’s state energy company Naftogaz has struggled to pay for gas imports since the January gas deal, under which import prices nearly doubled to $95 per 1,000 cubic meters.

Naftogaz has been unable to pass on the gas price hike to consumers and, according to local media reports, ran up losses of at least $500 million in the first quarter of 2006.

Gas barrier

Following elections last month, Ukraine’s erstwhile Orange Revolution allies are struggling to pull together a coalition, but gas could yet pose a barrier to forming a government.

Yushchenko’s ex-Prime Minister Yulia Tymoshenko — who lost her job last September after calling RosUkrEnergo a “criminal canker” — wants her old job back but also wants to tear up January’s gas import deal.

Firtash also figures prominently in a recent report by Global Witness, a nongovernmental organization which campaigns against corruption involving natural resources, on the structures through which Turkmen gas has been sold to Ukraine.

Zeev Gordon, an Israeli lawyer, said Firtash had instructed him in late 2002 to set up a Hungarian company called Eural Trans Gas, which controlled Ukraine’s gas dealings with Turkmenistan before RosUkrEnergo took over.

Gordon told Reuters he acted as a trustee shareholder in Eural Trans Gas before the shares were sold in 2003 but has had no dealings with Firtash since.

Gordon also confirmed that Firtash is acquainted with Ukrainian-born Russian businessman Semion Mogilevich, whom he represents, but repeated earlier denials by Mogilevich of any involvement in RosUkrEnergo or Eural Trans Gas.

“I spoke to him (Mogilevich) today, and he said: ‘It is not mine and I am not connected to it’,” Gordon said.

Mogilevich, who is wanted by the U.S. Federal Bureau of Investigation for suspected racketeering, fraud and money laundering, was also investigated by Tymoshenko’s administration, before she lost her job, to determine whether he was behind the Ukrainian side of RosUkrEnergo. (Additional reporting by Boris Groendahl in Vienna)