Pinchuk hides ac­qui­si­tion of pricey Lon­don land­mark

Kyiv Post - - National -

Grand Build­ings, a land­mark his­tor­i­cal build­ing on Trafal­gar Square in Lon­don, is se­cretly owned by Vic­tor Pinchuk, the bil­lion­aire Ukrainian oli­garch, through a chain of off­shore firms.

This fact was re­vealed by the Par­adise Pa­pers — 13.4 mil­lion leaked doc­u­ments ob­tained in 2016 by the Süd­deutsche Zeitung news­pa­per and the In­ter­na­tional Con­sor­tium of In­ves­tiga­tive Jour­nal­ists. They were shared with an in­ter­na­tional team of in­ves­tiga­tive re­porters, in­clud­ing the Wash­ing­ton, D.C.-based Or­ga­nized Crime and Cor­rup­tion Re­port­ing Project, a Kyiv Post part­ner.

The in­ves­ti­ga­tion of the leaks was pub­lished by Slid­stvo.info, an in­ves­tiga­tive show and OCCRP part­ner, on Nov. 8.

The records also men­tioned other Ukrainian top of­fi­cials, in­clud­ing Pres­i­dent Petro Poroshenko; Sergiy Olek­siyenko, a board mem­ber of Ukr­transgaz, a wholly-owned sub­sidiary of the state oil and gas com­pany Naftogaz; and Ser­hiy Ki­valov, a mem­ber of the Op­po­si­tion Bloc fac­tion in par­lia­ment.

Pinchuk ob­tained the of­fice build­ing, worth hun­dreds of mil­lions of dol­lars, and a smaller build­ing nearby as part of a set­tle­ment in his law­suit against fel­low Ukrainian bil­lion­aire oli­garchs Ihor Kolo­moisky and Hen­nadiy Bo­golyubov in 2013.

Nei­ther Pinchuk nor Kolo­moisky agreed to com­ment on the leak, cit­ing a con­fi­den­tial­ity clause in their agree­ment.

Pinchuk and the two part­ners clashed in the High Court in Lon­don over the Kryviy Rih Iron Ore En­rich­ment Plant, a ma­jor ore min­ing com­pany in Dnipropetro­vsk Oblast, which was pri­va­tized in 2004 for $40 mil­lion.

Pinchuk, now Ukraine’s fourth rich­est man, with a for­tune was es­ti­mated at $1.3 bil­lion by Fo­cus mag­a­zine in 2016, claimed that his part­ners breached a con­tract and trust by fail­ing to place the ma­jor as­set un­der his own­er­ship.

He in­sisted that Kolo­moisky and Bo­golyubov served as prox­ies for him­self. As the son-in-law of thenUkrainian Pres­i­dent Leonid Kuchma, an au­to­crat who ruled from 1994– 2005, Pinchuk couldn’t pri­va­tize the plant him­self. Kolo­moisky and Bo­golyubov were sup­posed to pri­va­tize the plant and se­cretly pass it to him, but didn’t do so.

He sued the pair for $2 bil­lion in com­pen­sa­tion for his stake in the plant and the profit he would have re­ceived had the plant in his pos­ses­sion. Pinchuk claimed that he had paid $143 mil­lion for shares he never re­ceived, ac­cord­ing to the court pa­pers.

How­ever, in 2016 the trio set­tled their dis­pute days be­fore the hear­ings were to start. The de­tails of the set­tle­ment were con­fi­den­tial, and no one knew what Pinchuk re­ceived to drop the case. But it’s not a se­cret any­more. Ac­cord­ing to leaked emails from Ap­pleby, an off­shore in­ter­na­tional law firm based on the Isle of Man, and Pinchuk’s lawyers from the Bri­tish law firm Ho­gan Lovells, the lawyers in early 2016 — days be­fore the set­tle­ment — re­quested the open­ing of a se­ries of bank ac­counts so that Bo­holyubov and Kolo­moisky could trans­fer money to Pinchuk. The ex­act sums are un­known.

A few days after the dis­pute be­tween the oli­garchs was set­tled, Ap­pleby re­ceived an­other email from Ho­gan Lovells. They claimed that the par­ties had agreed to give Pinchuk two valu­able Lon­don prop­er­ties in ad­di­tion to the money. In the leaked data, they ex­plained that the prop­er­ties had been reg­is­tered by off­shore com­pa­nies on the Isle of Man, but would have to be re-reg­is­tered to a new owner, and so they needed to set up a trust on the Is­land of Jersey that would take over own­er­ship of the build­ings.

One of the two prop­er­ties was a mul­ti­mil­lion-dol­lar of­fice block over­look­ing Hyde Park at 27 Knights­bridge in Lon­don’s Bel­grave Square. It was worth more than 75 mil­lion pounds as of the end of 2015.

The other build­ing is the lux­u­ri­ous Grand Build­ings on Trafal­gar Square, over­look­ing Nel­son’s Col­umn and serv­ing as the head­quar­ters for sev­eral com­pa­nies. It also houses a num­ber of restau­rants and bou­tiques. The In­de­pen­dent re­ported in 2013 that Bo­golyubov orig­i­nally paid 173 mil­lion pounds for the build­ing in Au­gust 2010, buy­ing it from Dubai-based in­vest­ment firm Istith­mar.

Ac­cord­ing to Slid­stvo.info, both build­ings are owned by a chain of off­shore com­pa­nies that leads to a trust on the Is­land of Jersey.

BY OLENA GONCHAROVA GONCHAROVA@KYIVPOST.COM

Grand Build­ings, for­merly the Grand Ho­tel, a land­mark his­tor­i­cal build­ing on Trafal­gar Square in cen­tral Lon­don is se­cretly owned by Ukrainian bil­lion­aire Vic­tor Pinchuk. (AFP)

Ukrainian bil­lion­aire Vic­tor Pinchuk. (Volodymyr Petrov)

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