Cote d'Azur: How Lyovochkin’s villa near Nice led to the deal with Ukrtelecom

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An elite corner of the French Riviera in France. Near the villa/museum of Baroness Beatrice Rothschild, in a quiet bay on the Meditterranean Sea, there is the small town Saint-Jean-Cap-Ferrat.

Here, two great beneficiaries of Ukrainian corruption, Serhiy Lyovochkin and Dmytro Firtash, settled a couple dozen meters from each other.

Firtash has never held public office, even though for many years he has closely cooperated with various presidents and prime ministers, while Lyovochkin, on the other hand, has been a state official for more than 10 years, though the villa belonging to him has not been registered in any of his declarations. 

The rhythm of life and low payroll of state officials does not give Lyovochkin any legal possibility to earn enough for such a property. That is probably why Lyovochkin’s mansion at Saint-Jean-Cap-Ferrat is registered through a chain of proxy companies in Denmark and Luxembourg with citizens from Cyprus as nominal directors.

However, in the course of an investigation into Lyovochkin’s undeclared property near Nice, the author of this article came upon a much broader scope of inquiry. Specifically, this was about his connections to the company that privatized Ukrtelecom in a corrupt manner during Yanukovych’s time as president and also to his connection to gas intermediary RosUkrEnergo, which appeared at the intersection of the corrupt interests of Ukraine and Russia. 

Story 1. Sanctions list

March 2014. A week after Yanukovych’s regime fell, the European Union instituted sanctions against the people closest to the former president.

Very few knew how the EU sanctions list was formed. As it turned out later, the list of "Ukraine’s enemies" was complied not in Brussels, but in Kyiv. The Council of the European Union only ratified what it received from Ukraine’s new officials.

The full list of people that international sanctions should be applied to was prepared by the General Prosecutor of Ukraine, which was headed by Oleh Makhnitskiy and sent to the High Representative of the European Union Catherine Ashton on March 3, 2014.

On the list, there were 18 names of Yanukovych’s inner circle. In a month, they added four more people to the list when the General Prosecutor sent another letter to the European Union.

Due to strange circumstances, the list did not contain any of Yanukovych’s friends who were part of the informal RosUkrEnergo clan – not Serhiy Lyovochkin, not Dmytro Firtash nor Yuriy Boyko. There was no space even for such small players like Yevhen Bakulin and the Katsuba brothers.

A possible explanation for this selectivity could be that Makhnitskiy, the first post-Maidan general prosecutor, was dependent on Ihor Kryvetskoho, gray cardinal from the Svoboda political party, who in turn, had joint business interests with Firtash in the real estate sphere.

The cost of this "favor" for avoiding the EU sanctions list is hard to overestimate. Unlike many of the names on the sanctions list, whom the EU punishment would not affect that much since they did not own assets in Europe, Lyovochkin and Firtash would run into serious consequences if they ended up on the EU’s blacklist. That is because they own many properties abroad.

The moment was lost and all participants of the Ukrainian RosUkrEnergo political clan avoided even the smallest punishment.

Lyovochkin and Boyko are now MPs who from time-to-time threaten to conduct pre-term elections in spring 2016. Firtash is under investigation in the U.S.A. in a case not related to Ukraine. In 2015, he managed to avoid extradition to the U.S.A. by getting a resolution in his favor in a first instance court in Vienna.

There was a chance to apply international sanctions against Yanukovych’s inner circle only during the first weeks after the change in government. Then, the European Union took a step toward Ukraine and agreed to apply limitations on people who could have been connected to the theft of state property during Yanukovych’s tenure.

Since April 2014, no people have been added to the sanctions list, though some have been removed. That is why today there is no way to include Lyovochkin, Firtash or Boyko on the existing sanctions list. The only possibility is for Ukrainian law enforcement to start an investigation and to go to foreign countries to ask for legal help.

Story 2. Firtash’s "French Riviera"

After the breakup of the Soviet Union, former Russian President Vladimir Putin and his inner circle had country houses on the Karelian Isthmus, which were joined together into the "LakeCo-op."

A similar co-op was organized by Firtash and Lyovochkin on the most expensive land in Europe – the French Riviera. These two owned land lots and villas in the town Saint-Jean-Cap-Ferrat.

Firtash’s villa is covered with greenery. It is called La Mauresque and occupies two addresses – 52 Charles DeGaulle Boulevard and 48 Bellevue Avenue. 

This luxurious mansion, worth EUR 49 million, with a garden, swimming pool and tennis court, is registered to the company LM Holdings. According to documents in the possession of this journalist, the assignor (UP: person who gave up their rights) was the director of many of Firtash’s companies, Robert Shetler-Jones and another Briton, David Brown, while the assignee (UP: person who was the legal successor) was Dmytro Firtash himself.

One of the previous owners of Firtash’s villa on the French Riviera was writer Somerset Maugham, according to local residents. One of the locals, Monine Lutun, while walking her dog, said that you would never see Firtash out on the street and the residents of the house are not friendly and are secretive.

Even though Firtash’s "business" has always been connected to the loyalty of officials to him, he has never worked in elected or state positions and has never had to declare his property.

This is unlike his companion, Serhiy Lyovochkin.

Right next to Firtash’s building, right outside the fence, there is the building of the former head of the presidential administration, former first presidential assistant and former secretary of the Cabinet of Ministers’ Secretariat, Serhiy Lyovochkin.

Story 3. Lyovhochkin’s "French Riviera"

Lyovochkin’s villa is not just the visual embodiment of where money earned over decades in Ukrainian politics has been invested.

It is a chance to track offshore companies and trace Lyovochkin’s involvement in other big scandals, such as those involving RosUkrEnergo and Ukrtelecom.

First, there was a photograph on the social network Instagram.

Lyovochkin’s daughter published a picture of their family holiday last year. The picture did not capture anything other than a special fence and a street light. The fact that Lyovochkin has property in Saint-Jean-Cap-Ferrat had been a rumor among Ukrainian businessmen and politicians for a long time.

This is the villa from which Lyovochkin’s daughter Olena posted a picture of their family holiday on Instagram one year ago.

Knowledgable people, who preferred to remain anonymous in this story, narrowed our search focus to a specific part of the peninsula. Then we searched using Google Street View in order to find a similar exterior.

We found Lyovochkin’s luxurious villa at 56 Charles DeGaulle Boulevard in Saint-Jean-Cap-Ferrat.

Let’s move on to the cadaster located in the mayor’s office in Saint-Jean-Cap-Ferrat, where a friendly employee uncovered the mysteries of the secret property of the former head of Yankovych’s presidential administration.

As it turned out, Lyovochkin owns five land lots united on one territory and postal address. Here, we also found information about the owner. Lyovochkin’s property is registered to Danish company Glorietta Investments I APS. 

Story 4. From the French Riviera to Copenhagen

The building in Cap Ferrat, which belongs to Lyovochkin today, has a story.

It first belonged to a family of entrepreneurs who specialized in sea freight transportation and later to German businessmen who specialized in the production of weapons. A few years ago, it ended up in the hands of the Ukrainian official, who had been in power for many years and was the one who had been building the authoritarian regime together with Viktor Yanukovych.

At first, the house was owned by Dutch company Glorietta Investments Amsterdam BV, which is no longer active.

In November 2005, the property was re-registered to Danish company Glorietta Investments APS, which changed its name to Glorietta Investments I APS in February 2014. 

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The Danish registries were a great source of information. Through them, we managed to gain access to a report prepared by auditors for an annual shareholders meeting in May 2015.

On page 14 of this report, there is proof that Glorietta Investments I APS really owned property in France with an astronomical value of EUR 40 million. This is the value of the building owned by Lyovochkin in Saint-Jean-Cap-Ferrat.

On the next page, it also says that since the property is located in France, taxes on it are also paid there since the company has no activity in Denmark that could be taxed. 

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According to its statutory documents, Glorietta Investments I APS has a single founder. It is Boutifour SA, which is registered in Luxembourg.

It was also possible to find out the date that Lyovochkin purchased that building at Cap Ferrat.

It turns out that on June 8, 2011 there was a simultaneous change in directors at both the Danish and Luxembourg companies.

The purchase of the property took place one week before Lyovochkin’s birthday.

On that day, the directors of Danish company Glorietta Investments I APS became two Cypiots – Audriana Pias and Xenia Georgiou. Both of them are registered in the capital of the island country Cyprus. We found this information out from an excerpt on the company Glorietta Investments I APS. 

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On that same day, on June 8, 2011, changes took place not only to the directors of the Danish company, but also to the Luxembourg company.

The managers of the mother company Boutifour SA became three Cypriots - Androula Zavalli Teves, Ioanna Sotiriou and Amal Sarout Lambrou. This information was registered at Memorial, the official journal of the Grand Duchy of Luxembourg.

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Story 5. French Riviera – Copenhagen – Cyprus – Ukrtelecom

The new appointed directors of Lyovochkin’s companies, Audriana Pias and Xenia Georgiou, would turn out to be the key to continuing the investigation.

Because of Lyovochkin’s building on the French Riviera, it was possible to make an entire map of his interests, which had previously been concealed.

In this way, uncovering the nominal directors of his companies, under whom Lyovochkin’s villa was registered, led us to discover the participants of the shady privatization of state giant Ukrtelecom during Yanukovych’s tenure.

The competition for that company was announced in October 2010, eight months after Yanukovych was elected president. The only application was from the company ESU, which due to the lack of alternatives was announced the winner. The deal to purchase Ukrtelecom for UAH 10.5 billion was signed on March 11, 2011, one year after Azarov’s government was formed.

It was still unknown until today who was behind that buyer. On December 3, 2010, 17 days before its application to participate in the privatization of Ukrtelecom, ESU changed its owner so that 100% of all shares ended up in the hands of Cypriot company Epic Telecom Invest Ltd, which was created two weeks earlier.

Now, just like in a kaleidoscope, new names have started appearing from the statutory documents of the Danish company that owns Lyovochkin’s villa on the French Riviera.

Epic Telecom Invest Ltd exists today under a different name. On December 19, 2013, three years after its application for Ukrtelecom was sent, it changed its name to Raga Establishment Ltd (same registration number in the Cypriot registry #HE 276881). 

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Let’s look at the data from the Cypriot registry on Raga Establishment Ltd.

One of the directors of this company is the director of the Danish proxy company that owns Lyovochkin’s villa in the French Riviera - Audriana Pias. The other director of Raga/Epic is Georgia Georgiou, sister of Xenia Georgiou, who together with Pias is the second director of the company that owns that villa.

This means that the same people simultaneously head the company that owns Lyovochkin’s house in Saint-Jean-Cap-Ferrat and the company that "won" the privatization of Ukrtelecom during Yanukovych’s tenure. There is more.

Story 6. French Riviera – Cyprus – Clearing House

The Georgiou sisters’ names appear in companies leading to Lyovochkin many more times. Besides the fact that they are directors of companies that own the villa and purchased Ukrtelecom, these sisters also appear in the Lyovochkin family bank, Clearing House.

According to an official response from the National Bank of Ukraine, Yuliya Lyovochkina, sister of Serhiy Lyovochkin, officially identified herself as the ultimate beneficiary of this financial institution.

One of the companies that Lyovochkina recognized as her property as part of the structure of the distribution of shares of the bank Clearing House is called Utelo Holdings Ltd.

The secretary of Utelo Holdings Ltd is the same Georgia Georgiou, who was also the director of the company that privatized Ukrtelecom; her sister Xenia Georgiou is the director of the company that owns Lyovochkin’s villa. 

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You can ask: So what about Serhiy Lyovochkin himself?

Until recently, he officially recognized that he was the owner of just one company – Cypriot company Oskaro Investments Ltd.

Back during Viktor Yanukovych’s time in power, he said that he had the rights to this company. The director of Oskaro Investments Ltd was Maria Shuftas, who together with Georgia Georgiou, works at the aforementioned Utelo Holdings Ltd, which holds shares for Yuliya Lyovochkina in the bank Clearing House, both directly and through the company Intrade. 

Story 7. Ukrtelecom - Firtash

As mentioned above, the privatization of Ukrtelecom in 2010 happened in a non-transparent fashion without any competition.

The only participant and winner was the company ESU, which was owned by unidentified Cypriots. It was never known who were the first beneficiaries of Ukrtelecom’s privatization.

Some sources said that it was a "pool" of oligarchs and corrupt officials. Different people gave different names, including Yanukovych, Akhmetov, Firtash and Lyovochkin, who all "chipped in" and bought Ukrtelecom, including with financing from Oshchadbank. At least these people appeared on Ukraine’s requests to some European countries to ask for legal assistance with finding the ultimate beneficiaries of ESU.

Later, in 2013, shares of ESU were fully transferred to Rinat Akhmetov.

The author of this article has a document prepared by the oligarch’s own organization, Bureau of Economic and Social Technologies, for its boss where it explored different variants and mentioned Firtash as the seller of Ukrtelecom.

When Akhmetov was getting ready to buy Ukrtelecom from the previous mysterious owners that privatized it, the PR headquarters of the richest Ukrainian launched an entire project called Jupiter, which was supposed to explain the entire transaction to the public.

In the chapter "Existing reputational risks," the authors of the report mentioned that there was a suggestion of bringing to the public the story that "Firtash was the seller." "This information could be interpreted as the non-transparent transfer of assets from the pocket of one close person to the president to another," said the document. 

Today, the saga of Ukrtelecom is the only one wherein a court case was started with Yanukovych in absentia and upon which Interpol announced its search for him.

Yanukovych was charged with giving an order, according to which ESU made the country responsible for a special communications network. The price of the issue was pretty high – UAH 220 million, almost USD 30 million at that time.

Thus, in order to remove responsibility for spending UAH 220 million on the development of the network from the company, according to case materials, "Yanukovych participated in a criminal conspiracy" with other top officials and managed to make changes to the budget of Ukraine.

After that, the responsibility for this UAH 220 million fell on the citizens of Ukraine.

People from Lyovochkin’s inner circle, Heorhiy Dzekon and Illya Solodovskiy, were moved out of danger. There were initially charged as suspects, but were later removed from the search list.

Story 8. Lyovochkin - RosUkrEnergo

Besides revealing Lyovochkin as the one behind the privatization of Ukrtelecom, his villa at Saint-Jean-Cap-Ferrat revealed one more lead.

We are talking about gas intermediary RosUkrEnergo, which for many years was a hub for paying corrupt money to politicians connected with the organization of gas deliveries to Ukraine.

When in the political arena the mysterious company RosUkrEnergo appeared, there was a lot of contradictory information regarding its owners. At first, 50% of its shares were registered to Raiffeisen Investments, but later they publicized the name of the person they represented – Dmytro Firtash.

Later, Raiffeisen Investments’ shares were re-registered to Centragas.

This company was another lead for untangling the corrupt web. The supervisory board of Centragas was headed by Robert Shetler-Jones, the nominal owner of Firtash’s villa in Saint-Jean-Cap-Ferrat.

By analyzing the directors of the companies that own the other houses on the French Riviera belonging to Lyovochkin, we have grounds to state that he had an interest in RosUkrEnergo as well.

As it is known, this gas intermediary came to the Ukrainian market during the last year of Leonid Kuchma’s presidency when Lyovochkin worked in the Presidential Administration as the first assistant of the president.

Xenia Georgiou, who was mentioned at the beginning of this article (the director of the Danish company that owns Lyovochkin’s villa on the French Riviera), was also the manager of the Cypriot company Prelux Holdings Limited, which during Yanukovych’s second stint as prime minister, was the owner of a golden vein – about 25% of the shares of RosUkrEnergo (Prelux was the shareholder of 44% of Austrian company Centragas, which on par with Gazprom owned half of the shares of RosUkrEnergo).  

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Besides that, 10% of Centragas belonged and still belongs to another Cypriot company, Grenar Enterprises, whose director is Amal Sarout Lambrou, one of the directors of Boutifour SA from Luxembourg. She owns the aforementioned Danish company, which has Lyovochkin’s property in the French Riviera on its balance.

In addition, another colleague of Lambrou, the secretary at Grenar Enterprises is our old friend Maria Shuftas, who manages the only official and public company of Lyovochkin, Oskaro Investments Ltd.

At that time, RosUkrEnergo not only supplied gas from Russia, but also sold it within Ukraine, receiving super profits of hundreds of millions of Euros.

All of the aforementioned Cypriots – the Georgiou sisters, Maria Shuftas, Audriana Pias, and Amal Sarout Lambrou – turn up in dozens of Firtash and Lyovochkin’s companies. 

They are in not only companies connected to the privatization of Ukrtelecom or the property rights of RosUkrEnergo, but others that own Firtash group’s helicopters.

Audriana Pias is director of the Cypriot company Kilchoman Ltd, which the state register of Ukraine identifies as a Firtash company, through which he owns the enterprise DF Aviation.

In addition, Audriana Pias is the director of the companies Arakua Ltd and Bokar Ventures Ltd, which in the state register of civil aircraft of Ukraine, own two premium-class Agusta AW109 helicopters (which are similar to the one that Yanukovych used during his presidency and fled Kyiv in). A colleague of hers in this company is Howard Wilson, who together with Firtash, is a director of the company Centragas.

Story 9. Political

If the reputation of Dmytro Firtash was ruined long ago, then his companion Serhiy Lyovochkin, for many years, has managed to remain in the shadows and avoid direct association with his odious bosses.

It was that way under Kuchma, who he helped as his first assistant, and under Yanukovych, whose regime Lyovochkin built with his own hands. In both cases, he presented himself as a "moderate wing" amidst his surrounding authoritarian bosses and meanwhile was building his capital, both financial, political and international.

Lyovochkin does not hide that he wants to be a prime minister of Ukraine.

He has a close relationship with U.S. Ambassador Geoffrey Pyatt and Assistant Secretary of State Victoria Nuland. He speaks English. He manages the most powerful media tool in the country, TV channel Inter and publishes in western press.

At the same time, no one should be mislead – Lyovochkin is the body and blood of Yanukovych and a person very close to him.

He was connected to Yanukovych’s family and participated in the wedding of his older son at a time when nobody even knew that last name. When the Donetsk governor, back in the 1990s, was looking for channels of influence in central Ukrainian politics, Lyovochkin became his representative in Kyiv.

While working for the state, Lyovochkin was constantly getting richer, the proof of which we can see on the French Riviera.

Understanding that this property should be inaccessible to state officials, Lyovochkin registered the property under proxy people and did not declare it. This desire to hide any traces of himself was a bad trick since through Lyovochkin’s nominal directors it was possible to trace his connections in other deals.

When in spring of this year Prime Minister Arseniy Yatseniuk visited France, he was met by the head of this country.

During his conversation with the head of the government of France, Yatseniuk decided to deviate from the framework of the traditional exchange of thoughts and half-jokingly, half-seriously suggested to the prime minister to confiscate the property of Ukrainian oligarchs on the French Riviera.

It could possibly be done only under the condition that Ukraine opens corresponding criminal cases. A request to do this will be sent by the author of this article to the General Prosecutor and the National Anticorruption Bureau. 

This material was prepared with the support of the Danish investigative journalism project SCOOP

Serhiy Leshchenko, for Ukrainska Pravda