Kolomoisky made millions selling Russian coal to state company in Ukraine, investigation alleges

Billionaire oligarch Ihor Kolomoisky, at the 16th annual Yalta European Strategy conference on Sept. 13, 2019, in Kyiv’s Mystetskyi Arsenal. He allegedly made money selling coal from Russia and Russian-occupied territories of eastern Ukraine to the state-owned energy company Centrenergo, the Bihus.info investigative news outlet reported on June 8.

Controversial Ukrainian oligarch Ihor Kolomoisky allegedly made money selling coal from Russia and Russian-occupied territories of eastern Ukraine to the state-owned energy company Centrenergo, the Bihus.info investigative news outlet reported on June 8.

Four Ukrainian energy companies — Synthesis Oil, Nafta Force, Record Systems and Azonex, where Kolomoisky owns shares and assets, made at least $11 million in profits by selling coal, imported from Russia, to the state company which provides 15% of Ukraine’s energy needs.

On May 29, the State Property Fund, which owns 78.3% of Centrenergo, installed industry veteran Oleksandr Korchynsky as general director in an attempt to block Kolomoisky’s influence in the company, where he allegedly exerted control through friendly management.

Media have linked the previous director, Volodymyr Potapenko, who was installed last year, to Kolomoisky, which allegedly allowed the oligarch to profit from Centrenergo.

Kolomoisky told the Kyiv Post that it was “a well-known fact that Centrenergo was buying Russian coal” but he has nothing to do with it, despite having investments in Synthesis Oil, one of the companies reselling the coal.

“I don’t know the beneficiary owner of the other companies, and I have nothing to do with it,” he said.

According to Bihus.info, the Russian coal sales in question took place between July 2019 and April 2020, prior to the change in management.

In one of the transactions, Kolomoisky’s companies bought Russian coal for $75 (Hr 1,957) per ton in December 2017 and resold it to Centrenergo at $82 (Hr 2,200) per ton in December 2019.

That markup on each transaction, multiplied by 1.5 million tons, resulted in over $11 million worth of profit for Kolomoisky.

Bihus.info also found out more about the suppliers. One of them was Ruslan Rostovtsev, considered to be the number two player in the illegal coal industry in the Donbas.

A report published in April 2019 by the Ukrainian NGO Stop Corruption revealed that Rostovtsev is responsible for exporting roughly a third of the coal produced in the region, equivalent to around 700,000 tons a year.

In its investigation, Stop Corruption described how this coal was transported from eastern Ukraine, across the border to the city of Rostov-on-Don in Russia, where it is repackaged, relabelled and sent to Europe as Russian coal in violations of sanctions.

The other suppliers found in the data analyzed by Bihus.info are Iskander MahmudovAndrey BokarevKonstantin Strukov Mikhail Fedyaev or Vladimir Gridin. Most of them are Russian businessmen who made their fortunes in mining and the metallurgy industry, ranked in Forbes’ list of  Russia’s richest men in 2019 and 2020.

Centrenergo scandals

The Bihus.info investigation is not the first time Centrenergo has found itself at the center of a scandal.

“In recent years, Centrenergo has become a center of corruption,” the State Property Fund told the Kyiv Post in a statement on May 30.

Previously, in 2015-2016, shell companies also made dubious purchases in Russia and the Russian-occupied territories in Ukraine. One of Centreenergo’s plants ceased operations in 2015 due to an artificial coal deficit.

After Potapenko became director, the company faced accusations of favoring Kolomoisky, buying Russian coal through a shell company at above-market prices and then selling electricity to Kolomoisky’s metallurgical plants at a loss.

Kolomoisky has denied that Potapenko is under his control, but has told reporters that Potapenko is a director he “understands.”

Kyiv Post staff writer Oleksiy Sorokin contributed to this story.



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