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vol. 16, issue 19 May 9 Victory Day celebrations included public displays of the Soviet 150th Infantry Division flag, a popular symbol of the defeat of Nazi Germany in 1945.
Showing the flag of the Soviet Union is unwelcome in many parts of Ukraine.
Ukraine's national blue-and-yellow flag is the only one that many citizens want to see flying in the nation.
Many Ukrainians are upset that the Black Sea Fleet under the Russian flag will remain in Sevastopol until at least 2042.
May 13, 2011 The Ribbon of St. George is a Russian medal of honor commonly worn during World War II commemorations.
Seeing Red When conflicts broke out during May 9 Victory Day celebrations in Lviv, some blamed radical nationalists angered by displays of red flags steeped in Soviet symbolism. Others saw provocations by pro-Russian supporters of President Viktor Yanukovych. What is really happening? See story on page 2 and photo on page 32.
Ukrainian nationalists in Lviv clash with pro-Russian groups during May 9 Victory Day celebrations on the 66th anniversary of the defeat of Nazi Germany. Dozens of supporters of the nationalist Svoboda Party reportedly attacked a smaller group of pro-Russian activists going to a World War II memorial. Nationalists threw rocks and smoke bombs. One individual, wearing a St. George ribbon from the pro-Russian group, fired a gun with rubber bullets at the nationalists. Several people were injured, none seriously. The confrontations were triggered by the public display of Soviet-era flags and symbols, strongly opposed in western Ukraine. (Pavlo Palamarchuk)
Running out of options, tobacco companies employ dark marketing BY MA R K R AC H K E VYC H RACHKEVYCH@KYIVPOST.COM
“If you buy a pack of Camels, you’ll gain access to the lounge bar where the view is better and get to take pictures with our models,” said a scantily-clad young lady standing behind a cigarette stand at the entrance to an all-night dance
Inside:
party on March 12. The DJ party was an Urban Wave event, Camel Cigarette’s promotion company, which is licensed to Japan Tobacco International. And it took place in Kyiv’s 25,000 square-meter International Exhibition Center that easily fits 6,000 music revelers. The ticket had radio station Æ18
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Kolesnikov: Taxpayer costs for Euro 2012 exaggerated BY M A R K R AC H K E V Y C H RACHKEVYCH@KYIVPOST.COM
Ukraine’s government recently slashed its overall estimate of how much it will take to get the nation ready for the Euro 2012 soccer tournament. Now, the government is saying that it will cost
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$14.5 billion overall – from public and private sources combined. That is $5.5 billion less than the previous estimates of $20 billion. Planners cite several reasons for the welcome downward adjustment, but in general they say less spending will be needed in the hotel sector, by local govern- Æ17
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Vol. 16, Issue 19 Copyright © 2011 by Kyiv Post The material published in the Kyiv Post may not be reproduced without the written consent of the publisher. All material in the Kyiv Post is protected by Ukrainian and international laws. The views expressed in the Kyiv Post are not necessarily the views of the publisher nor does the publisher carry any responsibility for those views. Газета “Kyiv Post” видається ТОВ “ПаблікМедіа”.
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www.kyivpost.ua: дайджест статей УКРАИНА: Без права на труд Ирина Сандул В Украине, государстве, во главе которого стоит дважды судимый президент, бывшие заключенные часто работать не могут даже дворниками. В прошлом году на свободу из мест заключения вышло около 37,2 тыс. человек, сообщает Государственная пенитенциарная служба Украины. Из них трудоустроиться смогли единицы, говорят правозащитники. «У них нет ни жилья, ни паспорта, Заключенные Донецкой колонии (AFP) ни копейки денег на жизнь – если б только работа, - описывает проблемы бывших осужденных Лина Полясная, Президент общественной организации «Киев - Родной дом». – Их просто толкают на преступления»... СПОРТ: Киев и баскетбол. Правила эксплуатации Костя Довгань С отступлением холодов и повышением температуры до +20 наступает идеальное время баскетбола и его городской разновидности - стритбола. К счастью, Киев предлагает массу возможностей поиграть, если есть на то желание. Для начала - следует экипироваться. С мячом и формой проблем возникнуть не должно, а вот с баскетбольной обувью придется повозиться. Все дело в том, что хорошие кроссовки в Киеве с адекватные деньги не сыскать днем с огнем - так сложилось исторически... МНЕНИЕ: Тягнибок зіграв на руку Януковичу Юрій Онишків Партія Олега Тягнибока "Свобода" виявилась неготовою чи неохочою адекватно реагувати не провокації, роблячи все для збільшення власної популярності як "головних захисників українського" і мобілізації електорату свого опонента - Віктора Януковича. Коли у парламенті було ухвалено закон "про червоний прапор", сумнівів не було - кульмінацією цього цілеспрямованого кроку на розкол суспільства буде саме 9 травня. Окрім цього закону, який сам по собі є провокацією, іншою провокацією була ідея направити у Львів прорадянський "десант" гастролерів з партії "Русского единства" і "Родины"... HI-TECH: Сумма технологий: Предварительный обзор смартфона Samsung Galaxy S II Алексей Бондарев За первые пару дней тестирования одного из самых ожидаемых смартфонов этого года - Samsung Galaxy S II - впечатлений накопилась масса. Это и вправду лучшая модель на платформе Android и, возможно, лучший смартфон на рынке вообще. Хотя, конечно, придраться есть к чему... Samsung Galaxy S II Полный текст статей и блогов можно прочитать на www.kyivpost.uа
Supporters of Ukraine nationalist parties light flares as police try to bring order after clashes in Lviv during Victory Day to commemorate the defeat of Nazi Germany. Nationalists scuffled with pro-Russian activists. (AFP)
Soviet-era conflicts flare in Lviv, mar Victory Day holiday B Y N ATA LI A A . FE D U SC H A K FEDUSCHAK@KYIVPOST.COM
Many people are calling street clashes between pro-Russian and Ukrainian nationalists in Lviv on May 9 an orchestrated campaign by extremists to exacerbate the country’s ideological and geographic divide. Ukrainian President Viktor Yanukovych and his Party of Regions have called for an investigation into the clashes, which left 16 people injured, none seriously. The incidents threaten to undermine Kyiv’s warming relationship with Moscow. But some political analysts and administration critics blame the president’s supporters, suggesting that the conflicts are a way for Yanukovych to capitalize politically on disorder. The motive, these critics say, is to reinvigorate Yanukovych’s traditional Russian-speaking electorate in eastern Ukraine. Across Ukraine, polls show that Yanukovych’s popularity has plunged because of high inflation, continuing corruption and other ills. Critics of the nationalist Svoboda Party however, say the organization and Russian extremists are two sides of the same coin. Despite its nationalist credentials, allegations have dogged Svoboda about the sources of its financing. Some suspect people close to the propresidential Party of Regions of furtively backing the nationalists, charges denied by Svoboda.
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However, on May 12, deputies from Lviv’s Oblast Council blamed authorities in Kyiv for the May 9 riots. In a statement, the council said that “a cynical provocation occurred on May 9. The ruling authorities openly showed that they are working along the Kremlin scenario, written by the [Russian Federal Security Service] FSB. They are working to whet social standoffs and for the division of Ukraine." A furious Lviv Mayor Andriy Sadovyi seemed to concur on May 10. “A crime occurred in Lviv yesterday,” Sadovyi said, questioning why police had failed to uphold a court order prohibiting the gathering of political groups on May 9. “Why did representatives of Russian fascists yesterday raise a [Soviet] flag on the Hill of Glory? Why did the law enforcement agencies not react? Is this unprofessionalism or conscious support for the instigators?” In a day marked by chaos as much as violence, members of Ukraine’s nationalist Svoboda Party clashed with Communist Party members and representatives of the pro-Russian ultra-nationalist Russkoye Yedinstvo, Rodina and Dozor parties. The backdrop, of course, was the 66th anniversary of the Soviet and Allied victory over Nazi Germany. According to various eyewitness and news accounts, over a five-hour period, Svodoba members and fans of the Karpaty soccer club blocked visitor access to Lviv’s famed Marsove Pole war cemetery. These Æ32
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)MPORT OF MEDICINES IN 5KRAINE TO CEASE BY
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OLLOWING A SERIES OF QUITE PROMISING STEPS AND WORK OF THE STATE WITH THE THIRD SEC TOR 5KRAINE HAS MANAGED TO YIELD SOME POSITIVE RESULTS ON THE WORLD PHARMA ARENA /NE OF THE EXAMPLES OF THE COHERENT JOINT WORK OF 5KRAINIAN AUTHORITIES AND THE %UROPEAN "USINESS !SSOCIATION IN PARTICULAR IS THAT 5KRAINE HAS EVENTUALLY SUCCEEDED IN ENTERING THE INTERNATIONAL SYSTEM OF COOPERATION OF PHARMACEUTICAL INSPECTIONS 0)# 3 IN .OVEMBER THUS JOINING LEADING WORLD COUNTRIES !PART FROM THAT 5KRAINE HAS IMPLEMENTED THE MANDATORY '-0 AND '$0 RULES WHEN PROVIDING MANUFACTURING LICENSE AND MEDICAL DRUGS SALES WHICH CAN BE ALSO ATTRIBUTED TO THE STATElS COOPERA TION WITH SUCH ORGANIZATIONS AS THE %"! .OW WE ARE CONFIDENT THAT THESE STEPS HAVE ENSURED CREATION OF THE PRIMARY MANDATORY LEGISLATIVE FRAMEWORK FOR THE FURTHER DEVELOPMENT REGISTRATION AND PRODUC TION OF DOMESTIC MEDICAL DRUGS BY 5KRAINE .OTWITHSTANDING THE REAL PROGRESS 5KRAINE HAS ACHIEVED OVER THE RECENT YEARS THE RESHUFFLED GOV ERNMENTAL APPARATUS HAS VENTURED TWO BOLD LEGISLA TIVE INITIATIVES THAT MAY DRASTICALLY UNDERMINE AND QUESTION 5KRAINE AS A SIGNATORY TO THE 74/ AND OTHER INTERNATIONAL TRADE AGREEMENTS LET ALONE THE CONCEQUENCES FOR 5KRAINIAN POPULATION WHICH MIGHT BE LEFT WITHOUT ANY ACCESS TO VITAL MEDICINES Draft Concept of the "State Targeted Program for Development of ImportSubstituting Manufacturing in Ukraine and Substitution of Imported Medicines with Domestic Products, Including Biotechnological Medicinal Products and Vaccines, for 2011-2021" Bill No 7412 providing amendments to the Article 9 of the Law of Ukraine On Medical Drugs. 4HE %"! (EALTH #ARE #OMMITTEE REPRESENTING INTERNATIONAL BUSINESS IN 5KRAINE IS DEEPLY CON CERNED WITH THE RECENT INITIATIVES OF THE 'OVERNMENT OF 5KRAINE )N THE CONTEXT OF THE SEVENTEENTH ROUND OF 5KRAINElS NEGOTIATIONS ON THE FREE TRADE ZONE
2%')/.!,.EWS Odessa EBA companies bring up tax issues with local Tax Administration 27 April, 2011, Odessa branch of the EBA hosted a meeting for its member companies and Odessa Region state tax administration to discuss transparency and goodwill of State Tax Administration in Odessa region directed to a dialog with business. The high-scale meeting was attended by the Head of service who signed the cooperation plan with the EBA for 2011. The attendees discussed the novelties of tax legislation in Ukraine and basic aspects of Tax Code, payment of corporate income tax in a context of Tax Code, VAT and the new terms of its administration, automatic VAT refund system and other relevant tax agenda. Odessa tax officials explained how the tax audit of small and middle businesses will be conducted in 2011, STA decisions complaints procedure and tax accounting submission in e-format.
EBA Business Breakfast in Lviv "Corporate Life Insurance as Staff Motivation Strategy" 28 April, 2011, the EBA Western Ukrainian Branch conducted the Business-breakfast on Corporate Life Insurance, presided by the Heads of PZU Ukraine in Lviv. During the event, participants received valuable insights from insurance specialists about life insurance principles based on the European experience, as the EU counterparts use corporate life insurance as motivation for their employees. Among other topics were: taxation of benefits in life insurance, pension insurance and the role of the current pension reform.
PLANNED FOR *UNE THE HAZARD OF UNFAIR COM PETITIVE ENVIRONMENT IN THE COUNTRY IS IMMINENT UNLESS THE $RAFT #ONCEPT IS REJECTED !S FAR AS THE "ILL IS CONCERNED IT IS A DIRECT INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS PROTECTION ANTICIPATED BY 5KRAINElS 74/ MEMBERSHIP
7HAT ARE THE CONTRADICTIONS THE DOCU MENT CONTAINS &IRST OF ALL THE $RAFT #ONCEPT CONTAINS NEITHER BENCHMARKING STUDY AS REGARDS THE MEDICAL DRUGS EFFICIENCY VERSUS THEIR PRICE NOR COST BENEFIT ANALY SIS THAT WOULD PROVE ITS EXPEDIENCY 4HERE ARE NEI
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(EAD OF THE %"! (EALTHCARE #OMMITTEE #OUNTRY -ANAGER :& 0/,0(!2-! 3 ! 2EPRESENTATIVE OFFICE IN 5KRAINE 7HAT IS THE MAJOR ESSENCE OF THESE THER CALCULATIONS TO PROVE THE DECLARED INCOME NOR INITIATIVES DETAILED INFORMATION ON THE PROSPECTIVE EXPENSES 4HE "ILL ACTUALLY ELIMINATES THE DATA EXCLUSIVITY THE COUNTRY WILL HAVE IN THE LONG TERM PERSPECTIVE WHEN REGISTERING NEW MEDICAL DRUGS PROVIDING NO &OR EXAMPLE IT STATES THAT DOMESTICALLY PRODUCED GUARANTEED PROTECTION OF INTELLECTUAL PROPERTY RIGHTS GENERIC MEDICINES ARE ALWAYS CHEAPER THAN THEIR FOR THE RESEARCH AND DEVELOPMENT 2 $ COMPANIES IMPORTED ANALOGUES WHILE HAVING THE SAME LEVEL OF SUPPLYING INNOVATIVE MEDICINES TO 5KRAINE )T IS EVI QUALITY 4HEN WHY DO 5KRAINIAN CUSTOMERS CHOOSE DENT THAT SHOULD THESE AMENDMENTS COME INTO FORCE IN FAVOUR OF THE IMPORTED MEDICAL DRUGS )T MIGHT THE INTEREST OF 2 $ COMPANIES IN 5KRAINIAN MARKET BE EFFICIENCY THEN THAT HAS ITS KEY ROLE IN THE CUS WILL VANISH !S A RESULT IT MAY HAVE A NEGATIVE TOMERSl CHOICE -OREOVER TALKING ABOUT THE PRICE IMPACT ON THE INNOVATIVE MEDICAL DRUGS AVAILABILITY OF MEDICINES IT IS NECESSARY TO STATE THAT THE ACTIVE IN 5KRAINIAN MARKET 4HESE MEDICAL DRUGS HAVE NO AGENTS USED NOW AS A BASIS FOR THE MANUFACTURING DOMESTIC ANALOGUES AND ARE OF VITAL IMPORTANCE FOR OF THE DOMESTIC GENERIC MEDICAL DRUGS HAVE BEEN SOME CATEGORIES OF PATIENTS 4HE SECOND INITIATIVE PRODUCED NOT IN 5KRAINE WITH THESE ACTIVE AGENTS NAMELY THE $RAFT #ONCEPT ON IMPORT SUBSTITUTION IS CONSTITUTING AROUND OF THE FINAL MEDICINESl ACTUALLY A VERY RAW DOCUMENT CONTAINING A NUMBER PRICE /VERALL IT SHOULD BE ALSO ADVISED THAT OVER OF CONTRADICTIONS !CTUALLY THE $RAFT #ONCEPT OFFI THE LAST YEARS WE WITNESS A CLEAR TENDENCY OF A CIALLY INTENDED ON THE IMPROVEMENT OF ACCESSIBILITY HIGHER AVERAGE PRICE INCREASE IN DOMESTIC MEDI OF MEDICAL DRUGS FOR THE 5KRAINIAN PATIENTS AND CAL DRUGS COMPARED TO THE IMPORTED ONES !LSO SUPPORT OF DOMESTIC PHARMACEUTICAL PRODUCERS MAY DO YOU THINK IT IS LOGICAL THAT A CUSTOMER SHOULD DEPRIVE CUSTOMERS OF A NUMBER OF HIGH QUALITY MEDI HAVE HIS HER FREE CHOICE AS TO THE SELECTION OF CAL DRUGS 4HE FOREIGN COMPANIES IMPORTING MEDICAL MEDICAL DRUGS AT THE MARKET .O DOUBTS HERE DRUGS TO 5KRAINE MAY LEAVE 5KRAINE BECAUSE OF THE 4HEN WHAT KIND OF CHOICE WOULD HE SHE HAVE IF THE PREFERENCES IN PRODUCTION DEVELOPMENT AND EVIDENTLY UNFAIR COMPETITIVE ENVIRONMENT
MEDICAL DRUGS CIRCULATION ARE CLEARLY GIVEN TO THE DOMESTIC MANUFACTURERS ONLY AS ACCORDING TO THE $RAFT #ONCEPT (ERE ON BEHALF OF THE #OMMITTEE ) WOULD LIKE TO MAKE SURE THAT THE FOREIGN COMPA NIES WHICH WOULD TAKE THEIR DECISION TO INVEST INTO PRODUCTION IN 5KRAINE WOULD ALSO HAVE PRIVILEGES SIMILAR TO THOSE WHICH WOULD BE PROVIDED TO THE DOMESTIC PRODUCERS SHOULD THE $RAFT #ONCEPT BE FINALLY APPROVED /THERWISE WHAT WOULD BE THE STIMULI FOR THE FOREIGN CAPITAL INVESTMENT INTO THE COUNTRY 4HOUGH ) UNDERSTAND THAT YOUR #OMMITTEE GENERALLY SUPPORTS THE IDEA OF DOMESTIC MANU FACTURING DEVELOPMENT 7HAT DO YOU THINK WOULD HAVE BEEN THE PROPER STEPS TO START WITH $EFINITELY 7E ENTIRELY SUPPORT THE GENERALLY LOG ICAL THESIS STATING THAT THE TRANSITION OF THE DOMESTIC PHARMACEUTICAL INDUSTRY TO THE INNOVATIVE AND INVESTING MODEL IS IMPORTANT AND NECESSARY FOR THE FURTHER DEVELOPMENT OF 5KRAINE 4HE POINT IS THAT NO ABRUPT AND UNREASONABLE ACTIONS SHOULD TAKE PLACE HERE FOR ALL THE STAKEHOLDERS OF THE INDUSTRY SHOULD BE INVOLVED IN THE OPEN DISCUSSION TO HAVE A SMOOTH TRANSITION WITH NO POSSIBILITY FOR ANY NEGATIVE IMPACTS IN 5KRAINE ) AM ALSO A CITIZEN OF 5KRAINE AND WOULD LIKE TO SEE MY COUNTRY FUR THER DEVELOPING "Y THE WAY THE %"!lS EFFORTS TO PROMOTE 5KRAINElS %5 ORIENTED DEVELOPMENT ARE DIFFICULT TO OVERESTIMATE 7HAT WOULD BE THE NEXT STEPS OF THE %"! AS REGARDS TO THE OVERALL SITUATION $ID YOU TRY TO DISCUSS YOUR CONCERNS WITH THE AUTHORITIES 4HE %"! (EALTH #ARE #OMMITTEE HAD BEEN STRIVING TO ORGANIZE A MEETING WITH THE -INISTER OF (EALTH SINCE &EBRUARY THIS YEAR BUT TO NO AVAIL 4HE %"! HAS ALREADY SENT OUT ITS OFFICIAL POSITION CRITICIZING BOTH DOCUMENTS TO A NUMBER OF 5KRAINIAN AUTHORITIES AND THE $ELEGATION OF THE %UROPEAN 5NION TO 5KRAINE (OPEFULLY THEY WOULD BE CANCELLED AND THE PROPOSALS OF THE %"! (EALTH #ARE #OMMITTEE WILL BE THOROUGHLY CON SIDERED BY THE -INISTRY OF (EALTH AND RELEVANT AUTHORITIES
*O'PDVT Going horizontal. Close-up of the new tax monitoring initiative
T
ax system in Ukraine has never been perfect. In 2007 World Bank ranking 'Paying taxes' Ukraine ranks 174 in easiness of paying taxes, and this indicator for 2011 even worsened - now Ukraine ranks 181. Adoption of the Tax Code appeared to be a strong political decision, meant to consolidate all tax laws and regulations in a single transparent and easy-touse document, friendly for taxpayers and easy to administer and enforce for tax authorities. Nevertheless, overall impact on business environment and investment conditions seems to be negative. Realizing this, relevant Ukrainian authorities, supported by international consultants, started a long process of fixing systematic irregularities of the Tax Code. The EBA welcomes these efforts, focusing attention on the most topical problems preventing business from further development, such as limitation of royalty payments, VAT refund, etc. Recently, the new management of the Tax Service of Ukraine has announced a thorough reorganization of this authority. Being a barrier to sound business and a hellhound in taxpayers’ eyes, now the Tax Service is looking for the ways to become more customer-oriented and friendly to taxpayers, showing signs of true transformation. One of these signs is material reduction (by 30 %) of tax audits of taxpayers – now tax service more relies on risk analysis. Moreover, the Tax Service has announced pilot
project on Horizontal monitoring for major taxpayers – experience gained from EU member states. It implies higher level of consciousness in observance of the law based on enhanced mutual responsibility, nurturing of consulting and cooperation culture, and trust. Horizontal monitoring milestones are: trust - tax service expects that a taxpayer runs business in compliance with tax laws; transparency - trust evolves through confirmation of transparent activity and open communication between a taxpayer and tax authority; mutual understanding – in case of a taxpayer’s mistake, it should need priority assistance in its rectification. In their turn taxpayers can benefit from the following facilitations: minimization of interventions to daily transactions, significant reduction (and absence at a later stage) in cross audits, opportunity to get VAT refund automatically, recognition by tax authorities of auditor’s report issued by audit companies, prompt responding by tax authority to the taxpayers’ problems etc. Another problem that has made taxpayers’ life a burden is VAT refund. Following EBA legitimate proposals on reimbursement of outstanding VAT amounts, in course of ongoing dialogue, the Tax Service has granted many EBA member companies regular VAT refund. Particularly, as of 12 April 2011 amount of VAT refund reached more than UAH 526 mln., as of 26 April 2011 – more than UAH 390 mln. All the abovementioned goes to show that Tax Service is on the right way of its transformation towards servic-
ing and hopefully soon the EBA and the whole Ukrainian business community will be able to see the first positive results of this work. EBA Executive Director Local tax authorities undergoing administrative reform are not always ready to clarify certain Tax Code provisions and support taxpayANNA Derevyanko ers. Most taxpayers do not know what to do when their local tax authorities are unable to explain how to deal with individual taxpayers’ problems. This causes problems for companies, especially for companies making payments to non-residents. The EBA, acting on behalf of its member-companies, addresses relevant Ukrainian authorities with requests to clarify and amend the Tax Code. Cooperating with the Tax Service, the EBA represents interests of its member companies, which receive general support from central Tax Service and professional advice from EBA partners. In this context it is worth mentioning that Tax Service becomes more transparent and customer-oriented, launching Horizontal monitoring project and making efforts to solve the long-lasting problem of VAT refund. We hope that this enthusiasm will linger.
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May 13, 2011
Editorials
National unity
“Great ideas! I can use one or two here!”
The May 9 clashes in Lviv, considered provocations by extremists on both sides of the pro-Russian and pro-Ukraine nationalist divide, may deepen ideological splits. If so, it would be one more tragedy in a nation that desperately needs to unite and find peace with its past. Although both sides say they tried to avoid conflicts, it doesn’t look that way. It appears that pro-Russian elements were bent on taunting public displays of Soviet symbols. For many in western Ukraine, tyranny replaced tyranny when the Soviet Union triumphed with its World War II allies over Nazi Germany. In western Ukraine, the red Soviet flag is viewed as a symbol of oppression. As for Svoboda nationalists involved in the clash, they would be better off channeling their energies into constructive historical debates that shed truth on the Soviet regime. Roughing up or snatching flags from veterans and elderly people who revere the Soviet victory – and, by extension, the symbols that went with it – doesn’t help build a strong nation. Once again, leadership – from President Viktor Yanukovych to local police – failed the people. In a country with such sensitive historical issues, including Ukrainians who fought against both Nazis and Soviets, it was not wise for the pro-presidential Party of Regions to adopt a law ordering central and regional government to publicly display the Soviet Victory Day flag on May 9 – replete with the star, hammer and sickle. Meanwhile, hundreds of police officers working in Lviv on May 9 failed to prevent protests from escalating to violence. A strong suspicion exists that Yanukovych’s team, which traditionally draws its support from the Russian-speaking east, tried exploiting the nation’s divisions for political gain to divert attention from spiraling inflation and a sluggish economy. Ukrainians need to unite and approach each other with greater understanding. Being stuck between Hitler and Stalin, the 20th century’s greatest mass murders, is reason enough to find empathy with each other. So are centuries of foreign occupation. Ukrainians should not give in to inflammatory Kremlin views of history that denigrate Ukraine as a sovereign state. There is only one Ukrainian flag. It should stand for justice, law, democracy and civility. It should be the symbol of triumph for all Ukrainians, living and dead, who dreamed of living at peace and prosperity in their own homeland.
Springtime The story of John Demjanjuk, the Ukrainian-American convicted in Germany on May 11, dominated international newswires on the heels of 25th anniversary coverage of the Chornobyl nuclear disaster. Meanwhile, Ukraine’s domestic conflicts over World War II played out violently on May 9. Again, the world is peppered with grim Ukrainian history amid the fluff about the latest saucy, semi-nude protests of the homegrown Femen women’s group. For anyone abroad whose only image of Ukraine is drawn from its corrupt politics and gritty past, spring in Kyiv – and in much of the rest of the nation – would come as a welcome jolt. We have chestnut trees blossoming. We have lilacs in bloom. We have people picknicking by day and then to the opera at night. After the first May showers, street cafes pulled their tables outside, so now the sidewalks buzz with spring chat over cool beverages and anticipation of summer. Look around. There is beauty everywhere in Ukraine – in people and in nature. Pity the millionaires who fence off their mansions in luxurious Koncha Zaspa. The rest of us enjoy free picnics in the woods and fields, some of which open up to the banks of the grand Dnipro and other rivers. Ukrainians have long mastered the art of enjoying life without an overabundance of money or material goods. Cultural life is vibrant in Kyiv like never before. Renowned Russian theaters on tours in the capital tend to charge Moscow prices, but local troupes play equally-good Shakespeare and Lesya Ukrainka classics for $20 in a parterre box. Tickets for world-famous opera performances can be purchased minutes before the show. In Paris or Venice, you have to book much in advance and will pay 100 euro on average to watch “Madam Butterfly.” Diplomats take full advantage of the same stunning shows in Kyiv, Odesa or Lviv on the cheap – as little as Hr 20 for students. International celebrities drop by from time to time, such as Ringo Starr in June, to bring a little glitz. But even without them, May in Kyiv reminds us of what makes this nation such a spectacular home. It’s time to turn off the TV and explore. Maybe we’ll see you around the next street corner or we’ll bump into each other at the railway station, en route to one of the nation’s many enchanting destinations.
Published by Public Media LLC Jim Phillipoff, Chief Executive Officer Brian Bonner, Senior Editor Editors: Katya Gorchinskaya, Roman Olearchyk, James Marson, Yuliya Popova Staff Writers: Alexey Bondarev, Tetyana Boychenko, Oksana Faryna, Natalia A. Feduschak, Oksana Grytsenko, Kateryna Grushenko, Nataliya Horban, Vlad Lavrov, Olesia Oleshko, Yura Onyshkiv, Kateryna Panova, Mark Rachkevych, Yuliya Raskevich Nataliya Solovonyuk, Maria Shamota, Irina Sandul, Svitlana Tuchynska, Nataliya Vasyutyn Photographer: Joseph Sywenkyj. Photo Editors: Yaroslav Debelyi, Alex Furman Chief Designer: Vladyslav Zakharenko. Designer: Angela Palchevskaya Marketing: Iuliia Panchuk Web Project: Nikolay Polovinkin, Yuri Voronkov, Maksym Semenchuk Sales department: Yuriy Timonin, Maria Kozachenko, Elena Symonenko, Sergiy Volobayev Subscription Manager: Nataliia Protasova Newsroom Manager: Svitlana Kolesnykova, Office Manager: Anastasia Forina
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NEWS ITEM: The clash between ultra-nationalist Svoboda Party members and pro-Russian participants of Victory Day celebrations in Lviv on May 9 got international attention. Some commentators even said the clashes would make a great pre-election video for Prime Minister Vladimir Putin in Russia, where similar divisive conflicts are fodder for political campaigns. In the meantime, Putin – who may be running for president in 2012 – announced a new movement called People’s Front to inject “fresh ideas, new offers and new faces” in contrast to his ruling United Russia Party.
Kyiv Post not for sale; best years still ahead MOH A MMA D Z A H OOR
After a dispute last month between me and the Kyiv Post’s editor went public – too public for my tastes – life is back to relative calm at the newspaper and between me and the staff. I now hope that prosperity will follow this calm, so I am taking this opportunity to clear up misconceptions in the public about my plans for the Kyiv Post going into the future. First of all, I have loved the Kyiv Post as a reader since its beginning in 1995. So naturally, when I got the chance to buy it in 2009, I gladly seized the opportunity. I regard the newspaper that I own as an important community service. It was never designed to make money, but it shouldn’t be losing it either. Anything can happen, and a businessman never buys something that he is not willing to sell. But I have no current plans to part with the Kyiv Post and I am not entertaining offers. I did offer the management to buy out the newspaper on a confidential basis, knowing that today only they can guarantee that the newspaper will remain independent and also knowing that it is not easy to raise money for a lossmaking newspaper, unless there are hidden political motives behind such a deal. My offer in this regard was meant as a personal challenge to the newspaper’s staff to do better. Now I know that anything you say to a roomful of journalists is not confidential! I want the business to improve its performance in all
Æ This news organization plays an important role as a beacon of independent journalism areas, including editorial and advertising. I believe the Kyiv Post plays an important role as a beacon of independent journalism and that will never change under my ownership. Our trust among readers is high and we will keep it that way, despite any political pressures that might arise, although to date we have not been bothered. I also believe the Kyiv Post can – and must -- regain its historic profitability. I believe it will happen if the correct steps are taken by the various components of the newspaper – administration, editorial, advertising, marketing and distribution. There have been a lot of comments about the Kyiv Post in the press lately, so let me try to explain the direction of the business. I purchased the newspaper from its founder, American Jed Sunden, in 2009. While the previous owner did a great job creating the paper and building its sterling reputation in the community, I took over a business that was suffering from the economic crisis and badly in need of investment. Æ19
Feel strongly about an issue? Agree or disagree with editorial positions in this newspaper? The Kyiv Post welcomes letters to the editors and opinion pieces, usually 800 to 1,000 words in length. Please e-mail all correspondence to Brian Bonner, senior editor, at bonner@kyivpost.com or letters@kyivpost.com. All correspondence must include an e-mail address and contact phone number for verification.
www.kyivpost.com
May 13, 2011
Yanukovych ‘reforms’ favor mainly oligarchs
President Viktor Yanukovych (foreground, second from right), Ukrainian billionaire Rinat Akhmetov (behind Yanukovych) along with Deputy Prime Ministers Borys Kolesnikov and Andriy Klyuyev (second row, first and forth from right) gather at a Party of Regions convention in 2009. (Yaroslav Debelyi)
ing protests all over Ukraine. In an apparent charade, Yanukovych vetoed the tax code, eliminating its worst aspects, but even so, big international auditing firms say the tax system has deteriorated, and many small businesses have closed. In a brief annual address to parliament on April 7, Yanukovych appeared to have given up his reform pretenses, presenting platitudes, apart from insisting on privatization. Major pension and gas market reforms agreed to with the IMF have been postponed, while the grain export quotas have been maintained and tax reimbursements have stalled. As a result the IMF reforms have fallen apart. The most sinister aspect of Yanukovych’s rule is the use of the judicial system to repress opponents and the media. In its recent human rights report, the State Department noted that prosecutors had brought charges against former Prime Minister Yulia Tymoshenko and other former high-level members of the government, and that the way the case was handled suggested it was politically motivated. In March, prosecutors surprisingly charged former President Leonid Kuchma, a staunch Yanukovych supporter, with involvement in the murder of journalist Georgy Gongadze in 2000. Given Yanukovych’s attitude toward opposition media and his previous lack of interest in the case, the sudden concern does not seem plausible. Yanukovych’s role in instigating the case has aroused online speculation in Ukraine about his
motives. The media report that other Kuchma-era politicians are being investigated, notably the parliamentary speaker Volodymyr Lytvyn. Another hypothesis is that oligarchs allied with Yanukovych want to seize television stations or steelworks from Kuchma’s wealthy son-in-law, following the script of Russia’s prosecution of Mikhail Khodorkovsky. A third theory is that Yanukovych is taking revenge on Kuchma for not having ordered his security forces to shoot on the peaceful Orange Revolution protesters in 2004. Meanwhile, economic growth was mediocre at 4 percent last year, and the same is expected this year. Transparency International reports rising corruption. Can such misrule endure in today’s Europe? The spirit of the Orange Revolution lives on in multiple public protests against everything from unpaid wages to repression. In a year, the popularity of Yanukovych’s party has fallen by two-thirds, to 14 percent, and his approval rating has fallen to 17 percent. A large majority of Ukrainians, including in the Russian-dominated east, believe their country is going in the wrong direction. Yanukovych does not seem to recognize what his Russian example does: To survive politically, even under light authoritarianism, requires remaining overwhelmingly popular. Anders Aslund is a senior fellow at the Peterson Institute for International Economics. Copyright Washington Post/Bloomberg.
Naftogaz, Gazprom joint venture remains most likely OLIVER AD E L MA N
A joint venture between the Russian statecontrolled natural gas company Gazprom and Ukraine’s state-owned Naftogaz remains the most likely outcome of the long-running negotiations between the two groups over potential collaboration. While a straight merger was initially discussed and, in theory, at least remains on the table, this option presents far more problems than it solves, according to industry sources. A Moscow-based lawyer noted that from the Russian point of view, a merger handing up to 10 percent of Gazprom to the Ukrainian government was politically unpalatable, while for
VOX populili WITH NATALIYA SOLOVONYUK
What do you think about the conflicts in Lviv that marred the May 9 Victory Day celebrations? Volodymyr Kravchenko, retired “I think it was a provocation by the authorities. Clashes occurred not among the local people, but from the visitors.”
AN D E R S AS L U N D
In February 2010, Viktor Yanukovych was freely and fairly elected president of Ukraine. It was not too surprising: The Ukrainian economy had contracted by 15 percent in 2009, and near political stalemate reigned in this fragile democracy. One year later, Yanukovych appears to be following the prescription of his political model, Russia’s Vladimir Putin, by swiftly concentrating power in his own hands and wealth among a small circle of associates. In October, the Constitutional Court suspended the Ukrainian Constitution of 2004, returning to the 1996 constitution, which granted greater presidential powers. The country is no longer regarded as a democracy; Freedom House downgraded Ukraine to being only partially free, and Reporters Without Borders ranks Ukraine 131st out of 178 countries in press freedom. And local elections last October ended Ukraine’s string of free and fair elections. The authorities defend their roughness as necessary to achieve reforms. Last summer, these statements had some credibility. In June, Yanukovych presented an ambitious economic reform program. In July, he reached agreement on a stabilization program with the International Monetary Fund, backed by $15 billion of credits. Impressively, Ukraine swiftly carried out the required early actions, such as tightening the state budget and raising gas prices for consumers. The ensuing “reforms,” however, did not boost Ukraine’s competitiveness or market freedom but instead benefited a few businessmen close to the president. Yanukovych favors privatization, but the deals are neither transparent nor competitive. The national telecommunications company, Ukrtelecom, was sold to a single permitted buyer - an Austrian private-equity firm named EPIC - at the minimum price. More such deals are in the works. Last summer, Ukraine enacted a new law on government procurement, but major infrastructure projects connected with the Euro 2012 soccer championship were excluded from competition and appear reserved for a couple of the president’s closest associates. Ukraine’s grain exports boomed in recent years, with domestic and international entrepreneurs stepping in. But last summer, Yanukovych ordered an embargo on exports, with quotas granted only to his associates. Food processing is declining as a result. The key reform law was the tax code adopted last fall, but it cut taxes on big corporations while increasing the burden on small entrepreneurs, arous-
Opinion 5
Æ Ukraine reluctant to give up control of its pipelines the Ukrainians to have to give up control of their strategic gas transportation pipeline system would also be very uncomfortable. The whole process has been politically driven from the start. While there are reported to be periodic direct discussions between representatives of the two companies, more contact is happening on a government-to-government level.
The visit by Russian Prime Minister Vladimir Putin to Kyiv in April again generated a brief storm of media speculation about the potential shape of any transaction, but it is now likely that a further lengthy delay will ensue before the situation develops further. Both the Moscow-based lawyer and an industry analyst in Kyiv said that the summer was the earliest likely date for some form of deal to be announced, although the lawyer also raised the possibility that the whole discussion would end up as nothing more than a media and political charade, generating substantial media coverage and political interest, but no firm conclusion. A more pressing energy issue between the two countries remains gas transit pricing and direct negotiations between the two governments are continuing over this, noted the sector analyst. While a full-scale shutdown of Æ19
Olena Chumak, student “To bring to western Ukraine a huge red flag, this is pure provocation. But also I do not welcome the overly nationalistic moods in Lviv in recent years: To pluck ribbons from passersby and veterans. It’s too much.” Andriy Tkachuk, builder “I think it was more of a provocation. Our authorities, as always, first do and only then think, if they think at all!” Zinaida Vasyn, fashion designer “I believe that the government is to blame for this incident. "
6 Business
www.kyivpost.com
May 13, 2011
Firtash adds bank to growing empire K Y I V P O S T S TA F F
Dmytro Firtash, a Ukrainian business tycoon with ties to President Viktor Yanukovych, has acquired the troubled Nadra Bank, expanding a business empire that was under attack when Yulia Tymoshenko was prime minister. The $440 million acquisition of 90 percent of Nadra, which has been under National Bank of Ukraine administration since 2009, gives Firtash a foothold in the country’s financial sector to add to his considerable domestic and foreign interests in chemicals, natural gas and media. The purchase comes after Firtash was last month summoned by a U.S. court to answer a lawsuit filed by Tymoshenko, a bitter foe of the controversial businessman and the president, ousted shortly after Yanukovych defeated her in the presidential election. She alleges that Firtash colluded with the government to defraud Ukraine of some $3 billion worth of natural gas. Both he and the government deny any wrongdoing. Firtash acquired the controlling stake in Nadra through his Austria-registered Centragas Holding which bought an entire additional stock issue by the
bank making up 89.97 percent of its shares for 3.5 billion hryvnias ($440 million), Nadra said in a statement. With assets of Hr 22.9 billion, Nadra is Ukraine’s 11th largest bank. It has restructured its foreign debt with significant write-offs after going into default in 2009, Reuters reported. Ukraine’s central bank has pumped in more than $1 billion in loans and other assistance since 2008 to keep the bank afloat – and another $600 million may be needed to make it a viable institution, according to government and International Monetary Fund estimates. Although questions of transparency remain an issue, Dragon Capital investment bank analysts wrote favorably about the acquisition: “We consider this news positively, as the first step towards recapitalization has now been completed. However, we are still waiting for the government to announce the remaining recapitalization needs and the financing sources.� Angry depositors have long battled to get their cash returned, which required intervention from the government amid investigations into alleged financial mismanagement at the bank. The bank’s former chief executive offi-
ÆOn the move EVGENYA LOKTIONOVA
Ukrainian billionaire Dmytro Firtash
cer, Ihor Gilenko, and other ex-bank officials remain fugitives from justice after prosecutors charged them with embezzlement. Last year, the bank owed depositors an estimated $1 billion to depositors, including individuals and commercial entities, according to Ihor Stepanov, coordinator for the United Independent Committee of Depositor.
between Russia and Ukraine in 2009 by Tymoshenko. Since Yanukovych came to power, Tymoshenko has come under criminal investigation by prosecutors for alleged financial wrongdoings while she was prime minister from 2007 to 2010. One probe is looking into her role in concluding the deal with Russia in 2009, removing RosUkrEnergo and securing a new gas contract between the two countries, which the government has complained sets the price of gas too high. She denies wrongdoing. The accusations and counter attacks relate to the 2009 deal with Russia, which allowed Ukraine’s state gas company Naftogaz to seize 11 billion cubic meters of gas from RosUkrEnergo. An international court ruled the move illegal last year, forcing Naftogaz to return around $3 billion of gas to RosUkrEnergo. Tymoshenko claimed that Firtash and the government colluded to ensure RosUkrEnergo won the case, at the expense of state-owned Naftogaz. Firtash, who has close ties to Yanukovych’s inner circle, has also acquired three major chemicals plants since the president took power.
Send On the Move news to otm@kyivpost.com or contact Kateryna Panova at 234-6500. Items should include a photograph of the individual who has recently been appointed to a new position, a description of their duties and responsibilities, prior experience as well as education. Note: The Kyiv Post does not charge for publishing these notices or any news material.
VALENTIN BOINITSKY was
was promoted to director of UTG, a real estate and development consulting company. Prior to the appointment, Loktionova headed UTG’s commercial property department. Vitaliy Boiko, who previously held the director position, remains managing partner of the company. Before joining UTG, Loktionova was head of sales at Cosmetics Trading, a wholesale distributor. She also managed projects at the Investment Consulting and Technology Company. Loktionova graduated from Kyiv National Shevchenko University. She also studied at Kyiv Institute of Investment Management and at the International Staff Academy.
There have been no public statements about the bank’s plans to repay depositors. The purchase by Firtash was given the go-ahead by the central bank, which had been looking for an investor. Cleaning up Nadra has been one of several key conditions set by the IMF in exchange for a credit line of up to $15 billion. The IMF has called upon Ukraine to either shut down the bank, in turn selling off its assets, or to find a new investor that could recapitalize it. Despite bringing in Firtash to save Nadra, questions linger over what went wrong at the bank and why Firtash – long considered an investor in it – would be interested in buying it. Alexander Valchyshen, head of research at Investment Capital Ukraine, told the Financial Times that Firtash would use the bank to service his business empire’s cash flow. He added that he could use his media outlets to improve the bank’s damaged reputation and use cash from depositors to finance his other businesses. Firtash achieved prominence as a co-owner along with Russia’s gas giant Gazprom of RosUkrEnergo, a Swissregistered gas trader that was ousted from the multibillion-dollar gas trade
ALEXEY PUSTOVIT has
appointed corporate affairs manager at Miller Brands Ukraine, a subsidiary of SABMiller plc, a large international brewer. In his new position, Boinitsky will be responsible for the company’s external and internal corporate communication, as well as for implementing SABMiller’s global initiatives in Ukraine. Before joining Miller in Ukraine, Boinitsky headed public relations at international software development company GlobalLogic. Before that, he worked at telecommunications provider Astelit, marketing agency Pulse and the British Council. Boinitsky is a graduate of Kyiv Shevchenko University. He also holds an international degree from the UK’s Chartered Institute of Public Relations.
joined Asters, a Kyivbased law firm, as a counsel. Pustovit has a good record of advising on antitrust-competition issues and in representing clients at the Anti-Monopoly Committee of Ukraine. Apart from competition law, he also advises on mergers, acquisitions, antidumping and foreign trade issues. Prior to joining Asters, Pustovit was a partner at Konnov & Sozanovsky. He headed the firm’s competition practice. Pustovit has a master’s degree in Law from Kyiv National Taras Shevchenko University.
KSENIA SOLOVYEVA was appointed research analyst in Ukraine for DTZ, a global real estate and development consultancy. Before joining DTZ, Solovyeva worked as a project manager at the international consulting company Lattanzio e Associati. Prior to that, she served as an assistant to the head of the Ukrainian parliament’s construction and local self-government committee. Solovyeva graduated from Kyiv National Economic University with a master’s degree in international trade. She has also completed a one-year certificate program on trade policy and commercial diplomacy at the University of Ottawa.
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Khlib Investbud’s top executive defends company BY O K S A N A G RY T SEN KO GRYTSENKO@KYIVPOST.COM
Before last year, few farmers or grain traders had ever heard of Robert Brovdi or Khlib Investbud, the quasistate grain trading company that he leads as general director. But today, Brovdi and the mysterious Khlib Investbud are among the biggest players on Ukraine’s lucrative agribusiness market. Domestic and foreign grain traders who have invested billions of dollars over the years into Ukraine’s agriculture sector claim that non-transparent government favoritism has lifted Khlib Investbud from obscurity to market dominance. These agribusinesses claim Khlib Investbud -- and its secretive owners believed to be close to President Viktor Yanukovych -- have unfairly benefited from insider deals and large grain export quotas. Speaking with the Kyiv Post, the 35-year-old Brovdi denied such accusations and accused competitors of waging a smear campaign. Despite carrying a business card that shows him working under the Cabinet of Ministers’ Ministry of Agrarian Policy, Brovdi was evasive when confronted with questions about what private interests stand behind Khlib Investbud. Kyiv Post: You headed the regional branch in Zakarpattya Oblast for Arseniy Yatseniuk’s Front of Change political party. Why did you leave politics, opting instead to become head of a grain trading company? Robert Brovdi: I spent a year and a half in politics. I assisted in Yatsenuik’s presidential campaign and participated in regional elections. Politics interested me. But when I decided to move to Kyiv, I had to quit the board of Yatseniuk’s party as well as the head of regional party organization. But I have remained a member of the Front of Change party. KP: Did you move to Kyiv to work at Khlib Investbud? RB: When I came to Kyiv in May of last year, I originally headed the Ukrainian Agriculture Exchange. After working there for a period, I took charge of Khlib Investbud. KP: Did you have any prior experience in agribusiness? RB: I was active in business in various sectors, including industry, construction and development. I also had some interests in agribusiness in the Zakarpattya region. KP: Can you be more specific? What were the names of these companies or businesses? RB: I will answer the question by saying: Knowledge of certain laws replaces ignorance of the facts. I think that the managerial experience I gained, supplemented by my higher education, can be extrapolated to any sphere. KP: Who was it that knew your abilities so well that they offered for you to become head of Khlib Investbud, a company which government officials have granted such an important role?
Business 7
May 13, 2011
Robert Brovdi
RB: We are spending too much time talking about my personality. Let’s better turn to a discussion of professional issues. KP: But it is an important question, especially in light of the lack of clarity about Khlib Investbud, which market players describe as a “quasi-state” company. For example, Jorge Zukoski, head of the influential American Chamber of Commerce in Ukraine, called Khlib Investbud the main “beneficiary” of non-transparent processes under way in the grain business, namely the disproportionate issuance of grain quotas. RB: After two allocations of quotas that were distributed [by the government] for more than four million tons of grain, Khlib Investbud received quotas for the export of only 870,000 tons. That is only 20.8 percent of the total. It should be noted that besides us, 26 companies received quotas in the first quota allocation and 29 in the second one. So, more than 50 companies received a certain amount of licenses for export. Perhaps they didn’t obtain what they expected, but the country had introduced the quotas for objective reasons. Of 35-40 million tons of grain produced, Ukraine consumes about 20 million tons. If the country hadn’t restricted grain exports, the question of what was left to consume inside Ukraine would have appeared within months. The state has to play a role in controlling grain exports because the lion’s share of the harvest is accumulated by export-oriented grain traders. [Editor’s Note: Sources said that Khlib Investbud received nearly half of all wheat quotas and about a third of corn quotas in a January allotment.] KP: If it is true that you didn’t receive an unfair share of quotas, why is there so much criticism from the side of other market participants directed towards you? RB: Apparently, when a new player comes onto the market, it triggers negativity from the side of competitors. Considering that grain trading is a rather lucrative business and our competitors have much money, they are playing a record which they want to listen to. KP: But another bone of contention is that the ownership of Khlib Investbud is unclear. The
state is a majority owner of such an important company, but neither the prime minister nor agriculture minister can say who the state’s partners – private stakeholders – are? RB: Speaking about Khlib Investbud, the creation of state operator on the market was based on many factors. There is a situation in the country where we have an army of farmers (nearly 90,000) on one side, and an army of grain traders (about 5,000, including 20 big ones) on the other side. Each player on this market has its interests. When a trader buys grain from a farmer, he is guided solely by global market conditions. But there is also the state which wants to preserve the national patrimony – the Ukrainian farmlands – and also aims to increase the country’s food production and protect the national producer. KP: Has Khlib Investbud become the state’s partner in protecting food security? RB: No, the State Food and Grain Corporation of Ukraine (a.k.a. DPZKU), created in the end of last year, became this partner. This 100-percent stateowned company received the assets of state company Khlib Ukraine.Those assets consist of 49 grain silos, including two port silos in Odessa and Mykolayiv. The assets also include 21 flour mills that can produce 10 percent of the nation’s flour needs and, in turn, provide affordable bread and cereals for those that need it. DPZKU aims to become a vertically integrated agriculture producer. It is building up a fleet of 1,000 harvesters, 500 of which will start operation in coming months. Another aim of DPZKU is creation of its own farmland bank. The strategy for the next three years is to develop production, storage and processing. In accordance with the law on state procurements, DPZKU could not [itself take part in tenders to become the grain trader buying up grain on the market to build up state reserves. The legislation prohibits a company with more than 50 percent state ownership from taking part in such tenders.] \ Therefore, Khlib Investbud, a grain trading company in which DPZKU owns a 49 percent stake, was created. Private investors own a 51 percent stake in our company, but they have no claim on state property such as silos or ports, which are owned by DPZKU. Their assets will remain in state ownership. KP: You are speaking in the tone of a government official, despite the fact that your company is only partly state-owned. What upside or interest exists for private investors who put money in your company? RB: The private investor in Khlib Investbud is a company called Kalasar. Its only role is to attract investment. We hope to attract some $3 billon in coming years. This private investor will obviously share in profits. We are selling grain, whose world price significantly differs from the internal Ukrainian one. So the foreign capital that was attracted by our company has a guaranteed liquidity. But in the midst of this, Æ19
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#64*/&44"%7*4&3 M&A in Ukraine: Through adversity to the stars
A
rmen Khachaturyan, senior partner of Asters, comments on M&A trends and recent legislative changes affecting M&A transactions in Ukraine. How would you describe the specifics of Ukrainian M&As in recent years and prospects for the near future? As in other countries, M&A deals in Ukraine over the last ARMEN KHACHATURYAN two years were often motivated not by the desire to senior partner of Asters maximize returns, but rather by the need to save businesses in a very challenging environment. Acquisition of distressed assets structured either as an asset or equity deal dominated the market. Most of these acquisitions were completed on an expedited transaction pace, often with or without limited due diligence, and in many instances without outside legal assistance due to commercial arrangements and higher standard of confidentiality. Some of the larger deals were structured as leveraged buy-outs with the involvement of financial institutions, mostly Russian banks assisting Russian investors. Therefore, the distribution of risks associated with the acquisition target or the merger partners became the main subject of negotiation in many M&A transactions. Given that the Ukrainian economy is showing signs of substantial improvement in 2010 and in early 2011, with GDP growth expected at a 4.3 percent annual rate and international business groups (with Russia taking the lead) showing a keen interest in Ukrainian assets, it is reasonable to expect a substantial rise in M&A activity in 2011 going beyond taking a distressed asset strategy and moving toward industry consolidation and strategic investment. What are the most promising sectors for M&A activities in 2011? Agriculture, energy, food, telecommunications, and banking will be in demand. Many commercial banks, which were painfully hit by the crisis and which are now under scrutinized regulatory requirements, would view a merger as an escape from a problem. Consolidation is a logical step for banks that are controlled by the same group. Mergers were recently announced between UniCredit Bank and Ukrsotsbank and between Dongorbank and FUIB. It is hoped that more will follow as banks must take significant steps in order to survive in the post-crisis market. What are the recent legislative changes affecting M&A strategies in Ukraine? Legislators have continued fine-tuning the Joint-Stock Companies Act (JSC Act) effective from April 2009. While the JSC Act prescribes detailed procedures for statutory mergers, demergers, and spin-offs, including corporate protection of minority shareholders, some of these procedures create unnecessary obstacles for a company’s M&A plans. In February 2011, the JSC Act was amended to remove a previously existing requirement that a JSC can only merge with another JSC and not with a company incorporated in any other form. Similar limitations that were applicable to demergers and spin-offs were also lifted. In addition, the amended law, effective on 1 January 2012, excluded the possibility for a private JSC to provide in its charter for the JSC’s pre-emptive right to buy shares from its shareholder upon other shareholders waiving their respective pre-emptive rights. Have the rights of majority or minority shareholders related to an M&A deal been affected by recent legislative amendments? One of the important proposed amendments in which a 95 percent shareholder can forcefully buy-out the remaining shares called the majority shareholder's drag-along right did not become law due to the President’s veto based on the argument that such a rule would violate minority shareholder(s)’ proprietary rights guaranteed by the Ukrainian Constitution. Unfortunately, such forced buy-outs which are rather standard legal practice and common sense in many jurisdictions with well established protection of private property will need to be “re-invented” in Ukraine and introduction of this rule intended to ease the acquisition strategies has been now postponed for some time in the future. At the same time, the JSC Act preserved (a) minority shareholders' tag-alone rights requiring an acquirer of at least 50 percent of common stock in a JSC to make an offer to all remaining shareholders to buy their shares and (b) quasi drag-alone rights of shareholders voting against a material transaction, merger, demerger or spinoff and some other major changes entitling them to demand that the JSC repurchase their shares. What else does legislation allow for M&A and corporate transactions other than JSCs? Although most major businesses, in particular former state enterprises and banks, are incorporated in the form of JSCs, in terms of absolute numbers the most popular corporate form is a limited liability company (LLC) which overall is subject to much less stringent regulation than JSCs, including M&A matters. However, their major handicap is that LLCs cannot have more than 10 members. The draft Limited Liability Companies Act, which envisions reforming regulation, is pending in Parliament since 2009. What Ukrainian legal controversy is most frequently considered while structuring M&A transactions? The High Commercial Court in its Recommendations of December 28, 2007 (the Recommendations) opined that the application of foreign law to corporate law matters in Ukrainian companies offends Ukraine’s ordre public. It advised lower commercial courts to hold null and void any shareholder agreement between members of a Ukrainian company which is governed by foreign law. For this reason such agreements have sometimes been declared unenforceable in Ukraine, even where their enforceability was confirmed in international commercial arbitration. This position of the High Commercial Court has been strongly criticized by many academics and practitioners, but, notwithstanding this negative reception, the controversial Recommendation remains effective and substantiates actual judgments. In practice this has resulted in most M&A structures being done through an off-shore holding where the above limitations do not apply.
ASTERS
Leonardo Business Center, 19-21 Bohdana Khmelnytskoho Str., Kyiv, 01030 тel. + 380 44 230 6000, fax + 380 44 230 6001 info@asterslaw.com, www.asterslaw.com
8 Business
www.kyivpost.com
May 13, 2011
Inside HR
Staff Service is a partner of Inside Human Resources
Companies look for creative approaches to hire people BY K AT YA G R U S H E N KO GRUSHENKO@KYIVPOST.COM
Style your hair with some mousse. Take a color marker and draw a new hair design that would make you stand out in the crowd at a cool rave party. Come home and wash it off with no harm done to your locks. A team of Ukrainian students came up with this idea to expand the L’Oreal’s professional line for young men. They took part in the company's “BrandStorm” contest and won. The contest aims to identify future marketing gurus and employ them. It kicked off in November for the first time in Ukraine. The winners will compete in Paris against teams of students from around the world and are likely to win jobs within the cosmetics giant. As employment is picking up again in Ukraine, a growing number of international companies such as KPMG, Unilever, Henkel and others find that participating in employment fairs and talking to university students is not enough. They sponsor contests for young and ambitious graduates in hopes of finding the best talent. The students get to be confronted with real business situations as company managers get the chance to evaluate their performance. “If we want to attract outstanding people, we need to take an outstanding approach and offer them more,” said Irina Pryadkina-Kamiri, human resources director at L’Oreal Ukraine. For “BrandStorm,” students had to start their projects from scratch. They did market research, created an innovative line of products and invented a publicity campaign. To assist, L’Oreal employed a marketing agency and supplied mentors. Somewhat similar is Henkel’s Innovation Challenge, which has been in place since 2007 internationally and
Æ In search for talented employees, firms are getting creative will start this year in Ukraine. Students will be asked to predict consumer needs in 2050 and develop product ideas for Henkel. Pryadkina-Kamiri of L’Oreal said that student teams have in the past come up with applicators for cosmetics that have already been added to the beauty company’s line of products. While the fast-moving consumer goods sector is always in need of fresh and innovative marketing ideas, more conservative businesses have also started applying different approaches to hiring. Two years ago, KPMG launched the International Case Competition in Ukraine, where participants had to solve a business problem and present it to the jury of the company’s top managers. This year, participants competed in the semi-finals in Moscow and in Istanbul for the finals. Apart from hands on business experience that all taking part benefitted from, the top 5 percent of participants in Ukraine received jobs with KPMG. “A resume only shows the previous achievements of the candidate. A job interview doesn’t always point out personal and profession traits. During the creative competition, participants get a chance to demonstrate their skills and character to the full extent,” said
Editor’s Note: The Kyiv Post is launching a new project called Inside Human Resources, a guide to employment and the job market. To contribute articles, contact senior editor Brian Bonner at bonner@kyivpost.com.
L’Oreal: BrandStorm • Started in Ukraine: 2011 • Goal: Create a new line of products for L’Oreal • Who can apply: Undergraduate and graduate students with economics and marketing majors who want to try themselves in marketing • When to apply: October-November 2011 • How to apply: Find and follow L’Oreal on Facebook • Language: English • Reward: Ukraine winner travels to Paris for a competition, possible internships and job offers
Henkel Innovation Challenge
Alla Protsenko, Anton Bezkorovayny and Anastasiya Gladun are economics students at Kyiv Mohyla Academy. They won the L’Oreal BrandStorm contest and will compete internationally in Paris on June 15-16. (Courtesy)
Natalya Butenko, human resources director at KPMG. “People who come to the company through such contests usually show not only professional qualities, but also a strong life position and their support of social initiatives,” she added. According to many human resources specialists, the drawback of such competitions is usually that they are lengthy, sometimes costly and don’t yield immediate results. Oksana Chernikova is director of the human resource department in Ukraine for Deloitte, one of the world’s so-called Big Four accounting and auditing firms. Deloitte, she says, applies creative hiring techniques to improve the efficiency of recruitment. It also helps “cut costs,” she added. After rigorous testing and interviews, Deloitte invites the best candidates to solve business cases, such as analyzing the business side of creating
a chain of low-cost hotels or building a Disneyland in Kyiv. That is usually followed by an informal social gathering with the company’s senior personnel. “Our auditors have to work most of their time outside of the office,” Chernikova said. “When candidates are presented with business cases, we test whether they can stay concentrated and productive in a stressful situation. While candidates can prepare tests and rehearse for job interviews, case solving in front of everyone shows who they really are. Candidates also have a chance to ask our top managers questions and decide whether they really want to work at Deloitte during cocktails.” Chernikova said that the approach helps increase the odds of hiring success. Kyiv Post staff writer Katya Grushenko can be reached at grushenko@kyivpost. com
• Started in Ukraine: Tentatively will start in July 2011 • Goal: Come up with the ideas for new products at Henkel considering needs of consumers in 2050 • Who can apply: Students from any educational background • When to apply: Tentatively July 2011 • How to apply: Participants should form a team of 2-3 students, upload the innovation document and each team members' CVs. All applications are accepted via the Henkel website • Language: English • Reward: Ukraine winner travels to a foreign country for an international competition, extensive mentoring, support from one of Henkel’s top senior managers and possible job offers
KPMG International Case Competition • Started in Ukraine: 2010 • Goal: Solve business cases, present the solutions in front of a jury of top managers • Who can apply: 4-5th year students, post-graduates with any background • When to apply: October-November 2011 • How to apply: Write an essay, complete application form on www. kpmg.com/ua • Language: English • Reward: Winner in Ukraine goes for a competition to a foreign country; best participants have a chance at employment
www.kyivpost.com
May 13, 2011
Business Focus 9
Special news coverage ahead on the following topics in Business Focus: June 3 Agribusiness & Food
July 1 Law firms/Top lawyers
July 22 Ukraine’s Energy Challenges
August 26 Education in Ukraine and adroad
September 9 Top Law firms
Ukrainian owners hold assets in anticipation of price growth BY V L A D L AV R OV LAVROV@KYIVPOST.COM
When the global economic crisis of 2009 hit Ukraine super hard, many expected a surge in merger and acquisition activity to follow in which cashstrapped Ukrainian owners would dump their distressed assets. But it didn’t happen. Despite being amongst the hardest hit economies worldwide, with gross domestic product dropping 15 percent in 2009, there appeared to be almost no panicky cheap selloff of assets in Ukraine. In the aftermath, Ukrainian owners of businesses also proved to be among the toughest negotiators. They were squeezed financially and cut off from cheaper loans that they had access to in prior years. Yet, they still stubbornly held on to their assets during crisis years when cash was considered king, and refused what they saw as low asking prices in the hopes that pre-crisis peak values would return within years. Viacheslav Yakymchuk, partner at the Kyiv office of Baker & McKenzie - CIS, an international law firm, thinks that the strategy may work, especially since more affordable financing instruments – international credit and capital markets – are beginning to reopen for Ukraine. Yakymchuk and his law firm are amongst the strongest authorities on M&A deals involving Ukrainian
Æ Many owners preferred to go bankrupt than sell cheaply assets. Baker & McKenzie has worked on Ukraine-related M&A deals worth more than $8.5 billion. That’s nearly a quarter of the combined value of total Ukraine-related M&A deals. In this Kyiv Post interview, Yakymchuk reveals more about the M&A market in Ukraine. Prices are recovering, although the time of super high asset valuations seen before the crisis hasn't come yet, he said. Kyiv Post: What has changed since pre-crisis times? Viacheslav Yakymchuk: M&A activity picked up across the board in all sectors of Ukraine’s economy. Number one I would say is the food and beverages sectors. We also see a lot of activity in the pipeline, starting with the telecommunications, healthcare sector, agriculture, metallurgy, financial ser-
bank would buy Ukrainian financial institutions using very high [price valuations]. So, there are some transactions, but they are nowhere near the [precrisis] multi-billion dollar deals. All the foreign players [who wanted to enter Ukraine’s banking sector] are here, and now they would probably like to exit. Take, for example, ING Bank. During the crisis, it decided to close its retail office in Ukraine.
Viacheslav Yakymchuk. (Alex Furman)
vices and fast-moving goods. Out of all these, we can say that the agriculture, food and beverages sectors are the most attractive now. Prior to the crisis, the biggest transactions were in the banking sector. This is no longer the case. Currently, the main activity in this sector is larger banks buying medium-sized banks. For example, Ukrainian banks such as Platinum Bank and First Ukrainian International Bank are buying other mid-sized banks. There was the recent sale of VAB Bank. Prior to the crisis, the most common transaction in this sector was when a large international
KP: Despite the common belief that agriculture is the most attractive sector in Ukraine’s economy, M&A activity in this sector appears to have been very low. There were eight deals worth $21 million over the last 10 years. How do you explain this? VY: The biggest challenge for M&A transactions is agreeing on a purchase price. There is a gap in the expectations of the Ukrainian seller and the foreign purchaser. This gap remains huge. In 2010-2011, the deals that we closed were just a small percentage of all the transactions that we worked on. So, there is a lot of interest, but the deals are not closing. And the main reason for this is price disagreement. Many companies, specifically those working in the agriculture sector, prefer an initial public offering as the option to finance their development programs,
as it does not involve giving up control to a foreign investor. I would say this is the hottest strategy on the market. Often, if the seller and the buyer fail to agree on a price, Ukrainian asset owners go this way. KP: Are you saying there was not such a sharp fall in the value of Ukrainian assets? VY: Well, prices fell globally, including in Ukraine. But Ukrainian sellers see that the economy has started to grow. And they want to sell at the precrisis prices. Everybody wants pre-crisis prices, but foreign buyers are not ready to pay them. They still want to make a good deal at normal prices, so that’s why many of the potential deals fall apart. Ukrainian owners of businesses, meanwhile, prefer an IPO. Through this option, they can sell 30 percent of their shares in the process, use the money to develop their business, and sell the entire business later at the valuation they want. Ukraine stands apart from many other countries. We didn’t see [many] M&A selloffs of distressed assets during the crisis, in which owners were desperate to sell at any price. KP: How come? VY: There are economical as well as psychological reasons. I know many owners who said: ‘I would rather go Æ12
10 Business Focus
www.kyivpost.com
May 13, 2011
M&A activity picking up in promising agribusiness sector BY O K S A N A FA RY N A
Ukrainian M&A trend from 2001 to 2011*
FARYNA@KYIVPOST.COM
While overall merger and acquisition activity in Ukraine remains far below pre-crisis levels, a flurry of important deals unraveled in early 2011 involving assets in Ukraine’s promising agribusiness sector. Experts said a handful of cash-rich Ukrainian agribusiness tycoons led the recent surge of activity by snapping up smaller businesses that are well-positioned to profit greatly in the future from Ukraine’s rich farming land and potentially huge food sector. With demand for Ukrainian farming and food businesses destined to grow in pace with global food demand, experts predict that international agribusiness groups from the West and as far away east as China will in coming years sharply boost their presence in Ukraine via M&A transactions. With such dynamics at play, Ukraine’s agribusiness sector is on course for a period of consolidation that could, in turn, bring in the billions of U.S. dollars in fresh investment that are needed to turn this nation once described as the “Breadbasket of Europe� into a top world food supplier. “All major agribusiness holdings in Ukraine are currently eyeing expansion through acquisitions and are building up their farming land banks,� said Vitaliy Strukov, managing director at Kyiv-based investment bank Concorde Capital.
10
75 Value ($ billion) (Left)
8
Number of Deals (Right)
50
6 4
25 2 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011*
0
Source: mergermarket Announced, excluding lapsed and withdrawn deals
“We expect about 20-30 deals worth $1.5-$2 billion to close in the sector this year,� Strukov added. International agriculture giants from Europe and the U.S., including Cargill, ADM, Toepfer and Bunge, have long established a solid presence in Ukraine through M&A deals and greenfield projects. In the long term, they are likely to further expand in Ukraine. But damaging export restrictions on grain exports imposed last year by government could make them hesitate on closing acquisitions in the near-term. More eager to jump in and get a larger share of the mushrooming Ukrainian market are Russian agricul-
ture conglomerates such as Cherkizovo Group, Rusagro and Prodo. Sources said they are already holding negotiations. Several deals involving Russian buyers could be announced by the end of the year. If the deals go through, the Russian groups will be following in the footsteps of domestic agribusiness companies which, for now, remain the most active buyers and sellers of everything from farms, sugar refineries and food processing businesses.
Reaping the harvest In March Kernel, Ukraine’s top sunflower oil producer bought a 71 percent stake in Ukrros, the nation’s third
Having established the first foreign law firm in Ukraine - we continue to establish the highest standards
biggest producer of sugar. Kernel paid $42 million for Ukrros and agreed to cover its $100 million debts. Sources said that Kernel plans to spend about $350 million more this year on acquisitions. Kernel is controlled by lawmaker Andriy Verevsky. Another acquisition-hungry rising star in Ukrainian agriculture is Oleg Bakhmatyuk. He has been on a shopping spree for agriculture assets ever since his Avangard egg products company raised $210 million last June by floating a 20 percent stake on the London Stock Exchange. Some analysts say the western Ukrainian could now be the single largest owner of agriculture land in the nation. The farming business in Bakhmatyuk’s agribusiness empire is managed by his Ukrlandfarming company. In early 2011, Ukrlandfarming acquired Rise and Dakor, making it the second largest sugar producer in Ukraine after Astarta. The value of the deals was not disclosed but experts estimate it as about $500 million including debt and equity. Also this year, a separate company controlled by Bakhmatyuk paid about $25 million for a poultry business in the U.S. For now, a large share of the focus has been on acquiring companies that have long-term leases on agriculture land. M&A activity could shift into higher gear if Ukraine’s government
makes good on its promise to cancel a longstanding moratorium on the sale of agriculture starting next year.
Across the board Apart from agriculture, experts said M&A activity is starting to simmer in other areas, foremost banking, chemicals, fast moving consumer goods and retail. In general, however, buyers remain cautious about closing deals, said Natalia Khoruzhaya, partner at the Kyiv offices of KPMG, one of the socalled Big Four accounting and auditing firms. “M&A activity has a cyclic nature. It depends on many factors,� she said. “Global volumes of M&A transactions won’t reach peak levels of 2007 until about 2013-2014.� While the average value of the deals remains low, by far the biggest M&A transaction in Ukraine this year is the privatization of fixed-line telephone monopoly Ukrtelecom. In March, Ukraine’s State Property Fund sold a 92.79 percent stake in the company for $1.3 billion to EPIC, an Austrian investment firm. The sale was widely seen as uncompetitive. Analysts and experts say that in making the purchase, EPIC most likely represents the interests of businessmen close to Ukraine’s political leadership. EPIC denies such accusations. Kyiv Post staff writer Oksana Faryna can be reached at faryna@kyivpost.com
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Business Focus 11
May 13, 2011
Top 10 M&A Deals in 2011 Editor’s Note: The following is a list compiled by the Kyiv Post of some of the most notable merger and acquisition transactions in Ukraine this year.
Ukraine's third biggest sugar producer. Kernel paid about $42 million for the equity and agreed to cover debts of $100 million.
Ukrtelecom
Cherkasy Azot
It is hard to consider this year’s privatization of a 93 percent stake in fixed-line telephone monopoly Ukrtelecom as a classical M&A transaction. For one, it was a privatization deal. Secondly, controversial conditions of the privatization auction excluded many top investors from taking part. As a result, only one bidder took part. And in the end, the market is convinced that the new owner, Austria’s EPIC, represents domestic business interests as a front. Nevertheless, Ukrtelecom was acquired by the group for $1.3 billion, making it the second largest privatization acquisition in Ukraine’s history after the 2005 $4.8 billion purchase Kryvorizhstal by Mittal Steel (Today ArcelorMittal). Ukrtelecom’s privatization also deserves attention because the company owns Ukraine's sole license for 3G telecommunications.
Ukrainian billionaire Dmytro Firtash is estimated to have paid about $800 million for chemical factory Cherkassy Azot. Analysts estimate that Firtash, whose business interest span from the lucrative natural gas business to titanium and media, spent “billions� since August 2010 to acquire Cherkassy Azot and two other chemical plants: Stirol and Severodonetskbased Azot. All three were sold by Ukrainian businessmen. In closing the acquisitions, Firtash, who is close to the inner circle of President Viktor Yanukovych, established himself as one of the top chemical industry players in Europe.
Rise, Dakor Early this year, Oleg Bakhmatyuk’s Ukrlandfarming acquired two large agribusinesses. He is estimated to have paid about $40-50 million for Rise, which cultivates 180,000 hectares of land in Ukraine and owns a grain storage facility. To buy Dakor, the nation’s second largest sugar producer, Bakhmatyuk is estimated to have paid about $15-20 million, a big discount considering that he agreed to pay the group’s large debts. Dakor cultivates 100,000 hectares of land and also has a grain storage facility.
Ukrros Leading sunflower oil producer Kernel bought a 71 percent stake in Ukrros,
KP Media American publisher Jed Sunden sold KP Media, which publishes Korrespondent, a popular weekly magazine and news portal, and Bigmir.net, a leading Internet portal. The buyers are oligarch Petro Poroshenko and media magnate Boris Lozhkin. Sunden was reportedly seeking $15-18 million.
Inkerman In January, Horizon Capital, a private equity fund, and Hartwall Capital of Finland, bought a stake in Crimeabased Inkerman, one of Ukraine’s largest wine producers. The sale price was not disclosed.
Home Credit Bank At the end of 2010, Czech Home Credit Group exited the Ukrainian banking market by selling Home Credit Bank,
a relatively small domestic bank operation, to Ukraine’s Platinum Bank. The latter is owned by Horizon Capital, East Capital and the International Finance Corporation. Plans envision that Home Credit’s Ukrainian operations will be integrated into Platinum Bank. The transaction was closed in February 2011.
Renaissance Capital Bank Renaissance Group sold its relatively small Ukrainian banking operation, Renaissance Capital Bank, to System Capital Management, the holding company of Ukraine’s richest man, Rinat Akhmetov. The acquisition was completed on March 11. The value of the deal has not been disclosed.
VAB Bank In January, TBIF Financial Services, a Dutch company which represents the interests of Israeli investors, sold an 84 percent stake in Ukraine’s VAB Bank to an unknown group of foreign investors for $69 million. According to January note to investors produced by Renaissance Capital, the new owners were represented by Troika Dialog, an investment bank that is active in Russia. The sale comes after VAB bank doubled its losses in 2010 to $78 million.
BG Bank In February, the Bank of Georgia sold an 80 percent stake in its Ukraine’s subsidiary, BG Bank, to a group of domestic investors. The total cost of the deal, including consulting services by BG Capital, was $9.6 million. In March, BG Bank was renamed to Bank Pershyi.
Peter Goldscheider, managing partner of Austria’s Epic, says his investment group is not acting as a front for Ukrainian oligarchs. (UNIAN),
Ukrtelecom sale closed, tender casts doubt on privatization transparency KYIV POST STAFF
Austrian investment company Epic paid the final installment of it $1.3 billion purchase of a 93 percent stake in fixed-line monopoly Ukrtelecom on May 10, concluding the first major privatization since President Viktor Yanukovych took office in February last year but leaving serious questions over transparency. Ukrtelecom was sold to Epic after it was the sole bidder in a tender in December that analysts said was uncompetitive as it excluded potential bidders such as Norway’s Telenor and Deutsche Telekom because of strict conditions. Some suggested Ukraine could have pulled in $500 million
more in much-needed cash for its share in the company, which has lost value over the years as governments have wrangled over its sale. Market insiders have said Epic could have been acting as a front for Ukrainian oligarchs. Epic denies this, and the government refutes claims of an unfair tender. Yanukovych and his government claim they have tirelessly sought to burnish Ukraine’s investment reputation to give the country’s limping economy a boost. But critics said the failure to have a competitive bidding process and sell for a higher price hurt Ukraine’s reputation as a friendly destination for investors. The privatization process Æ13
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12 Business Focus
www.kyivpost.com
May 13, 2011
Top 10 merger & acqusition deals from 2001 through April 29, 2011 Announced
Company
Target/Seller Financial Advisor
Sector
Asters; Egorov, Puginsky, Afanasiev & Partners; Loyens & Loeff; Magisters; Orrick Herrington & Sutcliffe; Skadden Arps Slate Meagher & Flom
Bidder company
Bidder Financial Advisor
Bidder Legal Advisor
Deal Value ($ billion)
Seller
VimpelCom
Morgan Stanley; UBS Investment Bank
Akin Gump Strauss Telenor ASA; Hauer & Feld; Cleary Gottlieb Steen & Hamilton and Altimo (Advising Morgan Stanley)
5.3
4.4
Oct. 05, 2009
Kyivstar GSM
Oct. 24, 2005
ArcelorMittal Kryviy Rih (93%)
Industry
Mittal Steel Germany
CA IB Corporate Finance; UBS Investment Bank
Allen & Overy; Baker & McKenzie
March 11, 2007
A handful of steel assets
Industry
Evraz Group
Renaissance Capital
Sayenko Kharenko
July 05, 2007
Ukrsotsbank (95%)
Financial Services
Bank Austria
Credit Suisse; UniCredit Group
Allen & Overy
March 11, 2011
Ukrtelecom (92.79%)
Telecommunications
Feb. 14, 2006
Ukrsotsbank (88.55%)
Financial Services
Merrill Lynch
Chadbourne & Parke; Clifford Chance; Magisters
Intesa Sanpaolo
FinPoint; Rothschild
Studio Pedersoli e Associati; Weil Gotshal & Manges
1.2
Aug.21, 2005
Aval Bank (93.5%)
Financial Services
FinPoint; Merrill Lynch
Asters; Skadden Arps Slate Meagher & Flom
Raiffeisen Bank International
Raiffeisen Investment
Beiten Burkhardt
1.0
Linklaters
Vnesheconombank, group led by Alexander Katunin
Troika Dialog
Squire, Sanders & Dempsey, Troika Dialog
Sergey Taruta and Oleg Mrktchan (private investors)
1.0
Royal Bank of Scotland
Hammonds
James MakGlotlinu (private investor)
0.9
CMS; Vasil Kisil & Partners
Raiffeisen Bank International
0.8
Jan. 08, 2010
Apr. 30, 2009 June 01, 2006
Telecommunications
ING; Advising seller: JPMorgan; Rothschild
Target/Seller Legal Advisor
Advising seller: Merrill Clifford Chance Lynch
Raiffeisenbank Bank Ukraine
3.0
ESU
Industrial Union of Donbass Industry Corporation (50.01%) United Coal Company
State Property Fund
Energy & Mining
UBS Investment Bank
DLA Piper; Venable
Metinvest Holding
Financial Services
Advising seller: FinPoint
Freshfields Bruckhaus Deringer
OTP Bank
Interpipe Corporation
2.2
State Property Fund of Ukraine
1.3
Source: mergermarket
& ! ) - * )0 - ! $ ' % !! "!" #$ $$ , /' % !! "!" #" " ,, (+
... +
Yakymchuk: Big steel deals were driven by politics Æ9 bankrupt than sell cheaply. I would rather destroy the company altogether.’ Another reason is that Ukrainian banks readily allowed companies to restructure debts and delay payments. A few of our clients who wanted to buy assets in Ukraine during the crisis would approach owners of indebted companies, who would still demand pre-crisis prices, or not sell at all. When they were reminded of their hundred million dollar debts to the banks, they would respond that dealing with the banks is not a problem. Ultimately, M&A activity resumed in 2010 because the prices offered became satisfactory for the sellers. KP: Were there any landmark M&A deals that served as a signal that the crisis is over on the Ukrainian market? VY: Let’s be honest. All the big transactions involving steel industry assets
were not classical M&A deals. Though large deals in terms of their value, they were very politically driven deals. The landmark deal that showed that the crisis is over came in February of 2010 when Nestle, [the multinational food giant,] paid a very high price for Technokom, the Kharkiv-based producer of Mivina instant noodle products. We started working on this deal during the crisis with many potential buyers withdrawing from negotiations. Then we started negotiations with Nestle. Closure of the deal demonstrated that confidence in the Ukrainian market among such powerful strategic investors has returned. Again, I am not talking here of such transactions as Zaporizhstal and Industrial Union of Donbass [that were reportedly acquired by secretive Russian buyers]. Kyiv Post staff writer Vlad Lavrov can be reached at lavrov@kyivpost.com
Top 10 Ukrainian Legal Advisors 2001 through April 29, 2011 Rank
House
Value ($ No. of million) Deals
1
Baker & McKenzie
8,515
30
2
Allen & Overy
7,072
7
3
Sayenko Kharenko
5,811
21
4
Akin Gump Strauss Hauer & Feld
5,583
2
5
Cleary Gottlieb Steen & Hamilton
5,328
1
6
Asters
4,753
5
7
Skadden Arps Slate Meagher & Flom
4,022
5
8
Magisters
3,454
7
9
Clifford Chance
3,109
4
10
Egorov, Puginsky, Afanasiev & Partners
3,010
2
Source: mergermarket
Ukrainian M&A sector breakdown from 2001 to 2011 Media (1,340) Energy, Mining & Utilities (1,568)
4.1%
0.4% Construction (116)
8% 4.8%
22.6% Telecommunications (7,466) 0.5%Transport (149) Ag Agriculture (21) 0.1% 0 1,4% Business Services (460) 0.3% Technology (103) 0.3 Medical 0.2% Pharma, 0 & Biotech (70) 0.1% Leisure (49) Estate 1.6% Real (520) 6.2% Consumer (2,040)
% 31.2%
Industrialss & Chemicals cals (10,293)
he combined x.x% - share in the value of M&A deals (XXX) - $ value off M&A deals in sector (millions) Note: Based on announced d deals, d l excluding l di llapsed d and d withdrawn ithd bid bids Based on dominant geography of bidder Based on period betwewen 01 Janaury 2001 - 29 April 2011 Data correct as of 05-May-2011
Financial
26.6% Services (8,782) Source: mergermarket
www.kyivpost.com
May 13, 2011
Business Focus 13 Advertisement
Business Sense
Editor’s Note: Business Sense is a feature in which experts explain Ukraine’s place in the world economy and provide insight into doing business in the country. To contribute, contact senior editor Brian Bonner at bonner@kyivpost.com
WITH JOHN MARONE
A few bright lights exist on mergers & acquisitions scene Ukrainian banks and retail chains aren’t likely to see a return any time soon to the high valuations and investor interest that they enjoyed in 2008. However, the European financial giants that entered the market in the second half of the last decade aren’t exactly beating a retreat, while Ukrainian chains of everything from supermarkets to electronics continue to either expand organically or stick it out in hopes of better offers to come. On the upside, the national supermarket chain Furshet continues to open new and remodel existing stores, which now exceed well over 100 across the country. But beyond the top 10 percent of Ukraine’s food retail sector, brands are weak, debts are high and assets largely limited to stock, making it difficult to find investment. Nevertheless, at least one Polish private equity firm, Abris Capital Partners, has responded to the call for consolidation, following up from its 2008 purchase of the west Ukrainian retail chain Barvinok with the 2010 acquisition of another west Ukrainian chain, Torgovy Svit, in what could turn out to be an example of regional consolidation. The Ukrainian do-it-yourself and hypermarket chain Epicenter is rumored to be taking a different track: seeking acquisitions of suppliers in nearby Poland and financing them on the Warsaw Stock Exchange. As was the case with its retail sector, Ukraine’s banking was hit particularly hard by the 2008 financial crisis. But having spent billions of dollars to enter the market, European giants such as Austrian Raiffeisen or Italian Unicredit are not expected to write off their losses and sell. Swedbank, which has less of a strategic interest in Ukraine than other European parents do, is already looking for a buyer, according to Kommersant Ukraine. However, other banks are waiting for an expected rise in gross domestic product to fuel consumption and thus borrowing.
Æ Energy, agriculture sectors are promising; others wait for recovery Another possible option is equity finance from the European Bank for Reconstruction and Development, which already has already helped out most of its fellow European lenders in the past. The EBRD recently announced its purchase of a 15 percent stake in UkrSibbank, which is part of France’s BNP Paribas Group. More such deals could be in the works for Ukraine’s biggest investor. The real buzz word for Ukrainian mergers & acquisitions these days, however, is agriculture. This is despite all the negative press that the country has gotten from the government’s heavy-handed restriction of grain exports and the legal confusion that surrounds an anticipated cancellation of the ban on farmland sales. But while the country’s agri barons bask in their newly attained status as Forbes billionaires, the greater number of M&A deals in this sector are happening below the radar screen, with foreign investors being just as cautious and focused in their purchases as smaller Ukrainian players. Yury Kosiuk’s Mironivsky Hliboproduct, the listed, largest Ukrainian chicken producer, is planning acquisitions in Poland, Parkiet reported. Kernel, the listed agricultural group owned by billionaire Andriy Verevsky,
continues to flex its acquisition muscles, looking at Ukraine as well as the near abroad. The same can be said of Oleg Bakhmatyuk’s egg-making Avangard, whose sister company Ukrlandfarming was widely reported to be behind the purchase of debt ridden Rise Group earlier this year. But few have probably heard about the 2010 purchase of a Ukrainian corn grits plant by listed Mexican corn flour and tortilla producer Gruma for $9 million; or of listed Ukrainian sugar maker Astarta’s purchase of two sugar processers in Ukraine this year alone. This mix of large and small acquisitions by Ukrainian and foreign investors should continue into the near term. In another trend, a growing number of smaller and mostly Ukrainian agricultural companies are taking the initiative by courting institutional investors through IPOs held on the Warsaw Stock Exchange. Warsaw, closer and less expensive than London, is becoming the place where tiny agro newcomers such as Agroliga, midsized newcomers such as Agroton and internationally recognized giants such as Kernel sell their stock. Lastly, don’t write off the energy sector, despite the difficulties experienced by London-traded mainstays such as Regal and Cadogan. While the multinationals are still clamoring to get in on production of increasingly high priced gas and oil, smaller and more agile foreign investors are already on their way to exploring for shale gas or building wind farms. Ukraine’s green tariff has leveled the playing field for foreign investors, and modern-day wildcatters such as U.S. BNK Petroleum and Australian Basgas are already on the ground looking for alternative gas prospects. John Marone, a former Kyiv Post chief editor, is a journalist with mergermarket. com.
Will next round of privatizations be uncompetitive, like Ukrtelecom sale? Æ11 also raised concerns, critics said, that other state assets could be sold off at below-market prices to well-connected oligarchs, as when Yanukovych was prime minister in 2004. Many other billion-dollar state assets are slated for privatization this year, including chemicals factory Odesa Portside Plant and energy generation companies. All could prove attractive to oligarchs close to Yanukovych, such as Dmytro Firtash and Rinat Akhmetov. Experts worry that these assets could be sold off much like Ukrtelecom in uncompetitive tenders, in turn, robbing cash-strapped budget coffers of much needed revenue. Epic, meanwhile, has denied any
connections with oligarchs. The company said it plans to restructure the company before exiting the investment in four to five years through a sale to a strategic investor or an initial public offering. Ukrtelecom will need a great deal of work to modernize its bureaucratic structure and help it recover from years of mismanagement. It has lagged behind European peers and lost corporate and private clients to higher quality services provided by privately owned mobile and fixed-line operators. But the company still has a number of strong points, including its control over about 80 percent of the country’s fixed-line market and Ukraine’s only 3G license.
Epic outlined its plans for Ukrtelecom in April, including eliminating lossmaking services, such as radio, telegraph and local calls. The company laid off over 4,000 employees in the first four months of 2011 on top of 6,000 in 2010, leaving just over 70,000 workers. Analysts at investment bank Dragon Capital said Epic would need to almost halve the workforce in order to bring the company’s productivity into line with European telecom operators. The bank said that any tough restructuring could meet resistance from the authorities, which in the past have played hardball with major investors on the social elements of privatization agreements.
Ukrainian M&A on the Rebound in 2011 M&A overview with Yevheniy Deyneko Senior Associate, CMS Cameron McKenna a leading European provider of legal and tax services. CMS Cameron McKenna is the UK-headquartered member of CMS with 13 offices in the UK, Central and Eastern Europe and beyond. The global economic downturn and financial crisis caused many investors to significantly reduce their M&A appetites in 2008-2009. In emerging markets like Ukraine the number and size of M&A deals decreased substantially. In 2010, however, M&A activity in Ukraine has picked up and gained in momentum which resulted in the total value of closed deals exceeding USD 6 billion. What awaits M&A market in Ukraine in 2011? Ukraine’s M&A prospects for 2011 look even more promising. Based on Ukraine’s gradual recovery after the economic downturn, investment experts and potential investors gave a thumbs-up to the Ukrainian M&A market in 2011 predicting the rise of both volume and value of deals. It is expected that not only domestic but also foreign investors (both strategic and financial) will be looking closer at Ukraine’s M&A opportunities this year. Experts believe that government’s privatisation plans as well as the impending EURO 2012 are very likely to attract increased attention to Ukraine. It is further expected that Russian investors (particularly, state-backed companies) and western buy-out firms active in CEE/CIS will be picking promising investment opportunities in Ukraine. Experts differ on a sectors focus of M&A activity, but many name metallurgy, agriculture, natural resources, consumer products retail and production, and financial services sectors as attractive areas for M&A opportunities. Is thorough due diligence really that important for an M&A deal in Ukraine? As in any other jurisdiction, risks identified in the course of a legal due diligence (DD), or areas in which DD information is unsatisfactory, are commonly dealt with in transactional documents. For instance, specific indemnities are sought from the seller on issues uncovered and representations and warranties covering material aspects as to the shares and assets of the target, including aspects which are not covered by a satisfactory DD, are set out in transaction documents. Unfortunately, the Ukrainian legal system (like in other CIS countries) does not recognize many buyer-protective common law concepts used under English and New York laws that traditionally govern the vast majority of M&A deals in Ukraine and other CIS countries. For example, the concept of commercial warranties as they relate to the target (target’s assets as opposed to the shares themselves) is not clearly defined in Ukrainian law with the result that the enforceability of such warranties in Ukraine becomes doubtful. The same enforceability concerns apply to indemnities and some contractual covenants (e.g., ordinary course of business, non-compete) the specific performance of which is also very unclear in Ukraine. As a result of the above, the normal mechanisms for buyer protection (warranty and indemnity protection) that are standard fare in English and European Union M&A practice, do not translate to Ukrainian transactions and thus an important part of a buyer’s defence becomes detailed and thorough upfront DD followed by practical steps to cure or mitigate the risks identified during such DD. This also explains why many investors are partnering up with Ukrainians to ensure that Ukrainian owners retain a stake (usually minority) in the business to keep them interested in the successful continuation and development of the business. What is a standard transaction structure for a deal in Ukraine? The various Ukrainian peculiarities described above explain why M&A deals in Ukraine, especially those involving foreign investors, are usually structured via foreign holding companies domiciled in tax jurisdictions with which Ukraine has favourable double tax treaties. In Ukraine, under the most typical structure, a buyer will purchase equity in a Cypriot or possibly Dutch holding company owning 100% equity in a Ukrainian operating company (or companies). If an investor buys not the entire equity but a majority stake (much rarer a minority stake), then the investor will enter into a shareholders agreement with its minority Ukrainian partner at the holding company level. The transaction documents are usually governed by English law (sometimes New York law or law of the EU based jurisdiction), and disputes arising out of them are subject to international commercial arbitration outside of Ukraine. The status and enforceability of a shareholders’ agreement with respect to a Ukrainian company is uncertain under Ukrainian law and, at the same time, Ukrainian courts treat choice of foreign law and arbitral tribunal in shareholder agreements in relation to such companies as contrary to public order and in circumvention of applicable law, and therefore void. This reiterates the need to have shareholders’ agreements concluded with respect to a foreign holding company. What are the deal norms in the Ukrainian M&A market? In Ukrainian M&A deals the most vigorously negotiated clauses are largely the same as in the US or in Europe, being: price and its adjustments, warranties and indemnities, the seller’s liability caps. CMS has just released the European M&A Study 2011 which identifies main legal trends in the M&A market for the period of 2007-2010 based on our review of over 1,000 deals and allows to forecast trends for 2011. Extrapolating the survey findings onto Ukraine’s market, it seems that M&A deals in Ukraine demonstrate the mix of approaches from both Europe (prevalently UK) and the US. This is, perhaps, explained by the fact that the majority of the M&A deals regarding Ukrainian businesses are governed by English law and, somewhat rarer, by New York law. The main features of M&A deals in Ukraine are robust broad warranties and extensive general (vigorously fought against by sellers) and specific indemnities resulting from DD. Use of post-closing price adjustments is quite common with the main criteria used being debt/cash and working capital. The locked box approach (when the price is set and no adjustments are agreed) is not as prevalent in Ukraine. Long limitation periods on general warranties (being in the range of 2 to 3 years) and high liability caps (up to 100% of the purchase price) are quite common in Ukrainian deals. In many Ukrainian deals de-minimis on individual claims and baskets are used with the buyer entitled to recover from the “first dollar� and not an “excess only�. Material adverse change (MAC) clauses allowing a buyer to walk away from the deal pre-closing in case of an event badly affecting the business are also common and vehemently debated in Ukrainian deals. Merger clearance is a common condition precedent for Ukrainian deals which is explained by the low economic thresholds triggering such clearance. The majority of contracts subject potential disputes to foreign commercial arbitration as opposed to courts. In sum, the pace of M&A deals in Ukraine appears to picking up steadily and we expect to see a number of interesting deals in various sectors in 2011.
CMS Cameron McKenna 6 floor, 38 Volodymyrska Str., Kyiv, 01034, Ukraine 5FM t 'BY www.cmslegal.com
14 Business Focus
www.kyivpost.com
May 13, 2011
MERGERS&ACQUISITIONS
Advertisement
Listing is arranged in alphabetical order TEL./FAX
TOP EXECUTIVE
OWNERSHIP, UKRAINIAN/ FOREIGN (%)
HEADQUARTERS
# OF FULL-TIME EMPLOYEES IN UKRAINE
MAIN SPECIALIZATION AND SERVICES
# OF M&A IN 2010
BIGGEST M&A DEAL IN 2010
INDUSTRIES
MAJOR CLIENTS
Aksonova & Associates audit firm, (in Ukraine since 2003), www.ap-center.com, Deputat@ap-center.com, 29E Vorovskogo Str., off.#10, Kyiv 01054, Ukraine (44) 482-27-88 (44) 482-28-58
Olena Makeieva
100\0
Kyiv, Ukraine
31
Audit, accounting outsourcing, business consulting, support in M&A procedures (reorganization of companies)
WND
WND
Agro, construction and real estate, publishing, food, investment and finance, pharmaceuticals and medicine, machine building, IT
WND
Arzinger, (in Ukraine since 2002 ), www.arzinger.ua, mail@arzinger.ua, Business Centre Eurasia, 75 Zhylyanska Str., 5th floor, Kyiv 01032, Ukraine (44) 390-55-33 (44) 390-55-40
Timur Bondaryev
WND
Kyiv, Ukraine
85
Legal Advice
8
Representation of Galychyna CJSC, a dairy market leader, in the deal on the merger of Galychyna CJSC and TD West Milk Group (Kovelmoloko OJSC)
Energy, retail and leisure, agriculture, infrastructure & transport, insurance, automotive, healthcare & pharmaceutics
Porsche, Strabag, Schwarzmüller, Claas, Bayer AG, Bunge, Henkel Group, SCM, Vienna Insurance Group, SHARP, YKK, Raiffeisenbank
Asters, (in Ukraine since 1995), www.asterslaw.com, info@asterslaw.com, Leonardo Business Center, 19-21 Bohdana Khmelnytskoho Str., Kyiv 01030, Ukraine (44) 230-60-00 (44) 230-60-01
Oleksiy Didkovskiy, Armen Khachaturyan
100/0
Kyiv, Ukraine
100
Legal services
6
Advised Telenor in transaction with Alfa Group involving the merger of assets between VimpelCom and Kyivstar G.S.M.
Agriculture, banking, food, insurance, media & telecommunications, pharmaceuticals, real estate & construction
Allianz AG, Coca-Cola, ED & F Man Holding, Element Six, ProfMedia, Telenor, Romstal Building, Sopharma AD, Swedbank
Audit Company HLB UKRAINE LLC, (in Ukraine since 1994), www.hlb.com.ua, office@hlb.com.ua, 8 P.Myrnogo Str., off.#6, Kyiv 01011, Ukraine (44) 222-60-10 (67) 466-17-77
Valeriy Bondar
100/0
London, UK
93
Audit, transformation (IFRS, GAAP), due diligence, tax & legal services, accounting, forensic expertise, M&A
WND
WND
Oil industry, agriculture, real estate, pharmaceutical, FMCG, retail, food industry, automotive
Ukrtatnafta, Christian Dior, L’oreal, Hellenic Bank, Naturprodukt Vega, Viterra, HARDEX, PROFINE, Remondis, Grain Alliance
Media and advertising, agriculture
Provided on the web-site
Audit, consulting, accounting, accompanying services, corporate finance, information technologies
Raiffaisen Bank Aval, OTP Bank, Lactalis, Oranta., Grawe Ukraine.
Audit Company OLGA Audit, (in Ukraine since 1997), www.audit.com.ua, olga@audit.com.ua, 39-41 Khoryva Str., Kyiv 04071, Ukraine (44) 545-65-35 (44) 545-67-77 (44) 545-65-25
Artur Surmenko
100/0
Kyiv, Ukraine
26
Audit, accounting, tax, M&A, due diligence, business planning and financial analysis, outsourcing
WND
WND
Audit Firm “RSM APiK”, (in Ukraine since 1992), www.rsmapik.com.ua, office@rsmapik.com.ua, 37/19 Donetska Str., Kyiv 03151, Ukraine (44) 501-59-34
Tetyana Bernatovych
100/0
Kyiv, Ukraine
60
Audit, tax, consulting
2
WND
Avellum Partners, (in Ukraine since 2009), www.avellum.com, info@avellum.com, Leonardo Business Center, 19-21 Bohdana Khmelnytskoho Str., 11th floor, Kyiv 01030, Ukraine (44) 220-03-35
Mykola Stetsenko
100/0
Kyiv, Ukraine
23
Mergers and acquisitions, banking and finance, capital markets, restructurings, antitrust/ merger control real estate, tax
More than 10
Sale of Vik Oil Group to TNK-BP (deal value – USD 313 mln)
Agriculture, banking and insurance, climate change, consumer goods, heavy industry, oil and gas, real estate and retail telecoms and media
Renaissance Group, Avangard, MHP, Kernel, Datagroup, Orangina Schweppes, Kyiv Investment Group, UkrFinance Group, PrivatBank
Baker & McKenzie – CIS, Limited, (in Ukraine since 1992), www.bakermckenzie.com, kyiv_info@bakermckenzie.com, Renaissance Business Center, 24 Vorovskoho Str., Kyiv 01054, Ukraine (44) 590-01-01 (44) 590-01-10
Serhiy Chorny, Serhiy Piontkovsky
0/100
Chicago, USA
99
Legal services
Over 7
WND
Agriculture, telecommunications, pharmaceuticals, banking, mining, etc.
Multinational corporations, banks & organizations, leading Ukrainian companies
WND
WND
WND
WND
Agriculture, automotive, banking and finance, insurance, chemicals, pharmaceuticals, renewable energy, real estate, retail
Foreign investors and large Ukrainian groups from numerous sectors of industry, as well as banks, financial institutions and insurers
B.C.Toms & Co, (in Ukraine since 1991), www.bctoms.net, kyiv@bctoms.net, 18/1 Prorizna Str., off.#1, Kyiv 01034, Ukraine (44) 490-60-00 (44) 278-65-08
Bate C. Toms
WND
Kyiv, Ukraine London, UK
35
Agriculture, banking & finance, oil & gas, electricity, acquisitions, real estate & land law, litigation & arbitration, tax & customs
WND
WND
BDO LLC, (in Ukraine since 1993), www.bdo.com.ua, BDO@bdo.kiev.ua, 201-203 Kharkivske Road, 10th floor, Kyiv 02121, Ukraine (44) 393-26-87 (44) 393-26-88
Sergey Balchenko
WND
Kyiv, Ukraine
WND
Audit services, advisory services, valuation practice, tax practice, accounting outsourcing, legal practice
WND
WND
BEITEN BURKHARDT, (in Ukraine since 2004), www.beitenburkhardt.com, bblaw-kiew@bblaw.com, 38 Turhenevska Str., Kyiv 01054, Ukraine (44) 494-04-00 (44) 494-04-01
Dr. Julian Ries, Felix Rackwitz
0/100
Munich, Germany
WND
Tax and legal services
WND
WND
Chadbourne & Parke LLP, (in Ukraine since 1993), www.chadbourne.com, Kyiv@chadbourne.com, 25B Sahaydachnoho Str., 3rd floor, Kyiv 04070, Ukraine (44) 461-75-75 (44) 461-75-76
Jaroslawa Johnson
0/100
New York, USA
38
Legal Services: corporate/M&A, banking & finance, capital markets, dispute resolution, real estate, tax, energy, antitrust
WND
Represented Gruma International Foods S.L. in the acquisition of two agricultural companies in Ukraine
Banking & finance, pharmaceutics, agriculture, food and beverages, aviation, real estate, oil and gas, telecommunications
EBRD, IFC, OPIC, Bank of Cyprus, Interpipe, Khortytsia, Turkcell, ExIm Bank of the US, Wizz Air Ukraine
Agriculture, FMCG, oil and gas, retail, alcoholic beverage, financial services, pharmaceutics
Vitmark, Sberbank, Valars Hearst Corporation
Clifford Chance, (in Ukraine since 2008), www.cliffordchance.com, ukraine@cliffordchance.com, 75 Zhylyanska Str., Kyiv 01032, Ukraine (44) 390-58-85 (44) 390-58-86
Jared Grubb
0/100
London, UK
29
Legal specialisation in corporate and M&A, banking and finance, debt restructuring, capital markets
10
WND
Business Focus is the Kyiv Post’s spotlight on companies, industries and services in Ukraine. The stories on the news pages of Business Focus are written by Kyiv Post editorial staff members, but the lists of companies are paid advertisements. Listing is arranged in alphabetical order. For more information about publishing your company's information in our list, please contact the advertising department at advertising@kyivpost.com. Key to abbreviations: WND – would not disclose.
www.kyivpost.com
Business Focus 15
May 13, 2011
MERGERS&ACQUISITIONS
Advertisement
Listing is arranged in alphabetical order TEL./FAX
TOP EXECUTIVE
OWNERSHIP, UKRAINIAN/ FOREIGN (%)
HEADQUARTERS
# OF FULL-TIME EMPLOYEES IN UKRAINE
MAIN SPECIALIZATION AND SERVICES
# OF M&A IN 2010
BIGGEST M&A DEAL IN 2010
INDUSTRIES
MAJOR CLIENTS
CMS Cameron McKenna LLC, (in Ukraine since 2007), www.cms-cmck.com, kyivoffice@cms-cmck.com, 38 Volodymyrska Str., 6th floor, Kyiv 01034, Ukraine (44) 391-33-77 (44) 391-33-88
Adam Mycyk
0/100
UK
50
Corporate and M&A, commercial, energy and projects, real estate, banking and finance, dispute resolution, etc.
5
NestlĂŠ S.A. (Switzerland) on a transaction to acquire Technocom LLC, the largest producer of dehydrated culinary in Ukraine under the Mivina brand
Consumer products, energy and projects, real estate, banking and finance. TMT, etc.
WND
All industries
Inditex, Saint Gobain, Slavutich, ITE, Leroy Merlin, Regus Group, Antonio Merloni, InterContinental Hotel Group, etc.
DLA Piper Ukraine, (in Ukraine since 2005 ), www.dlapiper.com, Ukraine@dlapiper.com, 77A Chervonoarmiyska Str., Kyiv 03150, Ukraine (44) 490-95-75 (44) 490-95-77
Margarita Karpenko
0/100
London, UK
64
Legal support of M&A transactions (i.e. structuring, legal dd, transaction documents, transaction closing support, etc.)
10
Advising the selling shareholders of Concern Stirol in sale of almost 90% of their shares to an investor
Dovhan & Partners Law, (in Ukraine since 2009), www.dovhanandpartners.com, office@dovhanandpartners.com, 21L Yaroslaviv Val Str., Kyiv 01034, Ukraine (44) 222-89-39
Dr. Viktor Dovhan
100/0
Kyiv, Ukraine
10
Corporate, M&A, banking and finance, real estate, litigation
2
WND
Banking, medical services, production, oil & gas
Standart NV, Tehnoplaza Ukraine, Med Lab Technology, Streamline Shipping,, Coca Cola Ukraine Limited
EnGarde Attorneys at Law, (in Ukraine since 2007), www.engarde-attorneys.com, office@engarde-attorneys.com, 7 Vorovskogo Str., Kyiv 04053, Ukraine (44) 498-73-80 (44) 498-73-85
Irina Nazarova
100/0
Kyiv, Ukraine
23
Legal services in corporate law, M&A and restructuring, as well as litigation and intl. arbitration
WND
Acquisition of REGAL PETROLEUM PLC by ENERGEES MANAGEMENT LIMITED, March 2011 (GBP 65,8 mln.)
Trade, heavy industry, oil and gas, hightech, real estate
WND
Banking and financial, agricultural, retail, FMCG, mining & metals, energy, telecom, oil&gas, transportation
WND
All industries and all types of business
WND
Ernst & Young, (in Ukraine since 1991), www.ey.com/ua, kyiv@ua.ey.com, 19A Khreschatyk Str., Kyiv 01001, Ukraine Kyiv: (44) 490-30-00 (44) 490-30-30 Donetsk: (62) 340-47-70
Alexei Kredisov, Country Managing Partner, Dmitriy Litvak, Partner, Head of Corporate Finance and M&A
WND
London, UK
517
Corporate finance, M&A, DD, transaction support, restructuring, assets/business valuation, financial modeling
WND
WND
Gide Loyrette Nouel, (in Ukraine since 2006), www.gide.com, gln.kyiv@gide.com, 56A Bohdana Khmelnytskoho Str., Kyiv 01030, Ukraine (44) 206-09-80 (44) 206-09-81
Karl Hepp de Sevelinges
0/100
Paris, France
35
Legal due diligence, structuring of deals, legal support of acquisition, drafting related documents
WND
WND
Golovan and Partners Law Firm, (in Ukraine since 1996), www.golovan.com.ua, Office.Donetsk@golovan.com.ua, 21A Illicha Str., Donetsk 83003; office.kyiv@golovan.com.ua, 3 Sholudenka Str., off.#306, building 1, Cubic, Kyiv 04116, Ukraine (62) 335-97-70 (62) 335-96-32 (62) 335-98-30 (44) 230-47-71 (44) 230-47-81
Dr. Igor V. Golovan, Managing Partner
100/0
Donetsk, Ukraine
29
Legal services
WND
WND
Energy, oil and gas, coal, chemical, metallurgy, machinery, telecommunication
WND
Integrites international law firm, (in Ukraine since 2005), www.integrites.com, info@integrites.com, 15B Borisoglebska Str., Kyiv 04070, Ukraine (44) 391-38-53 (44) 391-38-54
Vyacheslav Korchev
100/0
Kyiv, Ukraine
76
Trade finance, banking & finance, M&A, dispute resolution, corporate finance, tax
6
WND
Consumer goods industry, oil & gas, IT
EBRD, OTP Bank, MHP SA, Bank of Cyprus, Rabobank Int., Hochland, Euler Hermes, NEFCO
Jurimex Law Company, (in Ukraine since 2003), www.jurimex.com.ua, www. jurblog.com.ua, reception@jurimex.ua, 9/2 Velyka Vasilkivska Str., off.#67, Kyiv 01004, Ukraine (44) 287-76-76 (44) 287-48-38
Danil Getmantsev
100/0
Kyiv, Ukraine
55
Litigation and arbitration, tax law, corporate law and securities, intellectual property, real estate and construction
3
WND
Real estate, financial services, credit, insurance and investment activity, agriculture, banking activity
MSL, International Telecommunication Company, Cambio Bank, Europa Plus Kiev, Electrotech, Travel Professional Group
Agribusiness, infrastructure, real estate, fin. sector, technology, consumer markets, oil & gas, transport
Citibank, Ukrsotsbank, Pravex-Bank, Nestle, Zaporizhstal, Energoatom, SCM
WND
English
Telecommunications, oil, metallurgical, financial services
UKRENERGO, Louis Dreyfus, Azovmash, Kyivstar, Puma, Bank of Cyprus, Aeroc, Maspex, Universal Bank, JTI
Telecommunications, hotels, banks, agribusiness, financial services
Hilton, Moscow Interbank Currency Exchange, UkrSibbank, Dow AgroSciences
KPMG-Ukraine Ltd., (in Ukraine since 1992), www.kpmg.ua, info@kpmg.ua, 11 Mykhalyivska Str., Kyiv 01001, Ukraine (44) 490-55-07 (44) 490-55-08
Floris Schuring, Managing Partner
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KPMG is a global network presented in 146 countries worldwide
300
Audit, tax & legal, advisory (transactions & restructuring, risk & compliance, performance & technology)
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Kreston GCG, (in Ukraine since 2001), www.kreston-gcg.com, office@kreston-gcg.com, 10 Grushevskogo Str., Kyiv 01001, Ukraine Kyiv: (44) 498-29-12 (44) 498-29-13 Donetsk: (62) 334-99-37 (62) 334-99-38
Sergey Atamas, Managing Partner
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Chelmsford, UK
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M&A advisory, vendor due diligence, audit, IFRS, tax services, due diligence, valuation, IPO, PP, business advisory
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Lavrynovych & Partners law firm, (in Ukraine since 2004), www.Lp.ua, office@Lp.ua, 14/24 Klovsky uzviz, off.#101, Kyiv 01021, Ukraine (44) 494-27-27 (44) 492-99-97
Maksym Lavrynovych, Managing partner
100/0
Kyiv, Ukraine
53
Legal consulting, representation before anti-trust office
15
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Magisters, (in Ukraine since 1997), www.magisters.com, kyiv@magisters.com, 38 Volodymyrska Str., Kyiv 01034, Ukraine (44) 492-82-82 (44) 492-82-72
Andrew Mac
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Kyiv, Ukraine
75
Legal consulting in B&F, competition, IP, international arbitration, litigation, M&A and corporate, real estate & construction, tax
4 completed, 1 withdrawn
Altimo (Alfa Group), USD 23.8 billion
16 Business Focus Advertisement
www.kyivpost.com
May 13, 2011
MERGERS&ACQUISITIONS Listing is arranged in alphabetical order
TEL./FAX
TOP EXECUTIVE
OWNERSHIP, UKRAINIAN/ FOREIGN (%)
HEADQUARTERS
# OF FULL-TIME EMPLOYEES IN UKRAINE
MAIN SPECIALIZATION AND SERVICES
# OF M&A IN 2010
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INDUSTRIES
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Agriculture, retail, food industry
VS Energy Int., Concern Galnaftogaz, Mriya Agro Holding, Sintal Agriculture etc.
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M&A, Tax, Corporate, IP, IT, Commercial Law, PPP, Litigation/Arbitration
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Production and sale of industrial equipment, pharmaceuticals
Provided on the web-site
Nexia DK Auditors & Consultants, (in Ukraine since 2001), www.dk.ua, info@dk.ua, 32A Yefremova Str., 3rd floor, Lviv 79013, Ukraine (32) 298-85-40 (44) 235-50-25
Roman Bilyk, Mykola Romanyuk
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Lviv, Ukraine
100
Audit, accounting, consulting, tax and legal advisory, IT services, valuation, business education
6
Noerr TOV, (in Ukraine since 2007), www.noerr.com, info@noerr.com, 7/11 Khreschatyk Str., Kyiv 01001, Ukraine (44) 495-30-80 (44) 495-30-90
Dr. Mansur Pour Rafsendjani
0/100
Munich, Germany
30
Legal and tax advisory, M&A, transaction support, permit and license issues
5
OL&RUST, (in Ukraine since 2000), www.barrister.com.ua, office@barrister.com.ua, 39-41 Khoriva Str., Kyiv 04071, Ukraine (44) 545- 67-77 (44) 545- 65-75
Roman Khrustenko
100\0
Kyiv, Ukraine
14
M&A, due diligence, business advisory, judical practice, licensing, antimonopoly, intellectual property
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PETERKA & PARTNERS, (in Ukraine since 2006), www.peterkapartners.com, office@peterkapartners.com, 17/52 Bohdana Khmelnytskoho Str., Kyiv 01030, Ukraine (44) 581-11-20 (44) 581-11-21
Alexander Poels, LL.M.
0/100
Prague, Czech Republic
15
Legal and tax: investment, commercial, M&A, competition, real estate, financial, PPP, litigation, EU law, etc.
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Automotive, energy and utilities, food, banking, pharmaceutics, construction, transportation, IT, TMT, retail
PSA Peugeot Citroen, Veolia Voda, Bel Shostka, KRKA, Skoda Transportation, KBC Group, Vinci, Novo Nordisk, Konica Minolta
Agriculture, finance, consumer & retail, oil & gas, metals & mining, real estate, engineering, chemicals, media, telecom
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Automobile, chemical, food, engineering, real estate, agriculture, machinery construction, publishing
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Renaissance Capital, (in Ukraine since 2004), www.rencap.com.ua, ukraine@rencap.com, 2 Mechnikova Str., 14th floor, Kyiv 01601, Ukraine (044) 492-73-83 (044) 493-91-02
Roman Nasirov, Igor Bilous
0/100
Kyiv, Ukraine
50
Financial and strategic advisory, M&A, structuring, equity and debt issuance and trading, research
5
The sale of Ukrainian operations of Renaissance Credit to SCM Finance
ROEDL & PARTNER, (in Ukraine since 2003), www.roedl.pro, info_ua@roedl.pro, 40 Hlybochytska Str., Kyiv 04050, Ukraine (44) 586-23-03 (44) 586-23-04
Klaus Kessler
0/100
Nuremberg, Germany
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Accounting outsourcing, audit, tax, legal advice, litigation, M&A structuring, tax planning, AMCprocedures
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Salkom Law Firm, (in Ukraine since 1990), www.salkom.ua, salkom@salkom.kiev.ua, 12 Khreschatyk Str., Kyiv 01001, Ukraine (44) 537-39-40 (44) 537-39-55
Evgen Kubko
100/0
Kyiv, Ukraine
59
Antitrust and competition, banking & finance, corporate/ M&A, energy, IP, labour & employment, litigation, real estate, securities, tax
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Salans, international law firm, (in Ukraine since 1992), www.salans.com, kyiv@salans.com, 49A Volodymyrska Str., Kyiv 01034, Ukraine (44) 494-47-74 (44) 494-19-91
Oleg Batyuk, Managing Partner, Kyiv
0/100
International law firm, 22 offices worldwide/1 office in Ukraine
70
Corporate/M&A, banking and finance, real estate, tax, employment, competition, energy/natural resources, dispute resolution, IP
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Schoenherr Ukraine LLC, (in Ukraine since 2006), www.schoenherr.eu, office.ukraine@schoenherr.eu, 44 Shota Rustaveli Str., Kyiv 01033, Ukraine (44) 220-10-46 (44) 220-10-45
Alexander Popp, Mariya Sukhan
0/100
Vienna, Austria
17
Corporate/M&A, banking & capital markets, employment, insolvency IP, oil & gas, real estate & construction, regulatory, tax
10
Acquisition of Porche by Volkswagen EUR 3.55 billion
Automotive, insurance, banking, real estate & construction, food, oil & gas,media
Volkswagen, Thomson Reuters, Europaeische Reiseversicherung, Volksbanken, Generali Holding AG, LLK International
Squire, Sanders & Dempsey L.L.P., (in Ukraine since 1992), www.ssd.com, Peter.Teluk@ssd.com, Leonardo Business Center, 19-21 B. Khmelnytskoho Str., Kyiv 01030, Ukraine (44) 220-14-00 (44) 220-14-11
Peter Teluk, Managing Partner
0/100
Cleveland, USA
20
Legal services
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Energy, telecom, oil & gas, mining, banking, chemical, technology & software, agribusiness, real estate and others
3M, ArcelorMittal, BP, Bayer Corporation, Bunge, Columbia Capital, DuPont, Eaton Corporation, ING Group N.V., KazmunaiGaz, Tesco PLC, The Boeing Company
Syutkin and Partners Firm of attorneys, (in Ukraine since 2006), www.lawyer.ua, www.syutkin-partners.com, office@syutkin-partners.com, 26/17 Lyuteranskaya Str., off.#30, Kyiv 01024, Ukraine (44) 253-32-21 (44) 353-00-19
Mykola Syutkin
100/0
Kyiv, Ukraine
7
M&A, corporate law, commercial law, due diligence, legal disputes, bankruptcy, tax, real estate land law, environmental law, audit
10
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Production, agriculture
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TMF Ukraine, (in Ukraine since 2006), www.tmf-group.com, Ukraine@tmf-group.com, 23A Yaroslaviv Val Str., Kyiv 01034, Ukraine (44) 428-94-44 (44) 428-94-49
Pavlo Boyko, General Director
0/100
Amsterdam, the Netherlands
38
Bookkeeping and reporting services, human resource and payroll services, corporate secretarial services
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UKRAINE CONSULTING, (in Ukraine since 2006), www.ukraine-consulting.eu, info@ukraine-consulting.eu, Horizon Towers, 42-44 Shovkovychna Str., Kyiv 01601, Ukraine (44) 490-55-28 (44) 490-55-29
Sven Henniger
0/100
Hamburg, Germany
20
Accounting, outsourcing, tax consulting, IFRS transformation, due diligence, business set-up
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All sectors
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VASIL KISIL & PARTNERS Law Firm, (in Ukraine since 1992), www.kisilandpartners.com, vkp@vkp.kiev.ua, Leonardo Business Centre, 17/52A Bohdana Khmelnitskogo Str., Kyiv 01030, Ukraine (44) 581-77-77 (44) 581-77-70
Oleg Makarov (Managing Partner), Denis Lysenko (Partner, Head of Corporate / M&A practice)
100/0
Kyiv, Ukraine
110
Antitrust&competition, banking&finance corp/M&A, energy, IP, dispute resolution, intl trade, labour, PPP, real estate, tax
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Advising Danone group in respect of establishment of a JV with Unimilk
TMF Ukraine LLC Yaroslaviv Val, 23A 2nd oor 01034, Kiev, Ukraine ph. +38 044 428-94-44 e-mail: Ukraine@TMF-Group.com
Nearly all sectors of economy
Alcatel, BASF, Bayer, BNP Paribas, CME, Dell, Du Pont, Eurosport, Fitch, LG, Philips, Siemens, Shell, Volkswagen, etc.
www.kyivpost.com
News 17
May 13, 2011
Officials: Euro 2012 will cost only $14.5 billion
Demjanjuk convicted in Germany, then set free because of age
Æ1 ments, for training grounds and roadwork. According to the revised plan, taxpayers will directly spend only $7.2 billion. Most of the other $7.3 billion will come from “other sources” of financing, including some private investment, officials say. But do the numbers really add up to big taxpayer savings? Roughly 70 percent of the “other sources” comes from public or semipublic companies, namely the state railway company Ukrzaliznytsia at $2.2 billion and the state road company Ukravtodor at $1.1 billion, which is expecting an additional $2.5 billion in government orders. Only about $2 billion or so is expected to come from private investments, mostly in building stadiums and hotels. So, counting the state-run companies, the taxpayer’s bill from the latest action plan is closer to $12 billion. Deputy Prime Minister Borys Kolesnikov, in charge of getting the nation ready for Euro 2012, has disputed previous Kyiv Post stories which estimated that taxpayers could spend up to $20 billion on the soccer championships. Kolesnikov said the $20 billion figure was the previous estimated cost of the overall project, and it has proven to be inaccurately high. Kolesnikov has a good point, and the Kyiv Post incorrectly reported private investments as part of the public cost. The Kyiv Post based its estimates on the government’s April 2010 plan, which was the only public source available. But since then, the Euro 2012 government program has undergone at least 20 revisions, nearly twice a month. “Neither Kolesnikov nor the Kyiv Post is right,” said Ostap Semerak, an opposition lawmaker who sits on the legislature’s budget commission that monitors government spending. “Although taxpayers will, directly or indirectly, pay for the expenses of public companies such as the state-owned railway or roadwork company, you can’t tack on hotels or the building of stadiums.” In addition, many investors listed in the various programs are unnamed and each action plan’s figures for each year from 2008 through 2012 change,
MUNICH, (Reuters) – A German court convicted John Demjanjuk on May 12 for his role in the killing of 27,900 Jews in the Sobibor Nazi death camp during the Holocaust, then set the 91-year-old free because of his age. Holocaust survivors at first welcomed the Munich court’s verdict that Demjanjuk, who was exonerated in another war crimes case in Israel two decades ago, was an accessory to mass murder as a guard at Sobibor camp in Poland during World War Two. But they then expressed dismay at Judge Ralph Alt’s decision to free Demjanjuk despite handing down a five-year sentence. “At the end he threw everyone in the courtroom a curveball and destroyed the hopes of the survivors of Sobibor,” Martin Mendelsohn, counsel for the Nazi-hunting Simon Wiesenthal Center and the lawyer of two co-plaintiffs in the case, told Reuters. Demjanjuk showed no reaction while the judge read out his verdict. It said guards played a key role at extermination camps like Sobibor, where at least 250,000 Jews are thought to have been killed despite only 20 German SS officers being there. “He knew from the beginning exactly what was going on in the camp,” Alt said. But he said that since Demjanjuk had already been imprisoned on remand for two years, more time in jail seemed inappropriate at his age. “The defendant is to be let go,” he said. A court statement cited two other reasons: Demjanjuk had already spent eight years in prison in Israel and the crime was 68 years old. Demjanjuk was initially sentenced to death two decades ago in Israel for being the notorious “Ivan the Terrible” camp guard at Treblinka in Poland. The guilty verdict was overturned on appeal by Israel’s supreme court in 1993 after new evidence emerged pointing to a case of mistaken identity. The Ukraine-born Demjanjuk has been in a German jail since he was
so it is hard to assess the private-public mix in costs. Other government agencies have been disclosing different spending figures as well. Since President Viktor Yanukovych came to power last year, Kolesnikov has speeded up the government’s Euro 2012 preparation. In so doing, he has recaptured the confidence of Europe’s top governing body, which has confirmed that Ukraine is on track to overhaul its creaking Soviet-era infrastructure before the June 8, 2012 kick-off date. Recently, Union of European Football Association’s President Michel Platini admitted that UEFA may have erred in awarding the right to host the event to financially troubled Ukraine. The World Bank says 26 percent of Ukrainians live in poverty. “We gave it to them. It was perhaps an error to have given it to them, but we gave it to them,” Platini told Agence France Presse on March 20. “It’s a great challenge: Ukraine isn’t Germany and is in time of crisis.” Meanwhile, Euro 2012 co-host Poland’s estimated costs are $30.4 billion, 60 percent of which, or $18 billion, is coming from its own pocket and private investors. The European Union is covering the rest, according to Poland’s Euro 2012 National Agency, an option not available for non-EU member Ukraine. This is the first time the Euro soccer championship is taking place in Eastern Europe, and the largest event for post-Soviet Ukraine, with 700,000 foreign visitors expected. Poland’s Euro 2012 agency said it is difficult to compare its spending to Ukraine’s. “Our financial structures are different,” said Mikolaj Piotrowski, the agency’s spokesperson. “We share information on common factors. We don’t have their figures and our costs are not shared.” UEFA also wouldn’t talk about Ukraine’s spending. Other nations have, however, hosted other big sporting events for much less than what Ukraine is expected to spend. South Africa, for instance, spent an estimated $3.5 billion to host the world’s largest soccer event in the 2010
World Cup, according to the South African Public Service Commission, an independent body that investigates, monitors and evaluates public administration. The United Kingdom’s BBC reported that Greece had spent $15 billion to host the 2004 Summer Olympics that required 22 or so venues, far less than Ukraine’s four stadiums. UEFA has already admitted that it is only concerned with the final result – stadiums, hotels, airports and transportation links – not how money is spent. “The important thing is that things are finished on time. We have no real view how things are actually done,” Martin Kellen, UEFA’s chief operating officer told the Kyiv Post. Years ago, the government forecasted that 80 percent of the overall Euro 2012 cost would come from private investors. The reverse is true: It appears the public will foot 80 percent of the bill. “They were dreaming. Their expectations were overly optimistic,” said Dirck Smits van Oyen, general manager of the Ukraine-Poland bid for Euro 2012. Kolesnikov and the Euro 2012 national agency supervised by him have repeatedly said the previous government of Prime Minister Yulia Tymoshenko, in power until March 2010, fell behind on projects. Tymoshenko’s press service has denied such accusations saying that despite the financial crisis her government managed to preserve Euro 2012 in all four Ukrainian host cities. Tymoshenko questioned the transparency of government spending. “Many projects today are artificially high,” Tymoshenko’s press service said. Kolesnikov insists drastic steps were needed, including state-guaranteed loans for public companies and the awarding of single-bid government contracts. “There was no other option,” Kolesnikov told the Kyiv Post. “Otherwise we would have lost the right to host Euro 2012.” The latest government plan is available in the Ukrainian language at: http://www.ukurier.gov.ua/index. php?articl=1&id=19416 Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost. com
John Demjanjuk
extradited from the United States two years ago and his lawyers had sought his release on age and health grounds. He attended the 18-month court proceedings in Munich -- the birthplace of Adolf Hitler’s Nazi movement -- in a wheelchair, and sometimes lying down. He denied the charges but otherwise did not speak at his trial.
Justice, not revenge Stephan J. Kramer, secretary general of the Central Council of Jews in Germany, told Reuters that the verdict was “not revenge but the execution of justice, even 65 years later”. Victims’ groups said the main point for them was the guilty verdict and they refrained from criticising the decision to set Demjanjuk free. “For us the important thing is that he got convicted,” World Jewish Congress spokesman Michael Thaidigsmann said. “It’s not up to an organisation like us to say whether he should be in jail or not.” “It’s inappropriate that he be freed, but I’m not going to question the German judicial system,” said Elan Steinberg of the American Gathering of Holocaust Survivors. Demjanjuk's son, John Jr., said in an e-mail before the verdict that his father was a victim of the Nazis and of post-war Germany.
18 News
www.kyivpost.com
May 13, 2011
Tobacco companies skirt ad bans with sneaky marketing tactics Æ1 Kiss FM and MTV Ukraine listed as partners. Both companies didn't respond to Kyiv Post inquiries. But what the majority of that evening’s 20-somethings didn’t know was that Urban Wave is JTI’s pseudo-brand. Using social media like Facebook and involving international artists and DJs, Camel organizes musical events to draw public interest towards its brand indirectly in order to engage with existing or future smokers. “The sole purpose of Urban Wave is to distribute cigarettes to their demographic inside the venue of these parties,â€? said Andriy Skipalsky, chairman of LIFE, a coalition of anti-tobacco non-profit organizations. Skipalsky said this concept of “dark marketing,â€? although legal, is how tobacco companies increasingly engage with target market groups, namely youth. “Its covert because it’s below the radar and once consumers are engaged with a pseudo-brand, the true brand – Camel – can engage with them,â€? he said. “It appears like any other form of human communication but it’s somewhat subversive because it intends to promote the cigarette brand’s interests.â€? The activist said these events then capitalize on package imagery and design elements in order to build empathy with the target group. “If you buy a package of cigarettes you are lured by questionable benefits -- painting a life-size model of a Camel, or accessing a bar lounge -- thus gettting to interact with the brandâ€?, said Skipalsky.
Tobacco companies have a history of targeting youth in their marketing practices in order to replace older smokers who either quit or die from smoking-related diseases. In Ukraine, 100,000 people die annually due to smoking while 29 percent of adults currently smoke tobacco, according to the 2010 Global Adult Tobacco Survey. A 1975 RJ Reynolds internal company document cited the importance of getting young people hooked on cigarettes. “To ensure increased and longer-term growth for Camel Filter, the brand must increase its share penetration among the 14-24 age group which have a new set of more liberal values and which represent tomorrow’s cigarette business,� it reads. Another RJ Reynolds internal memo circa 1984 states: “Younger adults are the only source of replacement smokers. Only 5 percent of smokers start after age 24.� Numerous messages left with JTI’s spokesperson in Ukraine never were returned. Increasingly, tobacco marketers are using covert marketing concepts since they are staring imminent regulation in the face. Ukraine has already banned tobacco advertising in television, radio and the press as well as “external advertisement� such as billboards. In March, Ukraine became the 40th country in the world to adopt pictorial warnings on tobacco product packaging, which will come into force on Sept. 30, 2012.
A Camel girl flashes a special card at a dance party on March 12 in Kyiv’s International Exhibition Center that allows cigarette buyers special access to a lounging area. (Courtesy photo)
Despite these positive government moves, 45 percent of Ukrainians have noticed cigarette marketing in advertisements, sponsorship, or promotions, according to the 2010 Global Adult Tobacco Survey. Anti-tobacco activists and health officials say more needs to be done to curtail young people from lighting up, make cigarettes less affordable for older smokers and greatly limit tobacco companies from developing relationships with existing and potential smokers. “There are still other outlets for companies to engage with consumers,� said Kostiantyn Krasovsky, head of the tobacco unit for the Ukrainian Institute
of Strategic Research under the Health Ministry. Krasovsky said tobacco companies employ people to stand near tobacco kiosks, or points of sale, where they promote cigarettes, gather personal information to build databases from which direct mailing and other marketing techniques are used to reach out to consumers. But a current bill in parliament could end all this. A bill is registered that would ban all types of tobacco advertisements, including event sponsorships. More than 300 of the legislature’s 450 lawmakers voted for the bill in its first reading in 2010.
However, 71 proposed amendments to the bill have been made since, which health officials and activists said weaken the bill. Lawmaker Olena Kondratiuk, who heads the bill’s parliamentary working group, said that despite the many changes proposed, the bill has a “high chance of making it through a second reading [thus becoming a law]� before parliament adjourns for the summer in July. She said that although she’s for banning sponsorships, the working group has had difficulty reaching consensus on defining online advertising as well as other details. However, Kondratiuk said “overall the draft law still trumps public health over vested interests.� The complete advertising ban is supposed to bring Ukraine in line with the World Health Organization’s Framework Convention on Tobacco Control, which it signed in 2006, said Natalia Korol, a national tobacco control officer at the WHO office in Ukraine. The framework foresees nations implementing price and tax measures to reduce the demand for tobacco while ensuring protection from exposure to tobacco smoke, regulation of tobacco product disclosures and banning tobacco advertising, promotion and sponsorship, among other measures. Meanwhile, tobacco companies aren’t stopping. JTI’s Urban Wave held another dance party in Kyiv on May 8. Kyiv Post staff writer Mark Rachkevych can be reached at rachkevych@kyivpost. com.
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Business/Opinion 19
May 13, 2011
Zahoor: Investments in Kyiv Post make its brand of journalism available to everyone Æ4
Taking aim at a dictator Activists of the women’s movement Femen sling tomatoes at Belarusian dictator Alexander Lukashenko during a protest on Independence Square on May 11. The poster reads ‘Put Lukashenko on the Rack!’. Femen is an organization of the young women based in Kyiv oriented toward female students of the capital. Their movement conducts a national campaign against sex tourism and women trafficking in Ukraine. (Yaroslav Debelyi)
Khlib Investbud’s top executive defends company amid criticism Æ7 DPZKU is lobbying for adoption of legislation that will allow our company to become totally state-owned. KP: So, if legislation is changed, the state will buy out the majority stake in Khlib Investbud from private investors? RB: Yes. There are no long-term obligations that bind us to private investors. KP: But who made the decision to choose these private investors and who are the beneficiary owners? RB: In connection with a non-disclosure agreement, I am unable to comment on the identity of these investors. I can say that we are currently still looking for private investors. We are open to talks.
KP: How are you planning to attract new investors, through an IPO? RB: Probably. KP: Can you provide financial results for your company? RB: We will submit the full financial report in the end of the marketing year. As of today, all the quotas that were received by us have been totally used and the grain – all 877,000 tons – has been shipped. We also continue to supply grain under intergovernmental agreements to about six countries. We have fulfilled the first forward contracts for filling the state intervention reserve and will continue with contracts for next year’s harvest. The amount of export, with which we are concluding this marketing year, will be about 1.5 million tons, plus 700,000 tons which
we did last fall in the process of filling up the state intervention reserve. KP: Lawmaker Yuriy Ivaniushchenko, from the propresidential Party of Regions, is one of the few who has come out to defend the role of Khlib Investbud. Why do you think he has spoken so positively about your company? Do you know him? RB: I am not acquainted with him. Let me go further. Of all the domestic politicians and so-called foreign masters such as [Russian Prime Minister Vladimir] Putin, whose names have been mentioned as being linked to us, none have any relation to our company or DPZKU. Kyiv Post staff writer Oksana Grytsenko can be reached at grytsenko@ kyivpost.com
Adelman: Alternative pipelines will put more pressure on Ukraine Æ5 transit supplies into Europe next autumn and winter, as happened in 2009, remains a very remote possibility, the issue continues to raise very thorny issues of sovereignty, nationalism and political power between the two countries.
Tied in with the issue of transit supply, is the future of various alternative pipelines from Russia into central Europe. Up to three potential lines are scheduled to be completed in 2015, including the Gazprom-backed Nord Stream around
Three major natural gas pipelines – Nord Stream, South Stream, Nabucco – will bypass Ukraine’s vast gas transit network.
the Baltic States into Austria and the South Stream pipeline, which would also carry Russian hydrocarbons. A third pipeline, Nabucco, would carry Iraqi, Azerbaijani and Central Asian crudes into Europe and is strongly backed by the European Union and the United States, but, not surprisingly, is highly annoying to the Russians. It is unlikely that all three of the pipelines will be completed, with possibly Nabucco being dropped, but their impact will anyway be negligible on Ukraine’s domestic supply and, if anything, put more pressure on the country’s energy supply, as they will give the Russian side more transit options. What Ukraine really needs, however, is direct access to the Russian market for its own gas supplies, something that the Russian side is so far unwilling to supply. Oliver Adelman is one of the editors on the dealReporter Russia Desk, a Financial Times company that is a subscription news service for hedge funds and proprietary trading desks that covers large-cap equities in Russia, Kazakhstan and Ukraine.
In the last two years, I have invested more than I paid for the newspaper, some $1.4 million. This money went into expanding the staff, improving the newsprint quality and distribution and expanding the page count of the print edition from 16 to 32 on most weeks. We also undertook many new promotional events that cost us money, but were good for the community. I have personally sponsored numerous events, such as cricket tournaments, Pakistan Day and other gatherings that were close to my heart. For the larger Kyiv community, the Kyiv Post regularly donates space in print and on the website to help raise money for victims of natural disasters, such as the earthquakes in Pakistan and Japan. We also publish a Community Bulletin Board as a way for members of the community to become acquainted with each other and help others in need. Moreover, we have strengthened our Kyiv Post traditions – such as our annual Best of Kyiv awards and our employment fairs. We have, as well, started new projects – such as last year’s Most Influential Expats awards. Now we are gearing up for the Euro 2012 football championships that Ukraine will co-host. These activities will continue because they strengthen the bonds that unite all of us. But my biggest financial investment to date has been in the Ukrainian/
Russian-language version of the Kyiv Post website. We expanded because we want a mass audience, not just the small audience of English-language readers. We believe that our brand of journalism, with an international team that includes some of the best in the business, will prove popular with Ukrainians. To become a top-rated online source for news in Russian and Ukrainian is no easy task. We are happy with aspects of our progress, and have room to improve in others. I can see now that this will take more time than we expected to build an audience on what we call our UA website. But I still believe it will happen, not automatically, but if everyone at the newspaper does their jobs properly. Mine is to provide investment and direction. Editorial’s job is to make sure the journalism is fair and topnotch. Advertising’s role is to sell, sell, sell … and so on. I don’t know what the future will hold. But whether I keep or ultimately sell the Kyiv Post, rest assured that it will remain in good hands with an owner who takes very seriously our motto of “Independence. Community. Trust.” When I bought the Kyiv Post, I said its best days are ahead. Despite our recent setbacks, I still believe that and I hope that you do too. Mohammad Zahoor is the owner of the Kyiv Post, part of his ISTIL Group of companies.
Lifestyle
Follow more than 40 countries in this annual pop singing craze in Dusseldorf on May 14 at 10 p.m. on First National TV Channel and find out more about Ukraine’s candidate Æ23
May 13, 2011
Play | Food | Entertainment | Sports | Culture | Music | Movies | Art | Community Events
War hero, watchfixer, Hyundai driver
Mykhailo Blyumkov has many medals and scars, but doesn’t like talking about them because “war is never glorious.” (Joseph Sywenkyj)
BY OKSANA FARYNA FARYNA@KYIVPOST.COM
Huddled in a tiny workshop amid the modern restaurants and fancy shops of Kyiv’s Podil district, Mykhailo Blyumkov peers intently at a watch he is carefully fixing with a small metal tool grasped in his wizened hands. Hanging behind him in the cramped space is a worn brown jacket covered with medals, a reminder of his part in World War II that also left him with shrapnel in one cheek and one permanently weak leg. By any account, Blyumkov’s has been an extraordinary life. In his 90 years, he has seen the Soviet Union rise to fight off the Nazi threat in the early 1940s, then collapse in 1991 after Ukraine declared independence. But what singles him out even
The watch repairman‘s workshop is the size of a closet, reflecting Mykhailo Blyumkov’s philosophy in life: You don’t need many things to enjoy life in full. (Joseph Sywenkyj)
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more is that, while other veterans eke out livings on a meager pension recalling better times, he retains a zest for life, an eye for detail and a hand for work. Blyumkov has been mending clocks and watches in Kyiv for more than 60 years. He became a watch-fixer after returning from the war, working in the cramped workshop then owned by the Remtochmekhanika plant. After the Soviet collapse, Blyumkov, already in his 70s, bought the shop and became a private entrepreneur. Now, every day he drives a Hyundai to work from Holosiyivskiy district in the outskirts to the center of Kyiv. Almost 70 years ago, Blyumkov was a fresh volunteer who fought from Ordzhonikidze in Northern Caucasus to the Black Sea port of Novorossiysk in Crimea. He Æ28
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Food Critic BY NATALIA A. FEDUSCHAK CHAK H OM FEDUSCHAK@KYIVPOST.COM
Podil’s piano i cafe worth trip for music, food Podil’s Piano Café Music Bar is a non-smoker’s dream. Not only is the food deliciously tasty in this cozy eatery, but it is one of the few places in Ukraine, it seems, that one can spend literally hours and breathe free. As a non-smoker who has struggled to find places where one can enjoy dinner not engulfed into other people’s cigarette smoke, that is a lot to write home about. Piano Café Music Bar is appropriately named. Not quite a restaurant, it is more of an intimate bistro, where small lamps cast light on pleasant white table cloths, where piano provides a soothing backdrop (although it might be too loud in the smoking section) and one can whittle away the hours, seeped in conversation. The cuisine is international: pasta, meat dishes, salads, and an entire Ukrainian menu, beginning with borscht and up. My dinner companion was a long-time friend who was in town. We both had the Caesar Salad (Hr 58), which could have been a meal in itself. Filled with chicken and bacon bits, it was a weighty portion, topped by a generous amount of parmesan cheese, a spicy sauce and cayenne pepper. I have never been a big fan of cayenne. But in this case, it added an unexpected punch to the salad. My company had bass with sauce (Hr 68) and rice with vegetables on the side for Hr 39. He said the bass was “delicious.” I’ve never been a fish lover – four decades later, I’m still traumatized by the fact that the one fish I ever caught, my father refused to throw back into the river and cooked it up in a frying pan instead. I had the spaghetti with mushrooms and broccoli in a white cream sauce (Hr 58). The waiter was honest; he said the café didn’t make its own noodles. I’ve been to other places both in Ukraine and abroad where staff says the spaghetti is homemade, when clearly it is not. In this case, it made no difference; the dish was very good. The sauce wasn’t too heavy and boasted just the right amount of vegetables. If there was one criticism, it was that the waiter didn’t bring parmesan with the dish. For me, frankly it didn’t matter. The Caesar salad had so much of it, I just sprinkled the spaghetti from that dish. We polished off the meal with two – yes, two – bottles of champagne. The Krym Brut ran for Hr 120 and arrived cold, as should be. The second bottle, which I admit I urged, was Novy Svit, Extra Brut for Hr 139. The café had run out of the first type and this bottle was a bit warm, but our waiter did Æ28
Photo fest
Musicals, jazz and rock from Bruno Bruno Pelletier is a francophone singer from Canada. He played the role of Pierre Gringoire, a struggling poet who marries Esmeralda by mistake, in legendary musical “Notre-Dame de Paris.” Pelletier was so convincing in the French version, he later got accepted for the same part in the British musical. Then Pelletier moved on to play in “Dracula” After Notre Dame, Pelletier played in “Dracula,” a modern version of an old vampire story. But his talents don’t end with musicals: He also plays rock and jazz. Friday, May 20, 7 p.m., Palats Ukraina, 103 Velyka Vasylkivska St., 247-2303. Tickets: Hr 100-2200.
Friday - Saturday, May 13-15
They didn’t swap their old film cameras with the advent of a digital revolution and formed a league of their own. Calling themselves after a Soviet-made camera “Lomo Kompakt Automat,” lomographers don’t stage their shoots, don’t wait for the special light and often snap pictures without even looking into a viewfinder. In fact, you may be one of them if you believe that capturing a moment is more important than hunting after an artistic value in one’s image. During their festival, you can climb inside a giant photo camera, get lost in a maze of pictures, check various photo installations and tune in for the party later in the evening. Friday - Saturday, May 13-15, Lavra Gallery, 1 Lavrska St., www.lomofest. org/en, no entrance fee.
Sunday, May 15
(courtesy)
Friday, May 20
Entertainment Guide 21
May 13, 2011
Japanese ballet star Outstanding ballet dancers from Japan, Russia, Berlin and other world operas will grace Kyiv in the course of just one night. In the first act, Japanese prima-ballerina Sinobu Takita will perform in a ballet “Lady and the Hooligan” composed by Dmitry Shostakovich. In the second act, she will be joined by other prominent ballet dancers from Russian Bolshoi and Mariinski theaters, Tokio Ballet, Berlin Opera, among others in episodes from “Swan Lake,” “Scheherazade” and “Don Quixote” to name a few. Sponsors pledged to donate all proceeds from the concert to help the victims of the earthquake in Japan. Sunday, May 15, 7 p.m., National Opera, 50 Volodymyrska St., 279-1169, www. opera.com.ua. Tickets: Hr 50-1200.
Saturday, May 21
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Best classical picks • Friday, May 13: Vivaldi music at 7:30 p.m., the House of Organ Music, 77 Velyka Vasylkivska St., 528-3186, www. organhall.kiev.ua. Tickets: Hr 20-50.
• Tuesday, May 17: Georgian jazz singer Nino Katamadze and band Insight at 9 p.m., Arena Concert Plaza, 2A Baseina St. Tickets: Hr 250-1500.
• Saturday, Sunday, May 14-15: The First Children’s Jazz Festival at 4 p.m., Mariyinsky park. Free admission.
• Friday, May 20: accordion music by Bayan-Mix duo at 7 p.m., Budynok Ofitseriv, 30/1 Hrushevskoho St. Tickets: Hr 120-370.
• Monday, May 16: chamber music with pieces by Prokofiev, Mussorgsky, Tchaikovsky and Shostakovich at 7 p.m., Budynok aktora, 7 Yaroslaviv Val St., 235-2081, www.actorhall. com.ua. Free admission.
• Wednesday, May 18: Kyiv chamber ensemble “Kyiv Soloists” will play pieces by Hendel, Shostakovich, Britten and others at 7 p.m., National philharmonic, 2 Volodymyrsky Uzviz, 278-1697, www.filarmonia.com.ua. Tickets: Hr 30-80.
Man with a lady in red Singer Chris de Burgh, 62, is a hopeless romantic and proud of it. In the ‘70s, he used to sweep women off their feet with “Lady in Red” and “Into the Night.” Even now, his songs are regularly included in the albums of best love songs. “Lady in Red” was actually inspired by the memory of de Burgh’s wife when he first met her. In the same album, there is another song, “For Rosanna,” which was dedicated to the birth of his daughter. Later, Rossana would take the beauty of that song on stage and win Miss World pageant in 2003. Saturday, May 21, 7 p.m., Palats Ukraina, 103 Velyka Vasylkivska St., 2472303. Tickets: Hr 150-2000.
Compiled by Nataliya Horban and Alexandra Romanovskaya
22 Entertainment Guide
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May 13, 2011
Movies
Live Music
Chilibombers play rockabilly in Docker’s ABC. (Courtesy)
Mafia and romance in the Hungarian thriller ‘As You Are.’ (www.iffbratislava.sk)
AS YOU ARE Language: Hungarian with English subtitles Drama/Thriller. Hungary (2010) Directed by Karoly Makk Starring Gyorgy Cserhalmi, Eszter NagyKalozy and Zsolt Trill A new mayor of a small town meets a strange beautiful woman. He doubts if she’s being sincere at all, but has no time to invest into their relationship. An honest governor, he soon finds out that the town belongs to the mafia and starts the fight against corruption. Just as he seems to be one step away from winning the battle, a strange woman appears once again and destroys his life... A tense thriller from Karoly Makk, one of the most well-known Hungarian filmmakers, who received the Prize of the Cannes festival twice. FLUKE (MAZLI) Language: Hungarian with English subtitles Drama/Thriller. USA (2008) Directed by Tamas Kemenyffy Starring Andor Lukats, Istvan Gyuricza, Miklos Kapacsy Sometimes a simple crime can be a true miracle. A failed suicide attempt of one of the villagers helps other people find
Compiled by Alexey Bondarev
out they have access to unlimited oil resources in their backyard. Their lives change radically and forget they were ever poor. All goes well until tax inspectors begin to suspect that there is something wrong going on... This movie tastes almost like it was made by Emir Kusturica as it’s filled with the spirit of his traditional Slavic humor and joy. MILKY WAY Language: Hungarian with English subtitles Ambient Movie. Hungary (2007) Directed by Benedek Fliegauf Starring Barbara Balogh, Sandor Balogh and Peter Balazs Ambient movies are a very specific genre: No plot, no dialogs, only music, sounds and endless scenes that seem out of order and illogical. But when the movie ends, all the bits of this puzzle come together. Milky Way is about life as it is, with great cinematography, editing and emotions that convey more than thoughts. A truly visually stunning piece of art, it is highly recommended to everyone who is tired of typical mainstream movies. THE BEST YEARS OF OUR LIVES Language: English with English subtitles Drama, USA (1946) Directed by William Wyler
MASTERCLASS CINEMA CLUB 34 Mazepy St., 594-1063. The Best Years of our Lives: May 19 at 7 p.m. KYIV CINEMA 19 Chervonoarmiyska (VelykaVasylkivska) St., 234-7381. As You Are: May 13, 17 at 7 p.m. Fluke: May 18 at 7 p.m. Milky Way: May 16 at 7 p.m. Starring Fredric March, Dana Andrews, Myrna Loy Three officers return home from war only to find that everything’s changed including the people they loved. The dream that helped them get through the horrors of war is ruined. And now they are aliens in a strange world and have to deal with problems even more terrible than bullets and bombs. One of them has to fight for the love and respect of his two kids. The other one tries to get his beloved woman back. And the third one, who lost both hands in battle, still believes he can win the heart of the girl he met before the war. This movie is one of Hollywood's “evergreens,” a timeless story of love and devotion that won the hearts of the Oscar Academy members. It received seven Oscars including best movie, best director and best screenplay.
ART CLUB 44 44B Khreshchatyk St., 279-4137, www.club44.com.ua Concerts traditionally start at 8 – 10 p.m. May 13 Alexander Pushnoy & Dzhankoy Brothers May 14 Addis Abeba, Hr 50 May 15 Soiuz 44 Jam Session, free admission May 16 Seni Bekirov Quintet, free admission May 17 Spring Jazz Nights: New Generation, Olena Salova Project, Hr 30 May 18 Shopping Hour, Hr 30 May 19 O.Torvald DOCKER’S ABC 15 Khreshchatyk St., 278-1717, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m. May 13 Chilibombers, Red Rocks, Hr 70 May 14 Fleet, Partizanskie Vytivky, Hr 70 May 15 Yuhym Dym, Chill Out, free admission May 16 Animals Session, free admission May 17 Tres Deseos Latino Party, Hr 20 May 18 Hot Guys, Hr 30 May 19 Rockin’ Wolves, Hr 30 DOCKER PUB 25 Bohatyrska St., metro Heroyiv Dnipra, www.docker.com.ua Concerts traditionally start at 9:30-10 p.m. May 13 Lampasy, Tres Deseos Latino Party, Hr 70 May 14 Easy Dizzy, Karnavalnaya Zhara, Hr 70 May 15 7-B, Foxtrot Music Band May 16 DDT Cover Party: High Score, Bebi X Band, Crazy Train and others, free admission May 17 More Huana, free admission May 18 Tex-Mex Company, free admission May 19 Televisor (Russia), Partizanskie Vytivky and others
BOCHKA PYVNA ON KHMELNYTSKOHO 4B-1 Khmelnytskoho St, metro Teatralna, 390-6106, www.bochka.com.ua Concerts traditionally start at 9-10 p.m. May 13 Chill Out, Carte Blanche May 14 Lucky Band, G Sound May 15 Mafia Party: Hot Guys May 19 Wilde Peoplez PORTER PUB 3 Sichnevogo Povstannya St., 280-1996, www.porter.com.ua Concerts traditionally start at 7:30 p.m. May 13 Yuhym Dym May 14 Shubin Band May 15 Abbey Road May 18 Ivan Bliuz May 19 Max Vatutin JAZZ DO IT 76A Velyka Vasylkivska St., 289-56-06, http://jazz-doit.com.ua Concerts traditionally start at 8:30 p.m. May 13 Alexander Saratsky, Aleksey Tusov May 14 Majestic Duo Other live music clubs: GOLDEN GATE IRISH PUB, 15, Zolotovoritska St., 235-5188, http:// goldengatepubkiev.com/ TO DUBLIN IRISH PUB, 4 Raisy Okipnoi St., 569-5531, http://www.to-dublin.com.ua/ PIVNA NO.1 ON BASEYNA, 15 Baseyna St., 287-44-34, www.pivna1.com.ua DRAFT 1/2 Khoryva St., metro Kontraktova Ploshcha, 463-7330 KHLIB CLUB 12 Frunze St., www.myspace. com/xlibclub CHESHIRE CAT 9 Sklyarenko St., 428-2717 O’BRIEN’S 17A Mykhaylivska St., 279-1584 DAKOTA 14G Heroyiv Stalinhrada St., 4687410 U KRUZHKI 12/37 Dekabrystiv St., 5626262.
Compiled by Svitlana Kolesnykova
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Lifestyle 23
May 13, 2011
Mika Newton (L) rehearses her song ‘Angel’ together with sand artist Kseniya Simonova. (AP)
Who is Mika Newton? BY K AT E RY N A PA N OVA an d N ATA L I YA H ORBAN PANOVA@KYIVPOST.COM, HORBAN@KYIVPOST.COM
Ukraine’s hope for the Eurovision Song Contest in Dusseldorf rested on a 25-year-old blonde with a baby face who sings the song “Angel.” After a scandal-tainted vote in February, which seems to be a permanent feature of Eurovision selection rounds in Ukraine, Mika Newton departed for Germany hoping to make it to the May 12 semifinals. Newton’s real name is Oksana Hrytsai. Born in the little town of Burshtyn in Ivano-Frankivsk Oblast, she started singing and taking piano lessons from the age of nine. Her first
producer was her father – an amateur guitar player. Her second manager became a seasoned professional, Yuriy Falyosa. He discovered one of Ukraine’s best voices Ani Lorak, also a Eurovision participant in 2008. Falyosa spotted Hrytsai in 2002 at the Black Sea Games singing contest and took her under his wing. Since then she died her natural dark hair blonde and took a pseudonym. Her first name, Mika, is a derivative from Mick Jagger’s first name and Newton stands for a new tone. On the eve of the contest in Germany, international bookmakers, however, doubted the novelty of the Ukrainian entrant who ranked 27th among 43 contestants. But Newton was adamant about her chances for success.
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“We watched other performances and you can tell that everyone was nervous, missing beats at times. But people vote for those who radiate positive emotions,” she said before leaving for Dusseldorf. Apart from bookmakers, some Ukrainians who followed Newton’s thorny path to victory in primary selections also remain skeptical. Many argue that Jamala – an unusual jazz singer, whose dazzling performances and songs in English made her a celebrity in Ukraine in less than two years – should have represented Ukraine. When it transpired that many votes in favor of Newton were cast by the same people, Jamala’s fans demanded a re-count, but their
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Singer Mika Newton doesn‘t rank high among bookmakers but hopes to finish in the top 10 of the Eurovision Singing Contest in Dusseldorf. (AFP)
hot favorite refused to partake in the brawl. Scandals are probably what make Eurovision tick for many viewers. Selections are mired in corruption, as was the case with Alyosha last year and Svitlana Loboda the year before. One contestant, singer Anastasia Prikhodko, went as far as switching sides and singing for Russia in 2008 when Loboda got the lead. Apart from rows, all Eurovision candidates complain about the great cost of participation, which Ukraine has no budget to cover. Newtone said she’d have to pay nearly half a million dollars for all preparations. While she wouldn’t reveal the source of her funding, she fondly mentioned her new manager,
Tymofiy Nahorny. The ex-husband of Olympic gymnast Liliya Podkopaeva, Nahorny met Newtone two years ago and helped her win Eurovision rounds with the song “Angel.” Performing in Dusseldorf on May 12 and then on May 14 if she qualifies, Newton will wear her already famous, angel-like dress, which weighs some 40 kilos. Ukrainian sand artist Kseniya Simonova will help her drawing a picture on the sand in the background. Tune in for the live broadcast on May 14 at 10 p.m. on Ukraine’s First National Channel. Kyiv Post staff writers Kateryna Panova and Nataliya Horban can be reached at panova@kyivpost.com and horban@kyivpost.com
24 Lifestyle
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May 13, 2011
World in Ukraine
Editor’s Note: The Kyiv Post continues its “World in Ukraine” series with a look at the Netherlands after its Queens Day, a widely celebrated holiday, on April 30. Queen Beatrix is the reigning monarch. The newspaper will highlight Ukraine’s ties with Italy in June.
Some 200 hardy Dutch find success in Ukraine BY K AT YA G R U S H E N KO GRUSHENKO@KYIVPOST.COM
After centuries of roaring across oceans and colonizing lands, some Dutchmen now feel bored in the country of more than 16 million people and crave exploring new frontiers. As Ukraine eased entry requirements, some 200 Dutch businessmen embarked on a journey, which for many has turned out successful. The destination wasn’t completely alien to some as western parts of Ukraine have once been a part of the Austro-Hungarian Empire together with Holland. “The level of job satisfaction from working in the emerging market like Ukraine is much higher than in western countries,” said Dirck Smits van Oyen, 51. He first came to Kyiv in 1999 as a commercial director for Belgian Interbrew, which purchased Chernihivske breweries. “We would change a label or a shape
Joop Allers (Courtesy)
Ukraine–Netherlands highlights: • Direct foreign investment: $3,9 billion (9.7 percent of total FDI in Ukraine) • Trade turnover: $1,8 billion • Dutch export: $1,2 billion • Dutch import: $460 million
of the bottle and see an immediate spike in sales. Those addicted to growing margins can’t go back to the mature markets,” he said. And so he didn’t. After four years with a Belgium beer holding he turned down a promotion, which would have taken him back to Holland. Instead, Smits van Oyen set up Promarketing, a consultancy that teaches western standards of marketing and sales to Ukrainian companies. “Ukrainians are traditionally strong in IT and engineering and they are good in finance, but a commercial niche, which appeared here only 20 years ago, is underdeveloped,” he explained his business choice. Among his first and most ambitious projects was helping Ukraine’s government to win Euro 2012 bid to host a football championship. In 2004, he drafted a grand plan for UEFA but neither Poles nor Ukrainians had faith in it, said Smits van Oyen. But when two nations were shortlisted together with Italy and the tandem of Hungary and Croatia, Ukrainians started to see an opportunity. “Maybe we were a little arrogant, but we basically tried to convince UEFA that they would be stupid not to give a football championship to Ukraine and Poland that together have 85 million people,” he said. Promarketing consultants didn’t lie about Ukraine’s ailing infrastructure, Soviet-built stadiums and insufficient hotels. Instead, they presented it as a manageable business opportunity, which would benefit the participating countries and its visitors in the long term. “The fact that the heads of UEFA’s inspection mission and of the safety and security department were Dutchmen
Dirck Smits van Oyen (R) inspects Olympiysky Stadium in 2008. (Courtesy)
also helped,” he noted smiling. Another Dutchman in Ukraine, Joop Allers, can’t wait to attend the games in 2012. Allers, 30, is a partner in a couple of small businesses in Ukraine. For Allers, moving to Ukraine was his first professional adventure, and he has no regrets about it. He first came to Ukraine in 2004 at the age of 23, just before graduating from university. “I was in the right place at the right time,” he said. “Europeans were eye-
time grew into a recruitment agency Clarus. “In the Netherlands, the market is saturated with human resource companies. But here, it’s possible to make big steps,” he said adding that the greatest value of Ukraine for him and other Dutch is that every day in this country is not the same. Kyiv Post staff writer Katya Grushenko can be reached at grushenko@kyivpost. com
Queen’s day: a raucous royal party
Kingdom of Netherlands: • Government type: constitutional monarchy • Location: Western Europe, bordering the North Sea, between Belgium and Germany • Population: 16,8 million • Ethnic groups, in percent: Dutch 80.7, European 5, Indonesian 2.4, Turkish 2.2, Surinamese 2, Moroccan 2 • Languages: Dutch (official), Frisian (official) • Capital: Amsterdam • GDP (purchasing power parity): $680,4 billion in 2010 • GDP – per capita (PPP): $40,500 in 2010 • Industries: agroindustries, metal and engineering products, electrical machinery and equipment, chemicals, petroleum, construction, microelectronics, fishing Sources: Embassy of the Netherlands in Ukraine, CIA fact book
ing Ukraine because of the Orange Revolution and Eurovision. There were not many foreigners in the country at that time.” Struggling with learning the language and making friends in the beginning, he started a gentlemen’s club where Dutch expatriates could meet every month to talk about work and life in a casual atmosphere. With a Swedish partner, they opened a business consultancy, which with
Queen's Day celebration in Amsterdam. (Courtesy)
A day before Prince William of England was taking his nuptials, there was an alternative royal celebration in the Netherlands. Queen’s Day on April 30 marks the country’s former Queen Juliana’s birthday. The Dutch dressed in wild orange flock to central squares all over the country, but particularly Amsterdam, for massive celebrations. Queen Beatrix who succeeded late Juliana in 1980 oversees the celebrations. Even though her own birthday is on January 31, she chose to keep the holiday on her mother’s day both to honor her and because Holland in summer has a lot more opportunities for partying. The holiday is also known as the Orange Festival because the Dutch royal family belongs to a dynastic order of the House of Orange. With revelers decked out head to toe in tangerine colored costumes, the sight is somewhat similar to Ukraine’s Orange Revolution in 2004.
Queen Beatrix (blogspot.com)
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Lifestyle 25
May 13, 2011
Ambassador: Tax burden ’unequal’ the Molodist Film Festival. In January, there was a concert in philharmonic where Dutch and Ukrainian musicians played together.
BY K AT YA G R U S H E N KO GRUSHENKO@KYIVPOST.COM
Pieter Jan Wolthers, the ambassador of the Netherlands to Ukraine and Moldova, came to Ukraine for the first time in 1979 on a diplomatic mission to the Soviet Union. Wolthers said he could never imagine that, 30 years later, he would work in an independent Ukraine. Having served across numerous countries, including Poland, Libya and Romania, he returned to Kyiv in 2009 to strengthen business, social and cultural exchanges and oversee his country’s financial grants for social initiatives. Kyiv Post: Ukraine's undergone a tremendous makeover since your first visit. What has changed in your job compared to the 1970s? Pieter Jan Wolthers: There were some fundamental changes. At that time, for diplomats from Western Europe and the U.S., it was impossible to meet common citizens. People feared reprisals and the secret services. This is, fortunately enough, completely over. Now, I have an extensive network of relations with all types of civil society organizations and individual citizens. What stayed in place is bureaucracy that feeds corruption. A requirement to have a rubber stamp for any kind of document has been in place for the last 100 years while the world moved on and we live in the electronic era where we do away with paperwork.
Ambassador Pieter Jan Wolthers
KP: How deep is cooperation between the Dutch and Ukrainians? PW: There have been constant exchanges between Ukrainian officials and organizations and their Dutch counterparts. We run a social program, MATRA, which supports different initiatives, and it allows me to learn more about Ukraine: One day I hear from people who work with children with disabilities, and the other day about possibilities to save energy. We also work with a union of mayors that are interested in energysaving programs and want to make necessary adaptations in their cities … Then, we showed Dutch films at
KP: What are the Dutch business interests in Ukraine? PW: Our business community of hardly more than 200 people is active and sees enormous economic potential in this country. The two key factors that attract the most are a highly educated population and very fertile soil. Once a Dutch minister of agriculture visited Ukraine and said that one should be careful sticking his finger in the ground because, before he knows it, the finger will have roots. So Dutch businessmen are very much involved in Ukraine’s agriculture, doing everything from growing potatoes to building greenhouses. The importance could be well illustrated by the fact that the embassy has a separate agricultural councilor and two staff members that work for him. There is, of course, interest in other areas and I’m proud that none of the businesses pulled out during the financial crisis. On the contrary, we see businesses coming for the Euro 2012 football championship. KP: Is it true that many nonDutch companies send their investments abroad through the Netherlands to take advantage of low taxation? PW: That is certainly a part of the story. We do have a tax system that is attractive for companies
to set up their headquarters in the Netherlands. The Dutch tax office, however, requires a great degree of transparency, and the companies use this fact to improve t h e i r image as a transparent a n d reliable player. Even some Ukrainian companies come to our country to set up their headquarters for those reasons. KP: Does it show that the Ukrainian tax system is flawed? PW: Unfortunately, not everybody pays taxes in Ukraine, which makes the tax burden unequal. Tax evasion is something that we don’t tolerate psychologically in our country … there is a strong feeling for the common good. There are other countries where the approach was traditionally different, for example, where foreign powers occupied the territory and it became almost legitimate for citizens not to pay taxes to the occupying force. I would like to see a Ukraine where people could pay moderate taxes so that everybody could contribute. KP: So do you feel that Ukraine
i s moving forward? PW: President Viktor Yanukovych and Prime Minister Mykola Azarov were successful in formulating the reforms and starting to implement them. There is pressure to make progress in negotiations towards an association agreement with the European Union, including a comprehensive free trade agreement. We see things moving, we see commitments being made and followed up. It’s not always easy. The tax code is one example. It’s not ideal, but it’s a step forward. Now the government should be addressing customs, pension and housing reforms. Kyiv Post staff writer Katya Grushenko can be reached at grushenko@kyivpost. com
26 Photo Story
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May 13, 2011
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World War II veterans dwindle, but memories of great sacriďŹ ce remain Victory Day in Kyiv on May 9 was a sad, sulky and pensive affair. Instead of a traditional parade, a festive walk across Independence Square commemorated the 66th anniversary of the end of the World War II (2). It was not a milestone anniversary, so authorities decided to save up for Ukraine’s 20th independence celebration in August. President Viktor Yanukovych greeted a few hundred veterans and sparse crowds. Surviving soldiers, sailors and airmen, among others, represented the memory of more than 26 million Soviet citizens killed in the war (3). In Kyiv, no more than 8,000 veterans are still surviving. Participating veterans were outnumbered by chil-
dren who came to watch the procession (1). Far removed from the Soviet Union, these toddlers and schoolchildren will be the next to judge, venerate and mourn the events of 1939-1945. At the same time, nearly 20,000 military marched across the Red Square in Moscow, followed by some 100 armored trucks and tanks and five helicopters (4). In Russia, Victory Day remains the most glorious of holidays, despite all the still-raging controversies over many wartime issues, from the Nazi-Soviet Pact to the role of Ukrainian nationalists. Story by Yuliya Popova Photos by Yaroslaw Debelyi, AP
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Paparazzi 27
May 13, 2011
Donetsk celebrates its football glories
Romanian football star and Ukrainian coach Mircea Lucescu (L) gets a star.
Æ
Rinat Akhmetov gets a lift from his players.
Deputy Prime Minister Borys Kolesnikov (L) and former Shakhtar player Mykhailo Sokolovsky.
A Hollywood-like Walk of Fame honors Shakhtar football club stars.
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The Kyiv Post welcomes tips and contributions. Please e-mail your ideas to Lifestyle Editor Yulia Popova, at popova@kyivpost.com. Please include e-mail address and contact phone number for verification.
On the eve of the May 9 Victory Day, Donetsk football club Shakhtar – owned by billionaire Rinat Akhmetov – also honored its heroes. A path next to the southern entrance to the Donbass Arena Stadium was turned into the Walk of Fame to mark the 75th anniversary of the club. The alley so far features four stars dedicated to footballers Vitaly Starukhin, Mykhailo Sokolovsky, Yuriy Dehtyaryov and current coach Mircea Lucescu. Fans, club veterans and historians helped to draw the first four names and will add another 28 later. In 1996, Akhmetov bought the club and turned it into one of the most successful. Two years ago, Ukraine’s richest man invested $400 million in a state-of-the-art stadium for his club, Donbass Arena, which can seat up to 50,000 people. (UNIAN, AP)
25% discount for embassies
28 Lifestyle
www.kyivpost.com
May 13, 2011
Piano cafe: A welcome venue Æ20 bring a bucket of ice and two fresh glasses, as requested. To my taste, Krym is the better brand. This time, there was no desert or coffee, although the bar hosts a generous menu of desserts. And not only. The café lists its entire menu on its website. There one can find a generous listing of meals running from breakfast to dinner. Our total bill, bubbly included, came to Hr 542. Dining out in Ukraine, particularly in Kyiv, is often a trying experience. Most places are overpriced, staff is uninterested and for the most part, once you get there, you just want to leave. But not here. The smoke-free environment for me was a huge plus. The non-smoking room is divided from the smoking with a wall, and the ventilation was good. Nobody hurried us out. We arrived a little past 7 p.m. and were the last to leave – at 11 p.m. During those hours, customers came and went, while a group of women sat around a table almost as long as we did. They didn’t eat much, mostly drank red wine, and that was okay. There was another plus. There is a large hook in the bathroom where one can hang a bag or a jacket. Kyiv Post staff writer Natalia A. Feduschak can be reached at feduschak@ kyivpost.com. The Piano Cafe Music Bar has the right ambience and menu for an enjoyable night out. (Natalia Kravchuk)
Piano Café Music Bar, 4 Kontractova Ploscha, 425-2474, www.piano-cafe.com.ua.
Watch repairman’s priorities clear after 90 years of living Æ20 battled for 11 months and four days, inching forward on foot, before he was halted by an injury from a German shell that has left him with a thin, weak left leg. “I went into battle and cried, ‘For the Motherland, for Stalin!’ It never left our lips,” recalled Blyumkov, touching his cheek where a piece of metal from another enemy shell is still embedded. The veteran called Josef Stalin a “wise man” under whose leadership Soviet Union defeated “the fascist monster.” But he spoke about the war without pathos. Blyumkov pointed to his medal “For Courage” – the highest military award given to Soviet soldiers for bravery on the battlefield. He wouldn’t say, however, what act he received the award for. “A man on the front kills and shoots another man. It’s a colossal sin no matter who this man is. Why does anyone need to know about that?” he asked, adding that he doesn’t want his great-grandchildren to know what happened. Blyumkov’s heroism was rewarded after he finally emerged from hospitalization. The Soviet authorities gave him a decent pension and an apartment, he said, and he trained in his new profession. Long hours working on timepieces of all sizes and values has given the veteran much time to ponder on the two things that have defined his life – time and death. “If a person’s watch stops, then he or she is already sick. First, he has paid money for the watch; second, it has stopped; third, he thinks how to
ÆWatch-fixer says: ‘I am happy with the life I was given...Hands never can be turned back.’ fix it and looks for the watch-fixer, he feels despair in his soul. I believe, for example, that if I fixed his watch properly, I, in fact, have cured him,” mused Blyumkov, fiddling with a pair of tweezers, the watchmaker’s key instrument. In Soviet times, people most often brought classic mechanical designs such as the Pobeda, or Victory, or the Mayak, or Lighthouse. Now he repairs all kinds of timepieces from cheap electric watches to expensive ones such as Swiss-made Omegas and even vintage clocks. The display at the shop is everchanging, depending on what clients bring in. The clock-doctor is currently nursing back to health a beautiful 120-year-old German wall clock by Gustav Becker, brought in by a client who inherited it from his grandgrandmother and decided to give it a second life. Blyumkov is known as an expert in his field, a lucrative business. A man in a denim jacket came into the workshop and handed over a bro-
Mykhailo Blyumkov uses old Soviet equipment to repair all types of watches, from cuckoo clocks to Swiss-made vintage watches. (Joseph Sywenkyj)
ken Casio watch. “In ‘Secunda’ shop on Volodymyrska Street I was told they had run out of parts and they advised me to come to you,” he explained. Blyumkov has passed on his skills to his grandson Andriy, 41, who works in that shop on Volodymyrska Street. He also passed on his art to Andriy’s twin brother, Mykhaylo and their father.
As his life ticks on he said he has few regrets: “I am happy with the life I was given, I was destined to have. Hands never can be turned back.” Blyumkov retains not only an eye for detail, but also a liveliness and desire for the finer things in life. And his watch-fixer’s eyesight remained as sharp as ever as a blond woman in a
red leather jacket and matching pants entered the workshop about 6 p.m. “This is my beloved woman,” Blyumkov said with a smile. “When you have a loving woman next to you, your life’s fulfilled. Without her, life makes no sense.” Kyiv Post staff writer Oksana Faryna can be reached at faryna@kyivpost.com
www.kyivpost.com
May 13, 2011
Employment 29
Job announcement The Swiss-Ukrainian Mother and Child Health Program implemented by the Swiss Tropical and Public Health Institute and financed by the Swiss Agency for Development and Cooperation (SDC) is looking for candidate for the position of
Head of Program Implementation Office (in Kyiv) KEY REQUIREMENTS TO CANDIDATES: • demonstrated experience in project management, monitoring and evaluation; • at least 5 years managerial working experience. Degree in Public Health, MCH expertise and international cooperation preferred; • proven leadership skills, managing teams in a complex project environment. Experience in financial management, quality management and administration processes improvement; • excellent communication and writing skills; • experience in networking and policy dialogue; • languages: Ukrainian and Russian as native, English - upper-intermediate level; • readiness for frequent travel at national and to a minor extent on international level; • good PC skills (MS office, e-mail, skype, web-browsing); • high level of commitment, energy to manage changes.
Monitoring and Evaluation Coordinator Managerial Support Coordinator for its Program Implementation Office (PIO) in Kyiv.
KEY REQUIREMENTS TO CANDIDATES: • at least three years of working experience in international projects / organizations; • training and professional working experience in public health with a focus on mother-and-child health and management in health systems; • competence in monitoring / health-care-management fields (corresponding to the position applied to); • experience in preparing and managing professional events (conferences, training sessions, meetings, etc.); • languages: Ukrainian and Russian as native, good English skills; • team player; • good communication skills, high presentation skills; • ready to travel in partner regions; • good PC skills (MS office, e-mail, web-browsing, skype); • high commitment, dedication, self-motivation.
Please send your CV to PIO by e-mail: mch.kyiv@gmail.com till 27th of May. More information of Program you might find here: www.mch.org.ua
The
IS LOOKING FOR A
CHIEF OPERATING OFFICER We are searching for a dynamic, energetic leader who will oversee the advertising, marketing, web development and distribution divisions of the news organization to maximize revenue. This person will work in partnership with the editorial staff of the Kyiv Post to ensure that the organization retains its high level of trust and credibility in the community. This person is essential to ensuring that the news organization serves its readers and advertisers well. We are searching for a go-getter with business development experience who: Is well-connected and respected in Kyiv; Has experience in selling advertising online and in print, and in negotiating deals and agreements; Has the personal skills to lead, train and motivate the staff; Understands the competitive market for journalism in Ukraine; Has fresh ideas for monetizing journalistic content; Stays on top of fast-changing trends in the media industry.
Please send CVs, motivation letter and business proposal to Brian Bonner, senior editor of the Kyiv Post, at bonner@kyivpost.com
East Europe Foundation, Kyiv-based international charitable organization seeks candidates for the following positions:
Deputy Finance Director
Reporting to the Director of Finance, the Deputy Finance Director is responsible for doing the Foundation’s accounting, maintaining financial and managerial accounting systems, developing program budgets and monitoring spending, and reporting to Ukrainian tax authorities. Requirements: • Master’s (or equivalent) in accounting/finance • Minimum of 3 years’ experience as chief accountant • Knowledge of International Financial Reporting Standards (IFRS) • Advanced skills in accounting software • Advanced English
Accounting Assistant
Reporting to the Director of Finance, the Accounting Assistant is responsible for cash operations including cash withdrawals, expense reports, advances and reimbursements. Other responsibilities include assisting with procurement operations, preparing monthly reports, reporting to Ukrainian tax authorities, and maintaining accounting systems. Requirements: • Bachelor’s (or equivalent) in accounting/finance • At least 1 year of experience in accounting/finance • Proficiency in accounting software • English language a plus
Send CV to resumes@eurasia.kiev.ua. State job title in subject line of email. No phone inquiries, please. For more information about East Europe Foundation, please see www.eef.org.ua.
LEADER IN REPRODUCTIVE HEALTH AND POPULATION AND DEVELOPMENT United Nations Population Fund (UNFPA) invites applications from highly qualified, energetic, proactive and experienced professionals for the post of: COMMUNICATIONS AND ADVOCACY ASSOCIATE, SERVICE CONTRACT, PART-TIME who will be responsible for the design, management and coordination of the CO´s communications strategy and publications policy with the objective of increasing the visibility of UNFPA in the country and the awareness of UNFPA´s mandate and programmes among its partners, the media and the general public.
Full job description is available at http://jobs.undp.org/cj_view_job.cfm?job_id=23142 DEADLINE FOR APPLICATIONS IS 31/05/2011 All interested candidates should complete the UN PERSONAL HISTORY FORM* (P-11) available on http://undp.org.ua/en/jobs and attach it to the on-line application.
$*%"Š410/403&% 6,3"*/& +67&/*-& +645*$& 3&'03. 130+&$5 The European Bank for Reconstruction and Development is looking to recruit a
RECEPTIONIST for its Kyiv office The candidate will have the primary responsibility for receiving visitors to the Bank and handling in-coming telephone calls. In addition there will be some secretarial and general support functions. Key Duties and Responsibilities ‹ ( ‹ - ƒ ƒ ‹ . ƒ ƒ ƒ ‹ * ƒ ‹ + +- ( ƒ ƒ ƒ - ƒ ‹ ‹ ¢ ¢ / needs. Skills/Experience required ‹ 0 ‹
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If interested, please send your cover letter and CV (both in English) to kiev@kev.ebrd.com, subject RECEPTIONIST. The deadline for applications is 20 May 2011. The successful candidate is expected to start as soon as possible.
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30 Employment
www.kyivpost.com
May 13, 2011
Chemonics International is recruiting for the following long term positions for a Ukraine Tuberculosis project:
Chief of Party
- lead project technical direction; design and oversee project; support the overall program planning and budgeting processes; oversee the financial and administrative matters of the project and supervise staff. Minimum masters degree in health or social science; minimum 10 years of experience in design, implement and managing complex health project in developing countries. Experience working with TB counterparts and TB international donor agencies. Excellent communication skills, including writing skills in English. Native Ukrainian preferred.
Deputy Chief of Party/Medical Director - oversee implementation of TB technical and operational activities in accordance with the TB program work plan, including the supervision of a TB technical team. Medical degree and 10 years of experience in advising National TB program and/or implementing WHO standards for TB/MDR-TB control in Europe or US. Strong management and strategic planning skills. Excellent communication skills, including
writing skills in English. Native Ukrainian preferred.
Tuberculosis Specialists
evaluation component of a large USAID project. Native Ukrainian, proficient in English.
lead project tuberculosis activities in laboratory strengthening, policy, treatment and DOTS implementation, human resources development, procurement and logistics, community mobilization, work with marginalized populations including prison populations and advocacy. Medical degree with at least 5 years experience working in the relevant program area. Native Ukrainian preferred.
Infection Control Specialist
Monitoring and Evaluation Specialist - responsible for technical
Grants Specialist:
assistance on refining the reporting and recording system and overseeing of the E—TB manager. Establish requirements and guidelines for a performance monitoring system in compliance with project reporting. Minimum advanced degree in epidemiology or a public health related degree; professional training in project monitoring and evaluation and 7 years work experience directing monitoring and
- responsible for providing technical assistance in the introduction of infection control measures in hospitals, laboratories and out patient facilities. Minimum degree in hospital infection control or epidemiology and 5 years of experience in infection control required. Experience working with Sanitary and Epidemiology Institutes preferred. Native Ukrainian preferred, working knowledge of English. assist with the structuring and implementation of project grants fund. Analyze, assess and assist with budgetary and financial aspects of grant and contracts proposal; ensure effective liaison between project staff and grant recipients. Minimum 5 years of experience managing grants for USAID funded projects; proven excellent management and administrative skills with respect to managing grant programs and subcontracts.
Candidates with English, Russian and Ukrainian skills preferred. Please submit CV and cover letter via email to UTBRecruit@chemonics.com. Finalists will be contacted.
An International Trade Promotion Organization has an immediate opening for a
Gavilon, a US based leading commodity management firm, is establishing Kiev office and will be hiring a number of strategic roles to support its grain merchandising operations for:
• Grain and Oilseed Origination • Logistics and Trade Execution • Finance and Accounting Roles initially include trading, trade support, merchandising, logistics, execution, finance and accounting, office manager positions. If you’re an energetic self-starter with a desire to roll up your sleeves and be challenged, you’ll be a right fit for us. We invest in our employees, providing development opportunities and encouraging excellence. We believe in creating value and rewarding accordingly. So if you’re looking for an exciting career with a company that is positioned for aggressive growth, with a company you can be proud of, you’re exactly who we’re looking for. It’s easy to apply for a position at Gavilon. Here’s how to get started: • Go to www.gavilon.com/careers • Click on “Find Your Careerâ€? • Click on the drop down list titled “Locationâ€?, then click on “Kiev, Ukraineâ€? • View the up-to-date list of career opportunities
The
IS LOOKING FOR A
DESIGNER for the print media
Conditions: Location: 22B Prorizna street, courtyard Time: full-time job We offer: stable and on-time competitive wage; medical insurance Responsibilities: Create, review and assemble advertising and marketing layouts, graphics for special projects and price lists Create Employment/Classifieds section layouts according to the approved design concept of the publication
Requirements: Expert experience in Adobe Photoshop, Adobe Illustrator, In Design Strong understanding of publication design standards and specifications (Style Book) Knowledge and Experience with publishing work and printing technology Adobe Flash, ability to create a flash banner is an advantage English is an advantage Personal qualities: Responsibility Creativity Ability to work as a part of a team
Get more information about Kyiv Post at www.kyivpost.com/newspaper/ Please submit your resume with the desirable salary to hr@kyivpost.com indicating the name of the vacancy "Designer" in the subject line.
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Cossacks & Co Attorneys At Law is now looking for highly qualified, energetic, proactive and experienced professionals for positions of
JUNIOR LAWYER and ASSOCIATE LAWYER:
Key requirements: Relevant work experience as an associate in an international or reputable local law firm (1+ year – Junior Lawyer, 3+ year Associate Lawyer) Outstanding academic credentials from a top Ukrainian law school An LLM or similar degree from a US or UK law school is an advantage Excellent spoken and written English (including legal drafting), Ukrainian and Russian are a must (fluency in other foreign languages is a welcome) Ability to work under pressure Strong time management and organizational skills Strong analytical, legal writing and research skills What we offer: Competitive salary Excellent career growth opportunities Challenging experience and a team-spirited environment Only candidates matching the above criteria will be considered. Applications should be sent to:
hr@cossacksandco.com.
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Trade Promotion Manager for a full-time position located in Kyiv. Key responsibilities: Promoting Taiwanese trade shows/ exhibitions in Ukraine Assisting Taiwanese companies to promote their products in Ukraine Providing information about business opportunities Compilations of sector and market research in a wide range of industrial sectors Arrangement of trade delegation (buyerseller meets) Promotion & arrangement of seminar and catalogue shows
Job Requirements: University Degree 0~5 years experience Excellent communication skills in Russian and English/Chinese Ability to work in a team and under pressure Excellent computer skills If you are interested in this position, please send your C.V. to our e-mail: kyiv@taitra.org.tw by May 31 ,2011 For additional information please refer to our website: http://kyiv.taiwantrade.com.tw http://www.taiwantrade.com.tw We thank all applicants; however only those candidates selected for an interview will be contacted.
Đ¤Ń€Đ°Đ˝Ń†ŃƒĐˇŃ ĐşĐžĐźŃƒ ĐşĐžĐ˝Ń ĐžŃ€Ń†Đ¸ŃƒĐźŃƒ ÂŤĐ?ОВĐ?Đ ĐšĐ?Âť ĐˇĐ°Đ˝Đ¸ĐźĐ°ŃŽŃ‰ĐľĐźŃƒŃ Ń? Ń Ń‚Ń€ĐžĐ¸Ń‚ĐľĐťŃŒŃ Ń‚Đ˛ĐžĐź нОвОгО СащитнОгО Ń ĐžĐžŃ€ŃƒĐśĐľĐ˝Đ¸Ń? в ЧорнОйыНо,
Ń‚Ń€ĐľĐąŃƒŃŽŃ‚Ń Ń? ŃˆŃ‚Đ°Ń‚Đ˝Ń‹Đľ поровОдчики Ń ĐžĐżŃ‹Ń‚ĐžĐź ŃƒŃ Ń‚Đ˝ĐžĐłĐž и ĐżĐ¸Ń ŃŒĐźĐľĐ˝Đ˝ĐžĐłĐž Ń‚ĐľŃ…Đ˝Đ¸Ń‡ĐľŃ ĐşĐžĐłĐž поровОда c/на Đ°Đ˝ĐłĐťĐ¸ĐšŃ ĐşĐ¸Đš Ń?Сык. ĐœĐľŃ Ń‚Đž райОты – ĐžŃ„Đ¸Ń Đ˛ Киово ЗарпНата пО Ń€ĐľĐˇŃƒĐťŃŒŃ‚Đ°Ń‚Đ°Đź Ń ĐžĐąĐľŃ ĐľĐ´ĐžĐ˛Đ°Đ˝Đ¸Ń? Đ&#x;Ń€Đ¸Đ˛ĐľŃ‚Ń Ń‚Đ˛ŃƒĐľŃ‚Ń Ń? Снанио Ń„Ń€Đ°Đ˝Ń†ŃƒĐˇŃ ĐşĐžĐłĐž, как втОрОгО Ń?Сыка. Đ&#x;Ń€Đ¸Ń Ń‹ĐťĐ°ĐšŃ‚Đľ роСюПо на Ń?ĐťĐľĐşŃ‚Ń€ĐžĐ˝Đ˝ŃƒŃŽ ĐżĐžŃ‡Ń‚Ńƒ vbouratevich@gmail.com. Đ&#x;РОХЏБĐ? ОБРĐ?ĐŠĐ?ТЏХЯ ТОЛЏКО ĐĄĐžĐ˜ĐĄĐšĐ?ТЕЛЕЙ, Đ&#x;РОРĐ?БОТĐ?Đ’Đ¨Đ˜ĐĽ ШТĐ?ТĐ?ĐŤĐœ Đ&#x;Đ•Đ Đ•Đ’ĐžĐ”Đ§Đ˜ĐšĐžĐœ ТЕмĐ?Đ˜Đ§Đ•ĐĄĐšĐžĐ“Đž Đ&#x;ЕРЕВОДĐ? Đ?Đ• ĐœĐ•Đ?Đ•Đ• 5 ЛЕТ.
Ukrainian representative office of global international CRO opened vacancy for
CRA with 2+ years of experience located in Kiev to identify, select, initiate, monitor and close-out investigational sites for clinical studies. 26"-*'*$"5*0/4 &91&3*&/$& 3&26*3&% t .FEJDBM %PDUPS EFHSFF JT SFRVJSFE t " NJOJNVN PG ZFBST PG DMJOJDBM SFTFBSDI FYQFSJFODF JT SFRVJSFE t $BOEJEBUF NVTU CF BCMF UP EFNPOTUSBUF FGGFDUJWF UJNFŠNBOBHFNFOU TLJMMT CZ QSJPSJUJ[JOH XPSLMPBE t (PPE JOUFSQFSTPOBM TLJMMT FGGFDUJWF WFSCBM BOE XSJUUFO DPNNVOJDBUJPO UIF BCJMJUZ UP XPSL XJUIJO B UFBN BSF BMTP SFRVJSFE t 'MVFOU &OHMJTI JT SFRVJSFE t $PNQVUFS MJUFSBDZ JO CBTJD XPSE FYDFM QSPDFTTJOH JT SFRVJSFE Compensation and other conditions would be discussed based on the results of interview. Please send your CV in English in case you are interested in the offer.
E-mail: Iuliia_gyra@mbquest.net Mobile: +38 093 392 94 44
www.kyivpost.com
Employment/Classifieds 31
May 13, 2011
How to place an Employment Ad in the
By Fax, Phone or E-mail (from 9 a.m. to 6p.m. Ask for Nataliia Protasova) Tel. +380 44 234 6503 Fax. +380 44 234 6330
The
One of Ukraine's top news sources, has an ongoing student internship program. We have openings for students who are:
IS LOOKING FOR A
Prices for ads (UAH) Size (mm)
B&W
Color
15 boxes 260Ă—179,5
11 931 15 907
9 boxes 154,5Ă—179,5
7 158
9 544
4 boxes 102x118
3 333
4 444
3 boxes 49,2Ă—179,5
2 500
3 333
2 boxes 102Ă—56,5
1 666
2 222
1 boxes 49,2Ă—56,5
833
1 111
majoring in journalism or mass communications or studying to become translators
To be considered, please send CV to Brian Bonner, chief editor, Kyiv Post at bonner@kyivpost.com
e-mail: protasova@kyivpost.com
All prices are given without VAT.
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THE IDEAL CANDIDATE SHOULD: Have fluency in English, Ukrainian and Russian. Show good news judgment and have the ability to work quickly under deadline. Have experience in news editing. Please send CV, three writing or editing samples and an explanation of why you want to work for the Kyiv Post, one of Ukraine’s top news sources, to:
Brian Bonner, chief editor, Kyiv Post at bonner@kyivpost.com
Project manager
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32 News
www.kyivpost.com
May 13, 2011
Soviet symbols trigger clash Æ2 activists tore off commemorative orange-and-black St. George’s ribbons, a Russian and then Soviet military honor, from those who wore them, including World War II veterans. They burned confiscated Soviet-style red flags and threw rocks at pro-Russian groups. Supporters of Ukraine’s Communist Party and pro-Russian groups, meanwhile, escalated the violence by forcing their way to Lviv’s Hill of Glory Memorial Complex under police escort. There, they unveiled a 30-meterlong red flag despite the court order, which also banned the use of Soviet and Nazi symbols on May 9, and previous assurances they would not do so. Demonstrators clashed with police, while residents refused to let the buses leave. In one of the day’s most unnerving incidences, Sviatoslav Sopilnyk, reportedly a former police captain, shot at Ukrainian nationalist demonstrators, hitting one Svoboda Party member in the knee with a rubber bullet. Although he claims self-defense, a criminal case has been opened against him. “Judging from those events that happened in Lviv, in Kyiv and other regions of the country, those events that occurred around the red flag, around fights that in my opinion were planned and incited and implemented by the current authorities…all this is the beginning of a project to divide the territory of Ukraine,” said former Prime Minister Yulia Tymoshenko. Sadovyi told reporters in his May 10 news conference he blamed law enforcement agencies for not doing their job as violence unfolded.
Like other cities in Ukraine, Lviv does not control its police forces. Rather, they are managed by the Interior Ministry based in Kyiv. Fearing provocations, the mayor said the city had specifically gone to court to obtain an order banning the gathering of political and citizen groups. Sadovyi said he wanted to know why pro-Russian groups were “allowed to go to the Hill of Glory by bus and why did the police [strike with batons] Lviv residents and protect [the instigators]? These were specially planned things.” Interior Ministry spokespeople said their ministry had no idea pro-Russian groups would come to the city until the last minute. Meanwhile, Viktor Ratushniak, a deputy interior minister, told reporters in Kyiv on May 11 that he was satisfied with the reaction of Lviv’s police. “Despite the fact that there were attempts to destabilize the situation, the police prevented the escalation of individual violations of public order into mass disorder,” Ratushniak said. Ratushniak said investigators are looking into why a red flag was unveiled at the Hill of Glory. But, in his opinion, the clashes were instigated by Svoboda Party members. Politicians and analysts say the stage for conflict was set by parliament, which voted to allow use on May 9 of the Soviet Victory Day flag – replete with star, hammer and sickle. It also honors the Soviet 150th Infantry Division and symbolizes the 1945 Soviet role in the victory over Nazi Germany. Soviet symbols are an anathema to many residents of nationally-oriented western Ukraine, which fell under Soviet rule at the end of World War II.
Raising the Soviet flag over Berlin's Reichstag. The historic photograph was taken on May 2, 1945, by Yevgeny Khaldei, just six days before Nazi Germany's surrender. (Ukrinform)
Many in this Ukrainian-speaking region view the Soviet period as an occupation. In contrast, pro-Russian and proSoviet sentiment is higher in the mostly Russian-speaking eastern and southern regions of Ukraine. Victor Rohov, first deputy of Lviv’s branch of the Party of Regions, however, said he felt the rights of citizens who wanted to honor Soviet war dead were violated on May 9. He said that many individuals who carried red carnations, which is “the least expensive flower,” were harassed by Svoboda Party members. As for the use of red flags, he noted a double standard existed in western Ukraine. “If people can’t carry the red flag, then they shouldn’t be able to carry the Bandera flag,” he said, referring to the black-and-red standard of the Ukrainian Insurgent Army, known by the UPA acronym, which is frequently seen in western Ukraine.
UPA was the military wing of the Organization of Ukrainian Nationalists’ faction led by Stepan Bandera (1909-1959), who was killed by a KGB agent in Munich. OUN’s goal was the establishment of an independent Ukrainian state and violence was accepted as a political tool. Iryna Sekh, a leading Svoboda Party member, said her group had done everything possible to avert confrontation. “These were planned provocations,” she said. “Svoboda did all that we could so this situation would not happen.” Sekh denied that party members hurled rocks at veterans, but could not stand by as its own members were attacked by pro-Russia nationalists. “Don’t confuse soccer fans with our party members,” she said. The clashes, meanwhile, are already testing Ukraine’s warming relationship with Russia, where politicians called for an investigation and punishment of those responsible.
They said it was insulting that the wreath Russia’s general council Oleh Astahov tried to lay at the Hill of Glory was seized by nationalists and then trampled. “What happened in Lviv on May 9, this is a shameful sight, this is an insult to the memory of the fallen, and an undisguised outrage over the symbols of the victory,” Leonid Slutskiy, deputy head of the Russian parliament’s international relations committee, said on May 10. Slutskiy said Moscow would react to the Lviv events with an “identical situation.” On May 11, however, Ukraine’s Foreign Ministry testily responded that it expected greater tolerance from its neighbor where sensitive questions of mutual history were involved. “Unfortunately, the reaction of the Russian side to the Lviv events show that the instruments from the arsenal of antiUkrainian campaigns of the past were not thrown into the scrap heap of history,” the ministry said in a statement. “We are convinced that Ukraine and Russia will demonstrate to the entire world an example of tolerance and mutual respect in such sensitive questions as historical memory and state identity.” Ultimately, analysts said, the May 9 conflicts were a theatrical show that played into the hands of Ukrainian and Russian extremist groups, as well as the Kremlin, police services and the current government. “Everyone received their beneficial political dividends,” said Taras Voznyak, a political analyst and editor of Lviv’s respected “Ji” magazine. Kyiv Post staff writer Natalia A. Feduschak can be reached at feduschak@ kyivpost.com.