Collective Creativity

How former welder Vasyl Khmelnytsky and Navy officer Andriy Ivanov became Kyiv’s largest developers

On one of the Saturdays back in 1986, a young welder Vasyl was dragging a piano up to the ninth floor. It was already the seventh one within a day, which he, along with a crew of loaders, hauled across Leningrad [now Saint Petersburg]. At the end of the exhausting working day, the crew received 4 rubles each, while Vasyl spent all the money he earned on a taxi just to get home to bed as soon as possible.

“That day I learned that hard work does not always bring good money,” the former welder and now a man worth a third of a billion U.S. dollars, Vasyl Khmelnytsky, says with a smile. “We need to get creative about money: sometimes it’s easy to earn it, but you might fail to make any money at all, despite all your blood and sweat.”

Khmelnytsky and his younger partner Andriy Ivanov (ranked 70th by Forbes) are two of the most low-profile Ukrainian businessmen. They have been working together for so long that their business, Kyiv Investment Group (KIG), is often called “Khmelnytsky – Ivanov”. Few entrepreneurs can boast of so many myths about themselves and their businesses. Here are some of them: Liudmyla Kuchma [former president Leonid Kuchma’s wife] enjoyed dancing with Khmelnytsky so this helped him acquire Zaporizhstal steelmaking plant; the partners managed first to be sponsors, and a little later, enemies of Yulia Tymoshenko; media wrote about them as protégés of Kyiv Mayor Oleksandr Omelchenko, malicious raiders, and then partners of another Kyiv Mayor Leonid Chernovetsky’s son-in-law.

The opinion of the businessmen’s colleagues is quite different. “Khmelnytsky is one of the few ‘old school’ Ukrainian businessmen who made his own reputation,” says Oleksandr Yaroslavsky. He is echoed by the owner of KM Core Holding, Yevhen Utkin: “Vasyl is a classic self-made man. He is a businessman without special education and successful almost in all of his endeavors.”

Today, UDP, which is co-owned by a 47-year-old Khmelnytsky and a 48-year-old Ivanov, is one of Ukraine’s largest developers and construction companies. The men are partners in dozens of various businesses – from the Poltava Diamond Plant to the Russian film company Star Media.

Forbes managed to interview Mr. Khmelnytsky and get written answers to its questions from Mr. Ivanov, as well as communicate with their numerous partners, rivals, and enemies.

Who are Ivanov and Khmelnytsky?

Businessmen in the oil industry

In 1986, 20-year-old Khmelnytsky moved to make some money in Leningrad, where his older brother studied at the local trade institute. By that time, Vatutin had graduated from a vocational school in the town of Vatutine, Cherkasy region, qualifying as a gas and arc welder and had served in the Soviet army. The welder’s salary of 120 rubles was not enough for him, so he got a second job hauling furniture on weekends.

That’s where he learned a lesson in “piano philosophy.” Khmelnytsky says that he was “an enterprising hard-working guy,” and about six months later he was appointed a foreman. When the co-op movement became a thing in the Soviet Union, he set up several construction brigades and earned enough money to buy his first car, a blue Model 6 Zhiguli.

It was a fortunate acquaintance with a neighbor which helped him move on to another level. He shared the same floor in a dorm with Aleksandr Varvarin. In late 1980’s, together with Khmelnytsky, they established a building cooperative Onyx. They also had someone to learn from. Varvarin’s elder brother Dmitry had already become a major businessman by then. Khmelnytsky met with Varvarin Senior in 1989. “He’d already owned a powerful business by then,” Khmelnytsky recalls. “Orimi Wood was the Soviet Union’s second largest timber producer and exporter following LesExport.”

According to him, Dmitry invited his younger brother to head the oil sector of his business, offering Khmelnytsky to become his deputy. Orimi Oil worked in a following scheme: the young businessmen offered directors of “exhausted” Surgut-based oil fields to have their wells repaired, which could lead to a three-four-fold output growth. “For example, the deposit would yield 5 tonnes per day, and after repair it would be 20 tonnes. We were entitled to get 50% of the margin, i.e., 7.5 tonnes,” Khmelnytsky explains. The oil obtained was then processed at the Angarsk refinery, and petroleum products were sold across Russia and Ukraine. The edition could not reach out for comments to Alexander Varvarin, while Dmitry was killed backed in 2000.

Soon the volume of fuel supplies to Ukraine soared so much that it was necessary to open a regional branch, and it was the Ukrainian-born Khmelnytsky who was assigned to head it.

Around the same time, a new top manager, a graduate of the Leningrad Higher Naval School Andriy Ivanov, joined Orimi. “Varvarin suggested that I lead the oil business in Samara or timber production in Siberia. I chose Samara,” Ivanov told Forbes.

Most of the “Samara gasoline” was sold in Ukraine, therefore a closer acquaintance of the two heads of the branches was a just a matter of time. Former welder Khmelnytsky and naval officer Ivanov became good friends. When in 1994 Ivanov chose with whom he should continue working with – Varvarin or Khmelnytsky – he chose the latter. “Why did Ivanov follow me? Probably, it was because he was comfortable working with me,” Khmelnytsky says, shrugging his shoulders.

It was a fortunate occasion that helped us become independent.

In 1993, inflation in Ukraine hit more than 4,800%. Engaging in trade transactions was a risky endeavor, to put it mildly. Khmelnytsky gives such an example: “We supplied 5,000 tonnes of petroleum products to the Mariupol district. We saw our money only six months later, and we could only buy a single car for it. Had they paid us right away, we could have bought 100 such cars.” “That mass of coupons [transitional currency] had to be “turned” into something more reliable. We needed U.S. dollars, which we could get from exports,” Ivanov explains.

That’s how an idea came up to sell metal produced at Zaporizhstal. We chose this plant precisely because we had supplied petroleum products there and knew its top managers. Our head office was not too enthusiastic about the idea of the Ukrainian branch. “This would be their new non-core business, and they did not want to take any chances,” says Khmelnytsky. “We took up all the risks and concluded the deal ourselves.” And this is how the two partners launched a new line of business – metal trading. According to a shareholder agreement with Varvarin, if one of the partners was not willing to enter into a new business, he had to sell his share to other partners. Khmelnytsky and Ivanov took advantage of this condition and bought the Kyiv branch of Orimi from Varvarin. “We paid about half a million dollars,” Khmelnytsky recalls.  “We parted nicely. After that, we had three or four other businesses with Varvarin.” At the same period, the “Khmelnytsky – Ivanov” pair decided who would be a senior partner. “By that D day, I simply had more money, so I was able to invest more in our joint business,” explains Khmelnytsky, who received the controlling stake. Ivanov received a blocking stake.

Real-Group, that was the name partners chose for their company initially focused on the trade in metals and petroleum products. But as early as in the mid-1990s, traders found a higher margin industry – a wild stock market. “In Russia, mass privatization began a few years earlier than in Ukraine,” Khmelnytsky said. Varvarin actively participated in it and often attracted us to this work. Therefore, when privatization reached Ukraine, we were up and ready.”

At first, traders were engaged mostly in speculative transactions. Khmelnytsky cites an example: in 1997 they bought from the population a 10% stake in the Bila Tserkva-based plant Rosava for $3 million.  Just a month later, a western investment fund offered him to buy it off for $5 million. When another buyer emerged, the fund easily raised the price to $7 million. The partners believed that the Ukrainian stock market would repeat the Russian trajectory – RTS rose 5.7-fold from 1995 to 1997 – so they went on buying up shares of dozens of Ukrainian companies. During the 1998 crisis, the value of their investment portfolio collapsed from $20 million to $4 million. “We decided then to make strategic investments, so we further tried to acquire controlling stakes in enterprises,” says the senior partner.

The skills of buying up shares came in handy when Khmelnytsky and Ivanov focused on Ukraine’s fourth largest steelmaking plant, Zaporizhstal.

Steelmakers

“We looked at the privatization of Zaporizhstal, since there was a group that had already started buying,” Ivanov wrote. “[Otherwise,] we could have lost the opportunity to work with the plant.” The government scheduled to sell Zaporizhstal in 1998. The group, which Ivanov didn’t elaborate on, consisted of the owners of Industrial Bank Ihor Dvoretsky, Artur Abdinov, and their partners.

Having enlisted the support of the plant’s CEO Vitaly Satsky, they began to buy up shares from the staff of Zaporizhstal. Khmelnytsky and Ivanov accepted the challenge. Their allies in the fight against that group was a major trader who worked with the plant, Midland, a group owned by Russian businessmen Eduard Shifrin and Alex Schneider. The race has begun to determine who would succeed to consolidate a larger package. “The last 9% we bought at auction set up by the State Property Fund for $20 million, which was not cheap,” says Khmelnytsky.

The trump card in the fight for Zaporizhstal was a 50%+1 share, which remained in the state ownership. In the fall of 1998, this package was transferred to Verkhovna Rada deputy Vasyl Khmelnytsky. How did he manage to achieve this result? “Vasyl Ivanovych is an excellent negotiator,” says Kostyantyn Yefymenko, who is now a first deputy minister of infrastructure and a partner of Khmelnytsky. “It’s the man who always finds a common language with everyone.” Khmelnytsky’s ability to negotiate was stressed by almost all businessmen with whom Forbes journalists communicated while writing this piece.

“I came to the state property fund and told them about my plans and opportunities. They consulted with the government and gave the package under my management,” Khmelnytsky said modestly. “Such issues were never resolved without the knowledge of the then Ukrainian President Leonid Kuchma. Traditionally, businesses were given to businessmen close to him,” notes political scientist Kost Bondarenko, the author of Kuchma’s biography. “In Zaporizhia, ‘Red director’ Satsky was a real heavyweight. Obviously, this issue was solved with the participation of quite a lot of actors.”

Having an argument in the form of a state stake, Khmelnytsky and Ivanov managed to have all parties sit at the negotiating table. “By 2000, a joint stock agreement was signed. We were responsible for purchasing related enterprises, Midland was engaged in trading and export, while the Zaporizhia group was in charge of finances,” Ivanov says. “All [shares of Zaporizhstal and related companies – Forbes] were bought in equal shares, so there was no conflict of interest.”

When the privatization was completed, each group owned about a third of Zaporizhstal. According to Khmelnytsky, they paid a total of about $70 million for their share. “Khmelnytsky and Ivanov are very smart people. They are very comfortable partners. There has never been any conflict,” says Midland Resources Holding CEO Inna Serhienko. Dvoretsky and Satsky found no time in their schedule to talk to Forbes.

Investors

It is difficult to find the two people so different as Khmelnytsky and Ivanov. It’s no secret who plays the role of a good and bad cop in the company. During the conversation, Khmelnytsky jokes a lot, sincerely speaks about his misses and failures. “Vasyl Ivanovych is like a child, he’s straightforward and open, but in business he is not so simple,” notes Lev Myrymsky, a developer who built a residential complex in Crimea’s Yalta together with Kyiv Investment Group.

Friends in business

Ivanov does not even try to present himself as a simple guy – there’s not a single superfluous word or emotion coming from him. He met with Forbes journalists but refused to give an interview, promising to answer all questions in writing. “Andriy carefully prepares for every occasion and controls everything,” says one of the top managers at KIG.

Ivanov describes the distribution of roles as follows: “I concentrate 70% of my attention on tactical issues and 30% on strategic issues. Khmelnytsky does exactly the opposite.” So it is, Myrymsky confirms: “If Khmelnytsky is a generator of ideas, a negotiator and an inspirer, Ivanov is a workhorse that systematically and successfully brings projects to their successful completion.”

After settling the conflict at Zaporizhstal, the partners focused on the capital city of Kyiv. In the early 2000s, Khmelnytsky and Ivanov worked as a private equity fund. “We did not have a strategy like only buying steelmaking plants, pharmaceutical companies or bread producers. We came for everything which we could derive additional profitability from,” Khmelnytsky said. “We did not intend to manage all these companies.” It happened to become an omnivorous private equity fund, with a sphere of interest covering Kyiv’s land plots, banks, a glass factory, advertising agencies, recreational facilities, and dozens of other businesses.

In order to structure and control this heap of assets, in 2003 the partners established the management company called Kyiv Investment Group. Among its founders were not only Khmelnytsky (slightly more than 50%) and Ivanov (about 25%), but also a group of junior partners.

These were managers who oversaw the various directions of the group’s activities. Khmelnytsky adopted the optional scheme of incentives for his managers, which was also used by Varvarin. The idea was as follows: the more the manager earns for the company, the greater their bonus, which they can convert into shares of the group. “When the reward for a successful activity is significant, the manager receives an offer, which, for example, I could not refuse back in the day,” explains Serhiy Pavlenko, a junior partner at KIG, who oversaw a glass business in 2000’s. The stake in KIG is not life annuity. If a younger partner brings regular losses to KIG, they part – as was the case with Oleksandr Fedyaev, who developed a green energy project.

The difference between KIG and most business groups is that they attracted a partner in almost every new business area, the one who has money and expertise. “The more partners, the better: there are fewer risks, and in case some problems arise, everyone can contribute to their settlement,” Khmelnytsky is convinced.

The myth that KIG in early 2000’s was buying up everything that was not protected well is greatly exaggerated. Ivanov says that in KIG there worked up to 40 analysts who carefully assessed the prospects and risks of each investment.

A separate chapter in the history of the KIG is its joint projects with the state. “We saw the possibility of a mutually beneficial public-private partnership,” Ivanov explains. The investment idea seemed simple: KIG would invest money in weak public utility companies, wrap them in a nice package and sell them to strategic investors, preferably Western ones.

The first major project was the grain business. By 2003, KIG companies had bought in the secondary market about 40% of Kyivkhlib bread producer and almost half of Kyivmlyn. Businessmen came to Kyiv Mayor Oleksandr Omelchenko with the idea to create Bread of Kyiv, a vertically integrated company with a “grain-flour-bread-retail” process. “In this company, the city retained its control,” Omelchenko said. “But thanks to integration, we could ensure stocks of grain and keep bread prices low.” In February 2004, the Kyiv Council, from the third attempt, created CJSC “Bread of Kyiv,” where the city had a controlling stake, while KIG had more than 40%.

At first glance, a good idea turned into a series of never-ending conflicts between KIG and the Council, which refused to raise prices for “social bread.” In 2008, KIG withdrew from this business, selling the entire package to the adviser to the governor of Kredobank Board, Vladyslav Atroshenko. According to Khmelnytsky, the profitability of this problem investment was about 10%.

Group of comrades

The second time KIG tried to do business with the state was closer to the middle of 2000s when it invested in the energy sector and the Kyiv housing and utility services. “We bought 18% of Kyivenergo from the population, some small packages of Kyivgaz and Kyivvodokanal. We spent several tens of millions on that,” Khmelnytsky recalls. The fact that these were deeply subsidized enterprises did not bother the partners; they bid on the development of the stock market and the arrival of foreign investors. “In developed countries, all these enterprises are profitable, and they are very fond of institutional investors – pension funds and insurance companies,” Ivanov said. As in the grain business, KIG wanted to create with the city a joint venture Kyivenergoholding (KEH), which would include Kyivenergo, Kyivgaz and Kyivvodokanal. According to the calculations by KIG analysts, the pooling of assets would bring a significant reduction in costs. Omelchenko gave the project a green light and … but lost elections in 2006. The new city head, Leonid Chernovetsky, was categorically against the creation of such a holding. “Chernovetsky was initially negative, but three or four months later we found a common language with him,” Khmelnytsky says. As Forbes was told by a top manager at KIG, they agreed after a new partner appeared in KEH, Chernovetsky’s son-in-law Vyacheslav Suprunenko.

Without waiting for the arrival of foreign investors, as early as 2007, KIG sold its share of the holding’s assets. Rinat Akhmetov’s DTEK bought their stake in Kyivenergo, while shares of other companies went to Suprunenko. “We sold because we did not have a controlling stake and we were not comfortable working there,” Khmelnytsky says. According to him, they withdrew from the whole KEH thing at zero profit at best.

KIG was much better off making money without the state participation. A textbook example is the Kyiv-based soft drinks producer Rosinka, which helped the partners make money twice.

In 2006, Khmelnytsky and Ivanov clashed for this plant with its owner, the group of companies “TEKT” owned by Vadym Hryb. He was also buying shares from the staff and wanted to change the plant’s management. The war did not last long. “In order not to make things messy, we sat down and agreed that we were buying together, but we remained the plant’s managers,” Hryb notes. “KIG had 55%, and we had 45%.” KIG and Hryb eventually spent $20 million on 100% of Rosinka shares. A year later the company was sold the French manufacturer of soft drinks Orangina Group for $62 million. In autumn 2009, the Japanese holding, Suntory, acquired Orangina Group, the strategy changed, and the Ukrainian company became a burden. “The Japanese offered to buy Rosinka back for $25 million, but we agreed on $12 million,” Khmelnytsky said. “And almost immediately we resold for $5-7 million more than that.”

Developers

In the summer of 2003, a group of Ukrainian tourists walked around Los Angeles. The guide stopped near a large mansion with the Sale sign and said: “The house itself is worth nothing, but the land on which it stands is very expensive.” Among the tourists were Khmelnytsky, Ivanov, as well as Kyiv Mayor Omelchenko, who came to attend a fight between Vitali Klitschko and Lennox Lewis. Ivanov recalls that for a long time they argued with the mayor on how many loss-making enterprises there are in Kyiv standing on a very expensive land.

Upon their return to the capital, businessmen began hunting for state-owned companies that own large plots of land. Soon under their control fell an agricultural company Troyanda (20 hectares), state farm Hotivsky (1,500 ha), Ukrvino (4 ha), and a Motorcycle plant (29.5 ha). Those turned out to be extremely successful investments – for example, they acquired the Motorcycle plant for UAH 59.8 million (today the land on which it is located is 15 times more expensive, according to a very conservative assessment).

The first development project in 2003 was a shopping center called “Horodok”. Reconstruction of one of the buildings of the Kyiv-based plant Zvaryuvannia took nine months and cost $4.8 million. Investments paid off in a few years. “There was excitement and ambition to create,” says KIG partner Oleh Polishchuk, responsible for commercial real estate.

Ten years later, “excitement and ambition” turned Khmelnytsky and Ivanov into a pair of the country’s major developers.

“As much as we wanted it, we could not have become the top moguls in steelmaking or power engineering, but in construction, we could succeed,” Khmelnytsky says.

Enter and exit

In the second half of 2000’s, the group’s priority was real estate. “We realized that it’s time to focus on one, two, or three directions at max,” Ivanov explains. “We started building large facilities and decided to arrange a large-scale sale of non-core assets.” In 2006-2008, it was a very good time to sell: for only a third of Zaporizhstal, KIG received over $400 million. But this period was not that successful for starting large construction projects.

In the development business, UDP (the KIG division responsible for construction) initially relied on the development of entire neighborhoods. For example, the total area of residential complexes Parkove Misto and Novopecherski Lypky, which they had begun to build before the crisis, was almost 250,000 square meters.

The partners expected that they would attract at IPO the money needed for large-scale construction. “We were ready, we went through due diligence, for which we paid $5 million. We hired two investment banks,” recalls Khmelnytsky. “The company was estimated at $1.5 billion, but the market collapsed.” UDP entered the crisis without money, with two unfinished and almost unsold real estate complexes.

“Khmelnytsky decided not to freeze the construction and not to lower the class of housing,” says the owner of K.A. Development, Ihor Nikonov, who in partnership with UDP has built a number of facilities. The problem was solved with the help of Sberbank, which increased the credit line for UDP from $250 million to $385 million. The fact that a young Ukrainian development company received a loan for construction in the crisis period stirred even the Russian media. Novaya Gazeta wrote that the Ukrainian company was helped by the fact that Khmelnytsky is friends with the chairman of the board of the Russian Sberbank, German Gref. “We got acquainted about 10 years ago, when he was Minister of Economy,” Khmelnytsky confirms. “But a good relationship with Gref gives you the right to get advice on what books to read, not to get concessional loans in his bank.” According to Ivanov, it was possible to get the loan after giving everything as a pledge and providing personal guarantees.

Unlike most developers, UDP passed through the crisis without frozen facilities and overdue loans. Financial support from Sberbank and tidbits of the capital’s land allowed the company to quickly become one of the largest developers. Another reason that UDP manages to develop more than 200,000 square meters per year is a large number of external partners. “If we lack resources somewhere, we attract partners. For example, Ihor Nikonov or Denis Kostrzhevsky,” Khmelnytsky says. With the first partner, UDP built the largest metropolitan shopping center Ocean Plaza, which was later sold to the Russian group “TPS Real Estate” for the record price in the Ukrainian market, $349 million. With the latter partner, they manage the Kyiv airport and build infrastructure facilities around it.

Today the UDP portfolio includes six residential complexes and several shopping centers with a total area of ​​over 3 million square meters.  In today’s prices, this property costs more than $6 billion. How quickly can these millions of square meters be built and sold? Khmelnytsky smiles… “We are a cautious group, we do not take risks just like that. Until more than half of the apartments in their first stage of construction are sold, we are not going to go for a second one,” says the entrepreneur.

Dreamers

In his largest-scale project Bionic Hill, Khmelnytsky changed his own rules. On a plot of 147 hectares near Kyiv, he is building an innovation park, where 35,000 IT experts can get jobs, and another 12,000 reside. A school, an institute, offices, a business incubator, real estate, restaurants, and a cinema – that’s an incomplete list of objects that the millionaire is going to build. The volume of investments is $1 billion. Bionic Hill has no partners, preliminary orders for rent or purchase of square meters yet. “I do not see profit there, and Khmelnytsky knows about it,” Nikonov said in an interview with Forbes a year ago. “Vasyl asked my opinion on this project, and I replied that such a park is the 130th problem of our IT market, which needs to be addressed,” says Utkin.

Khmelnytsky does not seem to be bothered with that though. “Someone always has to become a pioneer. We started to deal with the Kyiv airport 10 years ago, and everyone thought we were crazy. And today everyone says: “Oh, what a project! How did you get it? Whom did you pay bribes?” Khmelnytsky says, getting emotional. “The same thing is going to be here.” Five years after the launch, Bionic Hill will start earning money, and in 10 years it will become a super-successful project, while in 20 years there will be a stir here.”

Partnership rules

Vasyl Khmelnytsky explains why he does not like to do business alone

In the mid-1990s, Vadym Hryvkovsky and I went to Lebanon. We found out that the price of reinforcement metal there at retail is four times higher than wholesale price in Ukraine. We rented land in Lebanon for storage purposes and sent a ship with a batch of metal from Ukraine. For three months they wouldn’t get customs clearance, and in the end we were issued a huge fine. It turned out that local businessmen, afraid of competition, had an under-the-table deal with the local port. Eventually, we sold them metal 40% cheaper than we had bought it in Ukraine. Then I realized that you have to enter a foreign market with a powerful local partner.

We love partnerships. The field expands, there are fewer risks, albeit lower profit. With partners, any problem can be solved more quickly: one has money, the other connections, and someone else ideas.

Talking with someone, I quickly see whether I can work with them as a partner or not. It is not necessary for them to think like me. Yitzhak Adizes once said a remarkable thing: “Respect is giving people the right to think differently.” The thing that should be the same is values. If we offer partners to invest in some area and they refuse, they do not have the right to enter it. You have to face risks together. If you want to remain idle and wait until it becomes successful, and only then join us, we do not like such an option.

Politics as a business

Very pragmatic MPs

Khmelnytsky and Ivanov both have vast experience in elected office. The former is almost a permanent member of the Verkhovna Rada since 1998. Ivanov was twice elected to the Kyiv Council. “Business should be separated from politics,” Khmelnytsky declares. But he adds that in Ukraine, this is far from reality. He does not deny that he needs a deputy badge to protect his business.

Khmelnytsky proved to be an astute spin doctor: in 1998 he managed to push through to the parliament an almost futile Green Party. “Vasyl asked me to engage in the promotion of this project,” Mykola Bagraev recalls the first time he met him. They immediately drafted a party logo, a sunflower. They called a music festival Tavriyski Ihry” a “green event,” and Scriabin band went on a “green” tour across Ukraine. The result was 5.43% of the votes for the Party.

Khmelnytsky did not show any political ambitions throughout the 15 years of him being an MP: he rarely attended sessions, and he did not submit any significant bills. He changes political affiliations depending on the current situation. Until 2004, he supported Kuchma, then he joined the Bloc of Yulia Tymoshenko, and in 2007 he became a member of the Party of Regions. “We always reckon with the authorities,” Khmelnytsky explains his inconstancy. “For Vasyl Ivanovych, politics is a burden,” Myrymsky said.

While Khmelnytsky protected his business in the Rada, Ivanov was solving issues in the capital city of Kyiv. In 2002, he went to the Kyiv Council as part of “Zhinky for Maybutnie” [Women for Future]. In 2006 elections, Ivanov decided to promote his project “Hromadsky Aktyv Kyeva” [Kyiv’s Civic Active]. Khmelnytsky did not believe in this idea. He bet his Jaguar against Ivanov’s Maserati, saying that the project would not go beyond 1.5%. And he lost. “Over the nine months, Ivanov spent $9 million on this project and received seven seats in the Kyiv Council,” says a city’s political technologist.

In the mayoral elections in 2006, it was Chernovetsky who secured the victory. To put it mildly, he was not a fan of KIG. According to Khmelnytsky, in three or four months they managed to find a common language with the new mayor: “He’s a businessman, so one can negotiate with him.” One of the arguments that helped them reach an agreement was the KCA deputies’ loyalty to Chernovetsky.

Forbes 

 

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