KIEV – On a street in ousted President Viktor Yanukovych’s political stronghold, Donetsk, stands the imposing headquarters of the Mako Group, a Ukrainian conglomerate spanning banking to construction.
The 20-story block is modern but designed in the style of the Stalin era and contains a hotel, restaurant, bank, and Mako’s unmarked offices — all, according to residents, belonging to Yanukovych’s eldest son, Oleksandr, 40. The business activities of the son, who trained as a dentist, have long been the object of scrutiny by critics of his father.
Two opposition research groups, PEPWatch and Anticorruption Action Centre, say on yanukovych.info, a website they jointly run, that Oleksandr Yanukovych’s assets have risen by 7,285 percent in three years. These were valued at $510 million by Forbes-Ukraine last year.
He is the owner of a major lender, the Ukrainian Bank of Development, according to central bank data, and the 100 percent owner of the private Mako Group, according to a spokesman for Mako.
With both companies involved in large gas, coal and property development projects across Ukraine, it is already clear that Oleksandr Yanukovych’s business will be at the center of inquiries by prosecutors into his family’s wealth.
At the core of such inquiries — and into other wealthy politicians close to the deposed president who were named in a Swiss asset-freezing order Friday — is whether they used their connections to divert public money into their businesses.
In the month before Yanukovych became president in 2010, his son’s bank had assets of 191 million hryvnia (then about $24 million) and was ranked in 157th place, according to central bank data; by January 2014, assets had risen to 6.5 billion hryvnia ($770 million), and it was ranked 32.
The chief executive of the bank is Valentyna Arbuzova, the mother of a former acting prime minister under Yanukovych, Serhiy Arbuzov, who was named on the Swiss government’s list of Ukrainians whose assets were being frozen.
Tetyana Chernovil, proposed head of a new Ukraine anti-corruption agency, told Reuters: “It is very difficult to divide the son and the father. If the father had a monopoly of the power in the country, his son was the monopolist in business.”
Chernovil said the Yanukovych family took a cut of almost all business in the country, even if assets were registered in the name of other associates. Her allegations, and those of other critics, could not be independently verified.
At a news conference in Russia on Friday, the deposed president denied he had any foreign bank accounts.
Oleksandr Yanukovych could not be reached for comment. But, responding to a question about Switzerland’s asset freeze, the Mako Group responded that, if affected by the measures, it would end its exports of coal from Ukraine to 23 countries. This would only cost the country foreign currency, it added.
Accounts of the firm were transparent and fully audited, and all appropriate taxes were paid in Switzerland, it claimed.
At his country home, in the outskirts of Donetsk, which is protected by a 3-meter concrete wall, there was no sign of Oleksandr Yanukovych. Neighbors said they had never seen him.
One elderly resident said: “When he arrives he comes in a car, and the police block the streets so we have never seen who is coming in.”
According to Chernovil, business activities under scrutiny in which the Yanukovych family and its allies are suspected of extracting a secret share included deals for import of gas into Ukraine from Russia, deals for oil and gas drilling rights in the Black Sea and inland, as well as coal mining contracts.
Also under scrutiny are the ownership and management of presidential estates, including Yanukovych’s palatial spread at Mezhyhirya outside Kiev, and a large office development, complete with heliport on the roof, built in front of the Ukrainian parliament.
Oleh Makhnytsky, the acting prosecutor general, said Wednesday the deposed president’s aides were stealing “not millions but billions” of dollars.
Some clues, according to Makhnytsky, might be found in the tens of thousands of documents discovered at the former residences of the president and his friends. At the Mezhyhirya estate, where luxuries from a private golf course and pet zoo to a fake Spanish galleon were discovered, journalists and activists have been scanning nearly 200 folders, each with about 500 pages. Many folders had been dumped in a lake on the grounds; some had to be recovered by divers.
According to Vlad Lavrov, one of the journalists involved, the documents came mostly from the management office on the estate of its owner, the firm Tantalit, in turn owned by Serhiy Klyuev, a businessman and member of parliament who was one of those whose foreign assets were frozen.
In an interview Thursday, Klyuev, who is the brother of Viktor Yanukovych’s chief of staff until last weekend, Andriy Klyuev, whose assets were also frozen by the Swiss, denounced the “dirty propaganda” against him and his sibling.
A further statement from Serhiy Klyuev on Friday rejected accusations that he was part of the so-called “Family” — a term used by the ousted president’s opponents for his inner circle.
“The Klyuevs are not a part and never have been” part of that circle, said the statement. “To put the false information straight he will ask the Swiss and Austrian authorities for him to give them testimony, which will demonstrate that there has been no wrongdoing by him and his family members.”