Three Latvians own a significant share of Ukrainian energy
Ukraine's State Bureau of Investigation has opened an investigation into VS Energy, a very large Ukrainian energy company controlled by members of the Russian criminal organization Luzhniki - Kremlin-allied Alexander Babakov, Yevgeny Giner and Mikhail Voyevodin, reports the influential Ukrainian online media Ekonomicheskaya Pravda, citing a statement by a prosecutor from the Prosecutor General of Ukraine, Roman Tulin, to Radio Svoboda.
VS Energy (but apparently officially called VS Energy International Ukraine) owns five electricity distribution companies which supply electricity to a significant part of Ukraine - Kherson, Zhytomyr, Kirovograd, Rivne and Chernivtsi oblasts.
The names of these electricity distribution companies are respectively “Khersonoblenergo”, “Zhytomyroblenergo”, “Kirovogradoblenergo”, “Rivneoblenergo”, “Chernivtsioblenergo”.
There are no Russians there, mostly Latvians...
In response to this information, a statement was published on the VS Energy International Ukraine website that the shareholders and management of the company categorically condemn the Russian aggression in Ukraine and that this position is confirmed by the support "to the Ukrainian Armed Forces in the amount of tens of millions of hryvnias".
But the main message of this publication is that VS Energy "has been owned by EU citizens for more than 8 years".
It is stated that the "ultimate beneficial owners" of the company are Latvian citizens Valts Vīgants, Vilis Dambiņš and Artūrs Altbergs,
and German nationals Oleg Sizerman and Marina Yaroslavskaya.
The company's website also states that "Yevgeny Giner ceased to be a shareholder of the Group, both legally and de facto, in 2014". As for Alexander Babakov and Mikhail Voyevodin, "they have never owned shares in VS Energy Group".
What does Latvijas Krājbanka have in common with the Russian army?
Of the persons mentioned here, not only Latvians Valts Vīgants and Vilis Dambiņš, the former owners of Lainbanka, are well known in Latvia but also Alexander Babakov, the Deputy Speaker of the Russian Duma.
Babakov became the subject of rumors in Latvia in 2001, when Macasyng Holding, a company registered in the Netherlands, acquired significant influence in Latvijas Krājbanka, which was then still partly owned by the Latvian state, and applied to become a strategic investor in the bank.
At the time, Latvijas Krājbanka management publicly claimed that Macasyng Holding's shareholders "are very serious Western European businessmen", which prompted Neatkarīgā to investigate these "serious businessmen".
It was revealed that Macasyng Holding had acquired control of the football club of the Russian Army Central Sports Club (CSKA). With the share purchase, Babakov, an ally of Vladimir Putin, became Chairman of the Board of Directors of CSKA Football Club, while the aforementioned Giner became President of the Football Club. The Russian Armed Forces still held a 26% stake in CSKA Football Club.
There was no doubt that only the biggest owner of the club or his trusted representative could become Chairman of the Board of Directors. There was also no doubt that some random "Western European businessman" could not become co-owner of the CSKA Football Club of Russia.
Despite these facts, the management of Latvijas Krājbanka continued to tell stories about the "respectable" "Western European businessmen" as potential strategic investors in Latvijas Krājbanka.
Energy and hotel business
Also more than 20 years ago, the press in various countries wrote that it was companies controlled by Babakov that were privatizing Ukrainian electricity distribution companies. Neatkarīgā discussed these publications in its columns.
Now the Ukrainian Ekonomicheskaya Pravda points out that the criminal organization Luzhniki also owns a "hotel business". But Neatkarīgā already in 2002 described two scandalous deals in which firms linked to Babakov invested 35 million dollars in two exclusive hotels in Ukraine.
In particular, two foreign companies deposited the 35 million dollars in Latvijas Krājbanka on the basis of trust agreements, while the Ukrainian hotels received the money as a "clean" loan from Latvijas Krājbanka.
At the time, Neatkarīgā suspected money laundering in such transactions, because - why was it necessary for Latvijas Krājbanka to mediate in receiving the money?
The trust agreements in question were signed by Arnolds Laksa as the president of Latvijas Krājbanka and Alexander Babakov as the president of two foreign companies.
Latvian law enforcement authorities pretended to investigate the transactions, but didn’t seem to find anything criminal.
I wonder how such transactions would be assessed today? It seems that, for a start, the 35 million dollars would be confiscated in a flash...
But the Ukrainian weekly Zerkalo Nedeli wrote in 2002 that it was Babakov, strangely impersonating a Slovak, who was "walking the corridors of power in Ukraine" in connection with the privatization of energy companies.
The Ukrainian newspaper was not hostile at the time, assuming that the rich Russian men posing as Slovaks would also do something good for the Ukrainian state: "The people who come to Ukraine are not nervous and they are notable. They are here with serious goals and for the long term. All the more so as their position in Moscow has weakened recently. But here it is possible to combine the pleasant with the useful - both to gain a new market and it won’t be bad for Russia. Ukraine will also gain something - the same renovated Oreanda and Premier Palace hotels."
Public watchdog receives investigations and courts instead of thanks
When Arnolds Laksa, who left the post of President of Latvijas Krājbanka, was elected to the 8th Saeima and in November 2002 became Chairman of the Saeima's Defense and Internal Affairs Committee and a member of the National Security Council, he had to submit a declaration of a public official. Then Neatkarīgā revealed that Laksa was millions in debt to Macasyng Holding, a co-owner of CSKA in Russia.
Who could have imagined that a member of Latvia's most secretive committee is millions in debt to a co-owner of the Russian CSKA? What are the security authorities doing? Is it really up to the newspaper Neatkarīgā to identify national security risks?
But in 2002, nobody thanked Neatkarīgā for the information it revealed. On the contrary, Laksa, as a high-ranking public official, went against the journalists of Neatkarīgā to the General Prosecutor's Office, demanding that criminal proceedings be initiated for defamation of a public official.
The investigation was carried out by Major Ints Ulmanis, Head of the Investigation Division of the Security Police. What was the result of the investigation? To his credit, the later Deputy Head of the State Security Service and Colonel Ulmanis withstood the political pressure (after all, the plaintiff was his "parliamentary boss" - head of the responsible committee, member of the National Security Council!) and did not initiate a criminal case. He only advised Laksa to turn to the civil court if he felt wronged in any way.
Laksa did so, and an extremely tedious trial began, lasting for many years, with a pointless outcome. The publisher of Neatkarīgā, SIA Mediju Nams, won the case and Laksa was forced to pay the court costs, while the publisher of Neatkarīgā, JSC Preses Nams, lost part of it - one sentence was found to be defamatory. There was no one left to appeal against this court decision, as JSC Preses Nams had already gone bankrupt.
Circle of confidants
Even though documents show that Alexander Babakov, Deputy Speaker of the Russian Duma and close to the Kremlin, is under investigation in the USA (see this article for details) and Ukraine, he still had and has quite an influential circle of confidants in Latvia.
The Latvians Vilis Dambiņš and Valts Vīgants, now mentioned in Ukraine as the "ultimate beneficial owners" of VS Energy, have at one time acted in Latvia in a fully official capacity as authorized representatives of Macasyng Holding.
Not only Arnolds Laksa, former President of Latvijas Krājbanka and member of the Latvian National Security Council, but also Gundars Stūris, member of the Board of Directors of Lattelekom, owed huge sums to Macasyng Holding.
Another member of the Board of Directors of Lattelekom - Viesturs Šutko (now deceased), advisor to Prime Minister Einars Repše on information technology issues - founded a joint venture with Babakov's company Jetfirm Limited (copies of the powers of attorney are available to Neatkarīgā, published here), which participated in the privatization of Ukrainian hotels, channeling money through Latvijas Krājbanka, then run by Arnolds Laksa and Vilis Dambiņš.
Huge wealth creates problems
It is now officially reported that three Latvian and two German citizens have become owners of five Ukrainian electricity distribution companies. This would seem to imply that three Latvians have managed to acquire huge wealth on Ukrainian soil. This has now also caused them enormous problems, not least because investigations have been launched into who actually owns this wealth. The electricity distribution networks are in a war zone and have definitely suffered - huge investments will have to be made to restore them.
Among other things, Ekonomicheskaya Pravda says that Marina Yaroslavskaya, the co-owner of VS Energy, who is listed as a German citizen, is the wife of Yevgeny Giner.
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