"United Mining and Chemical Company" | News | Cyprus-based offshore company owned by Kuchuk to wash out the money from the state-owned UMCC
Cyprus-based offshore company owned by Kuchuk to wash out the money from the state-owned UMCC
26.06.2020The new UMCC board persistently continues to trade with the companies owned by Dnipropetrovsk businessman Vitaliy Kuchuk despite the hype in the media regarding these contracts being unbeneficial for the state-owned company and being a subject of corrupt pre-arranged deal.
This time, the money from the sale of UMCC products will be transferred to another one of Kuchuk’s middlemen – Minerals & Chemicals Distribution (MCD Ltd), registered and headquartered in Nicosia, Cyprus. JSC UMCC signed a fresh contract with the company and is already shipping premium products pursuant to the contract – rutile and zircon.
The contract was signed June 19, 2020 between Peter Davis, Acting CEO of UMCC, and Volobuyeva L., MCD representative. The sum of the contract is EUR 2.9 million, the shipments are small: 900 t of zircon and 1,500 t of rutile. The contract is short-term, only until September this year.
The market players are confident that the products will be supplied to processing companies in Russia – they are the only ones that consume small volumes of the titanium raw materials. Other market players purchase large shipments, using long-term contracts. To avoid any claims against Peter Davis regarding him allegedly working with the aggressor, the products will be ‘moved through’ Cyprus. This is not a new scheme.
Cyprus banks – Bank Cyprus Public Company Ltd, and also Societe Generale Bank Cyprus, which also services another Kuchuk’s offshore company, will be processing the transaction that will wash out government funds from UMCC. Yet another short-term contract may indicate that Peter Davis is in a hurry to earn a pretty penny together with Kuchuk before the privatization of JSC UMMC, which was expected to take place in July this year, but was postponed due to coronavirus.
MCD is the creation of Dnipropetrovsk businessman Vitaliy Kuchuk of the Kuchuk-Vizgalov group from the 1990s. This gang “pushed” the products of Vilnohirsk Mining and Metallurgical Plant (now a subsidiary of UMCC) to Russia even before the plant was leased to Dmytro Firtash’s Crimea TITAN in 2014. The businessman then spectacularly threw out the intermediaries from the sale of the plant’s products.
At the time, supplies of VMMP products to Russia greatly helped Kuchuk-Vizgalov rise, as they were washing out up to 30-40% of profit from the state-owned plant on those contracts. The time has passed, but the memory of the profitable corrupt deals is still fresh… That’s why with the appearance of Peter Davis at UMCC, the businessmen fell back into their old habits.
It was easy to build the schemes with UMCC. MCD is a typical offshore trading company, concealing the sales of metallurgical and chemical raw materials between Ukraine and Russia. This can be seen in the structure of the company, which has traces of the Russian business.
According to media, Kuchuk-Vizgalov also traded up in the kaolin business through Yumin Ltd. https://www.dsnews.ua/economics/rossiyane-zastryali-v-ukrainskoy-gline-10032016122100. After this, it would be simply redundant to explain how closely linked the businessmen are to Russia.
What should have alarmed Peter Davis before he put his signature under the contract with MCD, while he almost daily reported that his contracts would only be with end consumers and at market prices from now on? The company does not have production facilities that would process rutile and zircon, which is why to consider the transaction with MCD a victory is like rejoicing that the gypsies robbed you. Getting involved in the schemes with Kuchuk, Peter Davis can boast two “victories” at once – washing out floating capital from UMCC and supplying titanium to Rosoboronprom.
The anti-government contract with MCD is not the first or the last “fast earning” corrupt scheme of the British citizen Peter Davis, who allegedly “defeated” corruption at UMCC. MCD is the second middleman of Kuchuk, whom the Englishman is allowing to bankrupt the state-owned company to the benefit of Russia. In the beginning of June, at the suggestion of Peter’s deputy for commercial issues Tetiana Gogenko, the second protégé of Russians at UMCC, the company signed a contract with Keramplus LTD, the daughter of MCD. The contract was signed personally by the owner and director Vitaliy Kuchuk. The sum of the transaction reached around UAH 200 million. https://delo.ua/business/oghk-zakljuchilo-dogovora-na-prodazhu-syrja-s-ke-369586/. The kickback in favor of the middleman ranged from 5% to 30% for different products in prices lower than the market. If this continues, Vitaliy Kuchuk and Dmytro Vizgalov will really strike it rich on the sales from UMCC. And, it seems, he and his partner were preparing for that.
Having received the contract for selling UMCC products via Keramplus, Kuchuk-Vizgalov bankrupted their Tsvetniye Metally LLC in Ukraine in the beginning of June, and entirely shut down their second company – Enterprise Tsvetmet LLC. How can one explain that? Clearly, plundering of UMCC through transferring the products to Russian processing companies is a profitable business, which is why they no longer need their unprofitable business in Ukraine.
Now comes the question to curators of Peter Davis at the State Property Fund – SPF Chief Dmytro Sennychenko and his deputy for corporate issues Serhiy Ihnatovskiy, who put the British citizen into the seat of the acting CEO of UMCC as a result of a simple two-move combination removing the previous head of UMCC Mykhailo Makarov: the sale of UMCC products through Cypriot and Ukrainian middlemen of Kuchuk to Russians – is that the result you expected from the British citizen? If not – it is high time to throw him out of UMCC before it turns from a profitable to unprofitable company. If yes – then you are getting a cut!