Did Khudainatov Send his Coal for Laundering?

Did Khudainatov Send his Coal for Laundering?

Photo: http://www.moscow-post.su

Can coal be laundered through the self-proclaimed Lugansk People's Republic (LPR) to Ukraine? What does it have to do with Eduard Khudainatov's Coalstar? In May 2020, Eduard Khudainatov's company was fined for supplying 5,000 tonnes of coal to Ukraine instead of Slovakia which had been designated in the customs declaration.

Coalstar tried to challenge the fine in court, but lost both the case and the appeal. It was the first violation of the restrictions on Russian coal supplies to Ukraine.

A Moscow Post correspondent studied Khudainatov's delivery route and found out that the anthracite might have ended up in Ukraine by no coincidence. Businessmen connected with the LPR, Ukrainian oligarchs and influential officials who have been "pumping" coal in the Lugansk region for years could be behind Coalstar partners. Massive amounts of "illegal" coal spread out from there around the world.

Nowadays, shipments to Ukraine are only possible with the permission of the Ministry of Economy. It was never granted to Coalstar. As a result of the restrictions on exports of Russian coal to Kiev, most of the major market players slashed supplies or stopped them altogether. In part, Ukraine continued to get the above-the-law coal from Russia through Belarus. As for Eduard Khudainatov, he had declared the delivery of coal to Slovakia, but it finally landed in Ukraine.

The court files that address the dispute between Coalstar and the Central Energy Customs, said that Khudainatov's company had been fined 50,000 rubles ($681) in May 2020 for supplying coal without the permission of the Russian government.

Coalstar challenged the fine in court. A court of appeal upheld the ruling. Why would such a big company as Coalstar worry about the insignificant 50,000-ruble sum? Apparently, company image is far more important. The coal supply route suggests that the damage to Coalstar’s reputation might be irreparable.

The coal was shipped under a contract between Coalstar and Incom Trade. The documents designated Slovakia as the terminal point.

It follows from the documentation that Coalstar filed a new declaration after the coal left the territory of Russia, making PKF Nextrade, a Kiev-based firm, the importer and Ukraine the country of destination.

The shipping lists and the Incom Trade letter which the court refers to explain that the company could not accept the coal at the Vojany railway station in Slovakia, because the final recipient, namely, the Slovak power plants, had rejected it. So, the coal, after crossing the Ukrainian border, was sent to the Kozhushko station of Donetsk Railways.

The question is whether the coal was originally meant for Slovakia. There is a native of Lugansk region among the owners of Incom Trade, with whom Khudainatov's company had signed the contract. According to an extract from BUSINESS REGISTER of the Republic of Slovakia, Incom Trade is headed by a Grigory Gorbunov from the town of Rovenki.

Let's take a look at PKF Nekstrade, where Khudainatov's coal was delivered. Tatyana Svistilnik is listed as a founder of the company. In addition to PKF Nekstrade, she also runs TANDEM TORG PK whose founder is a certain Vladimir Chepurko, also a native of Rovenki.

At this point, one important clarification should be made. Rovenki, an inconspicuous spot on the map, is one of the strategically important locations for coal mining.

As fighting broke out in eastern Ukraine in 2014, most of the coal mining areas came under people’s militia control. However, the extraction and export of anthracite continued even during active hostilities.

The self-proclaimed republics are based on material and financial support from the Russian Federation. In 2017, the Donetsk and Lugansk People's Republics announced that they had begun supplying anthracite to Russia. It was the only possible destination for fuel exports as Ukrainian radicals had begun the rail blockade of the breakaway region.

However, it is obvious that buying coal from Ukraine's breakaway areas under the threat of sanctions poses risks to Russian companies.

The Insider bluntly wrote that Russia would only legalize this coal to export it to other countries, including Ukraine and the EU.

Raiding “Trades”

Grigory Gorbunov's namesake from the Slovak firm Incom Trade got the Ukrainian media attention. A man with the same name had reportedly owned a coal mine until it was seized by militants.

"LPR terrorists seized the coal mine belonging to partners of the deputy chairman of the Ukrgazdobycha Board," the Nashi Dengi monthly said. The report tells about Tandem Torg TPK in Alchevsk, Lugansk region. It is registered to Rovenki-Vuglepostach, founded by Sergei Melnichuk. Grigory Gorbachev is listed as its CEO.

That the man in question is Gorbachev from Incom Trade is indirectly confirmed by the fact that his sector, region and business connections are completely the same and linked to Rovenki in the Lugansk region.

According to the Ukrainian media, Sergei Melnichuk is the owner of Rovenki-Uglepostach registered in Kiev. Until March 2017, this firm had been the largest legal exporter of grade anthracite mined in Donbass. The company bought coal from Rinat Akhmetov's DTEK holding. Due to the Donbass blockade, Rovenki-Uglepostach stopped its exports. Did it though?

Sergei Melnychuk has a brother, Alexander, known as an ex-member of the Rovenki City Council and CEO of the Rovenky Petroleum Tank Farm. It stocked the fuel supplied by the firms of fugitive Sergei Kurchenko, a Yanukovich era oligarch nicknamed “the coal king of Donbass.” Melnichuk is also a former adviser and deputy minister of the LPR coal industry.

Melnichuk owns a 10 percent stake in the Crimean Fuel Energy Company in Simferopol, founded in September 2014. This organization holds more than 300 mln rubles ($4.09 mln) worth of government contracts in its order porfolio. Sergei Ogurtsov, a former deputy from Oleg Tsarev’s Party of Regions, is the majority owner of this company through YUG-Scan, a company based in the Dnepropetrovsk region.

In addition, the Rostov-based Southern Fuel Energy Company belongs to Melnichuk. It supplies engine oils, fittings and other products to Donbass. In Ukraine, he owns a stake in the Darievskaya mining and processing mill in Kiev.

From Rovenki around the world

Just one mine in the town of Rovenki takes us to an entire coal empire controlled by the Melnichuks and partners. Former Deputy Minister of Coal Industry of Ukraine Yury Zyukov is mentioned along with these entrepreneurs.

“Melnichuk's petroleum tank farm has always been in Rovenki,” Novaya Gazeta wrote. “He is a protégé of Zyukov, the former Deputy Minister of Coal Industry of Ukraine under Yanukovych. Recently, they have tried to bring him back to his former post, but some lawmakers objected: “how can we trust a person who is an advisor to the Minister of Coal Industry of the LPR?” Zyukov denied it, but the hard fact is that he has a luxurious house in Rovenki’s Bedniatsky hamlet.

In the 1990s, Zyukov headed the Cosmonauts mine in Rovenki. In 2002, when Viktor Yanukovych became prime minister, Zyukov was appointed director of the state-owned Rovenkianthracite. According to Novaya Gazeta, it was already clear that mines were much less profitable than illegal open-pit or underground coal mines.

It was Zyukov who took the mines under his control in Rovenki making them taxable. He claimed that he shared the revenue with law enforcement officials for the “protection” they provided.

After several years in civil service, he began to work for Rovenkiantratsyt again. He became a suspect in a criminal case, but in 2014, Zyukov got back the post of Ukraine’s Deputy Minister of Energy and Coal Industry. He immediately made every effort to regain control of the mines.

Yury Zyukov, Former Deputy Minister of the Coal Industry of Ukraine, finds a “gold mine”

This is where Alexander Melnichuk cut in. They say Melnichuk met with the former LPR leader Igor Plotnitsky “to make an offer that suited him.” He designed a plan to move coal from rathole mines to Ukraine. The coal from these mines was allegedly delivered to Russia as well, by enterprises like Luganskugol.

In other words, the scheme to illegally supply coal might have been tested out years ago.

In early October 2017, the Polish media wrote that Donbass anthracite was entering Poland semi-legally on Russian documents. At that time, the supplies came through Belarus. The shipments from the "republics" were reportedly handled by Doncoaltrade, a company registered in the Polish city of Katowice. Alexander Melnichuk was Doncoaltrade president and owner. On January 26, 2018, the U.S. Treasury Department extended the sanctions against Russia due to the situation in Ukraine. Doncoaltrade was blacklisted, along with Alexei Melnichuk and his brother Sergei.

However the brothers had time to get ready for these measures in advance. Two days before the publication of the expanded sanctions list, Alexander Melnichuk withdrew from the list of founders of Ugolnye Tekhnologii, registered in Rostov-on-Don, a city in southern Russia. The company was one of the largest suppliers of coal from Donbass areas. It is known that Ugolnye Tekhnologii also takes Donbass anthracite to export it to Poland and Turkey.

Now, Vyacheslav Druchenko and Valery Donskov, Melnichuk's two former partners, are still in charge of the asset. By the way, they also ran the Invest Trade firm, a wholesale fuel trader registered in the Rostov region. The company has zero financial indicators. The information on the address and its CEO is unreliable, and there is only one employee on the staff, according to the documents. Invest Trade looks like an ordinary shell company.

Many organizations run by these businessmen are registered in the Rostov region. The fact is that it is through this area that coal enters Russia from the self-proclaimed republics. Uspenka and Gukovo are usually the starting points. It is in Gukovo that Donskov and Dryuchenko's shell company is registered.

The Insider sources close to the “DPR” recalled how this scheme worked before:

"All shipments were done by a subsidiary of Russian Railways. The trains terminated at the Uspenskaya station in the Rostov region, according to official reports. In actual fact, our locomotives pulled them across the border at night. As far as I know, no papers are signed on the way out of the republics. Everything hinges on word-of-mouth contracts."

Incidentally, Ugolnye Tekhnologii, when run by Melnichuk, had a government contract with Russian Railways Logistics.

Sergei Melnichuk has other suspicious partners. Together with the above-mentioned Grigory Gorbachev and Vadim Shlenchak, deputy chairman of the Ukrgazdobycha board, he was listed as a co-founder of Agroplus, a coal mining company. This firm is known as the owner of the Kosharskaya mine, which is also controlled by the militants.

Earlier, Shlenchak was suspected of participating in a criminal organization controlled by Aleksander Onyshchenko, who fled Ukraine after the parliament stripped him of immunity. Shlenchak supposedly aided and abetted embezzlement and helped design gas sale schemes under the contracts between Ukrgazdobycha and companies controlled by Onishchenko. The losses inflicted by his scheme were estimated at over 740 mln hryvnas, according to RIA Novosti Ukraina.

Shlenchak is also a protégé of Igor Yeremeyev, another prominent entrepreneur and politician from the Volyn region and a deputy of the Verkhovna Rada. In 2014, Ukrgazvydobuvannya sold 30,000 tonnes of liquefied gas to Igor Yeremeyev's company Vog Trading at 7,602 hryvnias per 1,000 cubic meters. At the moment, other market players were selling the fuel at 11,102 hryvnas. The deal was a measure of Shlenchak's loyalty to Yeremeyev. Later on, law enforcers would say that during this period alone, the state fell short of 36 mln hryvnas, the Ukrainian Independent Information Agency of News wrote.

Yeremeyev died in an accident in August 2015. He was considered a business partner of the entrepreneur Sergei Kurchenko. Rumor has it Sergei Nazarov, Russia’s Deputy Minister of Economic Development, supervised Kurchenko's operations with Donbass coal. Nazarov held senior positions in the Rostov region for a long time. He had started his career in the above-mentioned town of Gukovo.

Moreover, according to unverified information, Nazarov's son Artem became the official representative of NT Marine, an Estonian company engaged in the trade of petroleum products and other fuels including coal. The firm’s turnover amounts to billions of rubles. It is owned by the Belarusian billionaire Nikolai Vorobey.

Mikhail Volynets, chairman of the Independent Trade Union of Miners of Ukraine and the Confederation of Free Trade Unions of Ukraine, told RBC that Russian Railways mainly fulfilled the coal shipment requests of the very same NT Marine AS. Vorobey allegedly maintains friendship with Ukrainian politician Viktor Medvedchuk. The latter is now a suspect in the case over high treason and attempted plunder of national resources in Crimea. According to investigators, Medvedchuk colluded with a Russian government official in 2015 to extract minerals from the Black Sea shelf. Medvedchuk was also charged with passing sensitive information to Russian Intelligence in 2020.

Silent mines

The situation looks even more unpleasant given the fact that coal miners become pawns in this large-scale coal fool game. Last year, Novaya Gazeta wrote about LPR miners who complained about the wage debt. For example, the monthly payroll at the Komsomolskaya mine is about 50 mln rubles ($681,000.), according to the Independent Trade Union of Miners of Donbass.

While there are banners on the streets of the unrecognized republics glorifying the valiant services of the local miners, they live below the poverty line.

A billboard in Donetsk downtown / Photo credit: Tomasz Fiorro

The Melnichuks' coal business, under the patronage of influential businessmen and politicians, seems to be flourishing. Grigory Gorbachev from Incom Trade, whom Eduard Khudainatov partnered so effectively, supposedly helps him run this business.

Back to the Coalstar story and those ill-fated 5 tonnes of anthracite that accidentally arrived at the Donetsk railway station. Of course, Khudainatov, a longtime acquaintance of Rosneft state corporation CEO Igor Sechin, was wary of his exposure in an international scandal over illegal coal deliveries to Ukraine and resultant wrath of the top tier authorities.

In light of the story, the desperate and futile attempts of Khudaynatov's company to defend its position in court are understandable. Most likely, it is the desire to justify themselves in the face of the Russian authorities that regularly allocate money to support the self-proclaimed republics. Those funds might be merely kept in the pockets of local oligarchs who have built a large illegal empire. It operates in circumvention of Russian law which, incidentally, provides ample opportunities for cooperation.

If the fact is proven, the authorities will hardly ignore the assistance of Russian businessmen in legalizing the mined coal for further exports.

Original article: http://www.moscow-post.su/economics/ugol_hudajnatova_zaehal_ne_tuda35788/

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