Group DF of oligarch Dmytro Firtash informed about the sale of its Crimean assets JSC «Ukrainian Chemical Products» (before 2014 it was named «Crimean Titanium») on the last day of 2021. The sale was conducted non-transparently, with clear signs of violating the legislation as the Antimonopoly Committee of Ukraine did not issue the permit for concentration. The seller did not address the Committee for the permit, perhaps, in order to avoid the disclosure of the ownership structure of the buyer – unknown LLC «Russian Titanium». This deal allowed Mr. Firtash withdrawing his Crimean titanium factory, the largest manufacturer of titanium dioxide in Eastern Europe, from the Ukrainian jurisdiction. Since then, the Center for Journalist Investigations has monitored all participants of the deal as we foresaw that its real beneficiaries would sooner or later reveal themselves. Our patience was rewarded. It seems that Crimean assets of Mr. Firtash are being absorbed by the giant Russian chemical holding, presumably, controlled by Rotenberg brothers, «best friends» of Mr. Putin…
To start with, let us recall how Crimean titanium factory of Mr. Firtash was taken from Ukrainian to Russian jurisdiction and who were key participants of this process.
The production of titanium dioxide and other related products at «Crimean Titanium» fully depended upon the supply of ilmenite ore from ore deposits in Zhytomyr region of Ukraine. It was processed at Ukrainian state owned Irshansk Mining and Processing Plant.
After Russian occupation of Crimea in 2014, the titanium factory did not stop its work. Ukrainian authorities secured the supply of the Ukrainian ore to the Firtash’s factory in occupied Armiansk through the so-called «ilmenite scheme». This dubious scheme also allowed for the functioning of Firtash’s business under Russian and Ukrainian jurisdictions simultaneously.
In Ukraine, the company changed its name from «Crimean Titanium» to «Ukrainian Chemical Products» and its legal address – from Crimean Armiansk to Kyiv. The factory itself was registered as Armiansk branch of the Ukrainian joint stock company.
100% of shares of the company were owned by OSTCHEM Germany GmbH whereas Dmytro Firtash has been its final beneficiary.
In Russia (Moscow), LLC «Titanium Investments» (Titanovye investitsii) was registered. Cyprus-based «Letan Investments Limited» company was indicated as the founder of Moscow company. The Cypriot company was registered by Firtash’s manager. At the very beginning «Ukrainian Chemical Products» declared that it rented its Crimean factory to Russian «Titanium Investments». However, later the factory was registered in the Russian business register as the «Armiansk branch» of this Moscow clone of the Ukrainian company.
In order to avoid Western «Crimean sanctions» banning sea supply of the ore to Crimea and Crimean export, Mr. Firtash used Ukrainian law about fake free economic zone «Crimea».
Last summer this law was cancelled whereas the National Security and Defense Council of Ukraine imposed sanctions on Mr. Firtash and his company «Valky-Ilmenite». As an outcome, the supply of the ilmenite ore was stopped and the Crimean factory did not work for two months. The production was renewed on September 1, 2021 but in a half a year the factory was closed one more time.
Mysterious «Russian Titanium»
Group DF of Dmytro Firtash announced the sale of Crimean assets of «Ukrainian Chemical Products» on December 31, 2021. All movable and immovable assets of the former factory «Crimean Titanium» were sold to the Russian buyer – limited liability company «Russian Titanium» (Russkii titan).
In Russia, there are several companies with such a name. Group DF did not specify the company and delivered different information to Russian and Ukrainian mass media. It ignored our information request.
The Center for Journalist Investigations (CJI) studied all Russian companies with the name «Russian Titanium». None of them seemed to be capable to buy Crimean factory – the largest manufacturer of titanium dioxide in Eastern Europe. Fortunately, co-owner of «Russian Titanium» in Petrozavodsk whom CJI contacted by phone advised us to look into «Russian Titanium» in Barnaul.
Barnaul company seemed to be typical shell company. Its statutory capital equaled 10 thousand Rubles; it had the status of micro-enterprise and did not have any employees; no website and no office phone. It has been registered in the apartment of the old five-floor building.
Building in Barnaul where limited liability company «Russian Titanium» registered – the buyer of Firtash’s titanium factory in Crimea. Photo: google.com.ua/maps
LLC «Russian Titanium» changed its founder on November 30, 2021, i.e. one month before Group DF announced the sale of its Crimean assets. Igor Bulatov, 29 years old entrepreneur, was registered as the new founder. Before he built cottages in Barnaul suburbs.
Thus, this company did not have any relations to titanium production and was not capable to buy Crimean assets of «Ukrainian Chemical Products» (its assets were evaluated as worth of 6 billion UAH in 2020). Therefore, the sale of the titanium factory had clear signs of the fake deal whereas the buyer looked like shell company.
The Center for Journalist Investigations also found out that the Antimonopoly Committee of Ukraine did not issue the permit for the sale of Crimean assets (permit for the concentration)
Agia Zagrebelska, the founder of Antitrust League, believes that «Ukrainian Chemical Products» did not ask the Antimonopoly Committee for permit because the company did not want to disclose the real buyer of the titanium factory.
«It is not known who acquired the assets. We see shell companies with symbolic statutory capital. Anybody can hide behind them, including Mr. Firtash. If they would address the Committee, they would have to disclose the ownership structure of buyer. Then, the Committee would have the opportunity to investigate who was the real buyer hiding behind this company», as Agia Zagrebelska commented this situation.
The Antimonopoly Committee of Ukraine launched investigation of the sale of Crimean assets of «Ukrainian Chemical Products» without the Committee’s permit for concentration on January 20, 2022, i.e. after one week of the publication of CJI’s investigation results. So far, information about the Committee’s decision has not been published.
It is worth highlighting key decisions the government and its bodies should have taken in order to prevent Firtash’s withdrawal of titanium production from the Ukrainian jurisdiction.
First of all, the National Security and Defense Council of Ukraine imposed individual sanctions on Mr. Firtash, as it has been mentioned above. All his assets must have been frozen. However, the government did not block them.
Second, all Crimean assets of «Ukrainian Chemical Products» were on loan as collateral. It means Mr. Firtash could not «sell» them, only to pay for debts.
It should be also noted that the company of Mr. Firtash has been debtor of the Pension Fund of Ukraine. The court decision to recover 20 million UAH from his company is still valid. However, Ukrainian authorities «forgot» about this decision.
Third, Group DF and «Russian Titanium» did not receive the permit of the Antimonopoly Committee of Ukraine for concentration, and the Committee initiated investigation of this case after our publications. More to that, CJI and the Antitrust League asked the Antimonopoly Committee to conduct investigation of the implementation of antitrust legislation in this case. We did not receive yet neither the decision, nor response from the Antimonopoly Committee. We will keep reminding the Committee about the situation.
Meanwhile, the ownership structure of Barnaul «Russian Titanium» was changed on February 11, 2022. Igor Bulatov is no longer the founder of «Russian Titanium»; he is the director of this shell company operating as the intermediary to remove Crimean titanium factory from the Ukrainian jurisdiction.
New founders are Russian limited liability companies «Titanium Investments» and «Titanium Technologies» (Titanovye tekhnologii). They are linked to Mr. Firtash. In their turn, they are founded by Cypriote companies Letan Investments Limited and Pegma Ventures Limited. They share two directors – Aleksei Obidin and Oleg Panasuk.
We did not make a mistake: company «Titanium Investments» became the founder of «Russian Titanium»! Though the buyer of Firtash’s factory in Armiansk (registered as the branch of «Titanium Investments») is «Russian Titanium» as it was described above. Below we explain the strange logic of these events.
«Russian Hydrogen» will unite all
Crimean occupation authorities organized massive «landing» of Russian journalists and public officials on titanium factory in Armiansk in the middle of May 2022. There was almost solemn reason – the factory resumed its work after 4 months downtime caused by the absence of ilmenite ore and full scale Russian invasion into Ukraine (Armiansk is close to the front line). For the first time, real Russian managers and owners of the factory were announced.
«Owners changed. New owners are Russian owners. The managing company is «Russian Hydrogen» (Russkii vodorod), as Eduard Kurmachov, the director of Armiansk titanium factory, told journalists.
We know about joint stock company «Russian Hydrogen» from our previous investigation. It has been the holder of loan collaterals of Crimean assets of «Ukrainian Chemical Products» (the indebtedness reached 94 million USD at the moment of sale). Thus, hypothetically, «Russian Hydrogen» could get the factory and other Firtash’s assets in northern Crimea as the recovery of loan.
It is remarkable that «Russian Hydrogen» was registered less than one year ago, in February 2021. Its shareholders are not disclosed. Its only founder is Stanislav Tikhonov. Though he is the member of several Russian companies and supervisory boards, he does not have large capital. On the other hand, «Russian Hydrogen» is quite active in creating chemical holding by getting companies with large market shares under its management.
Recently «Russian Hydrogen» received under its management Firtash’s titanium and soda plants in Crimea as well as LLC «Titanium Trading Company» and «Titanactiv» related to the titanium production.
However, «Russian Hydrogen» is not reported as the key investor into Armiansk titanium factory. Russian joint stock company «Bashkir Soda Company» promised to invest 20 billion Rubles into its modernization. Then, how this Bashkir company is linked with the Crimean titanium factory?
In accordance with Russian open databases, one person links together «Russian Hydrogen», the managing company of Firtash’s Crimean chemical assets, and «Bashkir Soda». It is Eduard Davidov.
Eduard Davidov, Photo: soda.ru
He is the general director of private «Russian Hydrogen», state owned «Bashkir Soda Company» and a couple of other soda factories at the same time. Not a long time ago the controlling stake of «Bashkir Soda» was owned by private entities. It was returned to the state ownership by … Mr. Putin! He accused private owners that they re-invest a little into the production.
«Where is the money?» He asked at the governmental meeting. As an outcome, the Russian General Persecutor’s Office launched inspection of privatized company, then, the Russian court adopted necessary decision and shares were returned into governmental ownership. They were divided between the federal center and Republic of Bashkiria. It seems it is not their final destination point.
In April 2022, Eduard Davidov as the general director of «Bashkir Soda Company» wrote the letter to Mr. Putin and asked him to transfer 57% of company’s shares into trusted management of «Russian Hydrogen» where he is also the general director. These shares are not just «papers». It is about transfer of 18 large chemical plants in seven subjects of the Russian Federation under the management of private company «Russian Hydrogen»!
It is understandable that such «public letters» are submitted in Russia only if they are approved beforehand, behind Kremlin curtain. Then, who is the final beneficiary of the future giant chemical holding, which swallowed Crimean chemical plants of Mr. Firtash?
Russian media «Kommersant» states that Rotenberg brothers, best friends of Mr. Putin, are hiding behind Kremlin curtains.
In accordance with its sources, Stanislav Tikhonov is the nominal owner of the business. The company is developed by Rotenberg brothers who have an experience in chemical industry. Though, the official representative of Arkadii Rotenberg did not confirm the connection with «Russian Hydrogen» as noted by «Kommersant».
It might be that there are no de jure connections between Rotenberg brothers and the sale of Crimean assets of «Ukrainian Chemical Products» of Ukrainian oligarch Dmytro Firtash. But they are de facto interlinked…
