12 June 2015

Dmitry Firtash interview with ‘Glavcom’ online edition



Dmitry Vasilievich, over a month has passed since the Vienna court decision denying your extradition to the US. Is it easy for you to control the situation at your businesses? So far it seems that the odds are not in your favor. The government is fighting against you. What is the reason for it, to your mind?


What is happening is absolutely clear – there is political struggle and it is evident what Narodny Front and the Prime Minister are doing. Why? I do not know. They should be asked why they are fighting.


But what do you think?


Frankly speaking, I do not have the answer. If they want to fight, let them fight.


As a strategist, what do you think the outcome will be?


We will succeed.


What does it mean for you to win this battle? What interests are at stake? That the PM’s job is supposedly on the line.


I am definitely not going to be Prime Minister. That has nothing to do with me. I don’t have to be elected, I don’t have to say what voters want to hear, I don’t have to choose my words carefully and think about what is best for my political campaign.

My interest is in Ukraine and that’s a fact. That is the place where my mother and my children live, that is the country my life is connected to. I am not prepared to put my name to the negligence and helplessness of this government. They remind me of the saying “neither lead, nor perform”. These people belong to this category. They are not capable of being either leaders or even performers. It seems they are deficient by nature.


At the beginning of this week you actually declared war against the government. How are you going to wage this war?


We, the Federation of Employers of Ukraine, have agreed with the Unions and united all our efforts. We are setting up our alternative program, we will persuade the government to accept it. In other words, we, as the Federation, demand that they take specific actions.


Which business leaders have supported you in this battle?


The Federation of Employers (FRU) accounts for 70% of the country’s GDP. It essentially includes all large businesses. Their representatives are in the Federation: including steel, chemical and other industries.


However, Yatseniuk’s opinion differs. He blamed you for the privatization of the FRU. The PM made it clear that in this war you are the sole opponent.


This is completely false. He wanted to present it this way to journalists, but he stayed quiet on other facts. Under this government in the past year unemployment in Ukraine has risen by one million people. In manufacturing alone we lost 600,000 jobs. Today 2.5 million people are unemployed. Every incoming government says they will create certain jobs, but this one led to 1 million people unemployed. How long do we have to wait, how many people have to be made redundant for the government to start working on the economy: 3 million?


There currently are attempts to deprive you of business. The rental agreement for titanium deposits has not been extended, gas distribution networks were alienated, and a lien was put on 46 facilities. What action have you taken? Who is protecting your rights in Ukraine?


We do have lawyers and we are going to defend ourselves using all available means.


Avakov claims that the Ministry of the Interior has new facts that support the conspiracy of the former management of Naftogas and the owners of RosUkrEnergo and Group DF. It is alleged that your managers agreed with the management of the public company, thanks to which the Stockholm Arbitration Court ordered NAK to return 12.1 billion cubic meters of gas to RosUkrEnergo. What do you know about these new facts?


There aren’t any new or old facts. I think this is pure PR carried out by Narodny Front without a shred of evidence. In other words, they first create a PR wave, and then start thinking about how to initiate criminal proceedings. In reality, there are no criminal proceedings.


You haven’t been notified of any?


No, I have not. I haven’t received any summons or any other document yet.


What was the impact of the non-extension of the rent for the mining and processing plants on your Crimean titanium business operations?


It had no impact. We have sufficient materials as we ensured adequate supplies. However, the state is suffering as a result of this incident. On the one hand, it was widely announced that these enterprises were going to be transferred to the state and it seemed as if a public company would be set up, but in fact, specific people are responsible for all these. If we look at what was the situation under our rule and what is happening today, how they survived the year due to the fact that we invested money there, it will emerge that they are going to shut down because nobody is investing now. The money is being tricked out.


In his interview to Glavcom, Kolomoisky’s associate Gennady Korban stated that people’s deputy Nikolay Martynenko is currently using the mining and processing plants on behalf of the state. What do you know about this?


Well, if he said so, it means that he knows what he’s talking about.

We invested in and improved these enterprises, and when they came, it seemed to them that it was just a juicy opportunity, and nothing had to be invested, just mine and take, mine and take. Anyway, this mine and take comes to an end, and now the mining volumes have halved the production. They cannot mine the volume that we used to mine any more. I would say that in a couple of months, or by the end of the year, they will have to stop unless they invest now, but so far they aren’t doing anything of the kind.


Did any representatives from the authorities come to an agreement with you at the initial stage? For example, to share assets? Are you expecting nationalization, which you are repeatedly being threatened with?


First of all, I did not take anything from the state, I bought on the secondary market. How are they going to nationalize these facilities, can you explain that one? They can say whatever they want. But then they can come to your apartment and nationalize it and seize your car under the same “slogan”.


You know Yatseniuk declared that if Firtash does not repay the debts to Naftogas, we will take his Cherkassy Azot and Rivneazot.


Firstly, I am not Yatseniuk. Unfortunately, I cannot make such announcements like he does and then not live up to them afterwards. He can say that if he is to get a bullet between the eyes, let it be so, and make everybody laugh. Next he called his team the government of kamikazes, and so on. I cannot afford to say such things. Not because I am smarter and craftier. It is just because I think before I speak.

Secondly, he talks about debts. Well, let’s count these debts: how much do you owe me? We have not claimed any money from you. Moreover, the debts were made before me.


What amount are we talking about?


These plants were not yet my property at the time they had contractual relations (with Naftogas – Glavcom). Generally, what can we say today? There is a contract between Naftogas and the enterprises. Each plant is a legal entity with its own liability. Then they entered into a contract and bought gas. It’s true that they either did not pay for it or only partially paid for it.


How much?

2 billion hryvnias. They accrued interest, penalties, fines, everything. They took legal action and won, but the plants protest since they consider the decisions to be unfair. This is a normal legal position. Anyway this is not a criminal matter. We are speaking about a business contract with clear terms and conditions: these rates of penalties or fines. Everybody understands it. Therefore, it is quite a normal process. They (the Ukrainian authorities – Glavcom) seized more gas (which Firtash considers to be his – Glavcom) than this debt. Much more, I should say. In other words, any further talk of the seizure of production floors and plants is just that – talk. They are hollow threats.


Have you spoken to Yatseniuk about this?


No, I have not spoken to him.


Do you think this is the agreed position of the President and the Prime Minister?


I do not know.


How do you explain these events to yourself?


I consider it to be pure political pressure. I have repeatedly stated that this government… Just imagine, the Prime Minister has arrived in America and he says the following… (During the latest visit to the USA the Ukrainian PM declared: “We are convinced that this Ukrainian oligarch must be held liable in the USA” - Glavcom) What he says is incredible. But for me, personally, it is nonsense. Even if he does not like me or is scared of me, he is the Prime Minister of the country. How can he declare anything of the kind? If he is so brave, then let him settle the matter at home, why should he do it in Washington? I will deal with Washington by myself, without his participation.


Can you name the amount of Group DF losses last year?


Our losses were due to three reasons. The first one was related to the loss of the Crimea, the second was the war in the east, and the third was the economic crisis. Actually, there is the fourth reason as well – mediocre government. And, certainly, our losses were rather significant.


Can you say the figures?


Sure. In 2014 we lost 1.5 billion dollars.


If it’s all so unprofitable, have you not had any intentions of getting rid of this business?


Can I ask a question: who will buy this business now? Tell me.


I think this is more a question for the Government and the President who are confidently speaking about selling out the remnants of state property.


Allow me ask another question. When the state and the Government represented by the Minister of Finance has been preparing society at large for the potential default of the country, why are they doing that? Who needs this circus performance? They should determine whether they are to default. If yes, do so. But do not sell anything out, because this property does not cost anything now. That’s my answer. How can it possibly be otherwise? When should the state sell its assets? When they are in demand.


So perhaps this process is to sell the assets to related persons at knockdown prices?


It’s hard to say. However, it is important that I am understood correctly, because it may appear that I am against privatization. No, I am for privatization. I believe that the state is a bad manager. Practice has clearly shown it. But I am against privatization during the default of the country. I understand that there is budget deficit, I do understand that there are problems. Nevertheless, this step will not solve the problems, because the Government will sell everything at really low prices.


Will you participate in the auction selling Odessa Port Plant?


Definitely. Why not? However, I would like to study the tender terms when they are finalized.


Meaning that you have not ruled out the possibility that you may excluded from the auction?


I think so. If you remember, when the Ukrainian pipe (gas pipeline system – Glavcom) privatization terms were drawn up, it was mentioned there that Ukrainians are not allowed to take part in it. You have three attempts to guess who they meant when they tried to push the document in the parliament. The Prime Minister came to Parliament himself, stamped and shouted that the law had to be adopted in the proposed form.

Which is why I say that I need to see the conditions of sale for the Odessa Port Plant. I cannot see how they can bar me from participating.


They will write your surname, but this is a joke.


They may do it: the surname and the year of birth to be absolutely sure.


What is your evaluation of these facilities today?


It’s hard for me to say. It has had serious losses. You need to understand what the chemical industry is. If you recall, in 2010 I bought chemical facilities, the industry was nearly dead then. Now everybody has just forgotten about it: it operated at 10% of capacity. Nobody wanted it… Why did the owners sell the entities? Because when the gas price was 50 dollars it was their business, and they were satisfied. When the price rose, it started working against their business.


There is another topic being discussed in the President’s Office: the release of land sale moratorium. What is your view – should land be sold?


I think so. I am convinced in it


To whom: residents only or non-residents too?


It does not matter. Land itself will stay here. Moreover, I believe that this is spoofing. In any case, land is sold, but on certain conditions – rent, land shares. You know it as well as I do. In other words, there is no transparent market, no exchange and no clear price and mortgages.


When we spoke about privatization, you said that it should be carried out now. How about land – is it the right time to sell it?


Look, you ask me whether it is a good idea to sell land. I say yes. But, of course, during the crisis the answer is no.


Do you not rule out the possibility of selling your assets when the country recovers after the crisis?


Well, it’s business. Anything can be sold.


Which of your businesses is doing well now?


Everything is operating, except for the chemical enterprises. We have suspended operations due to one single reason: because our gas was taken, and we have been asked to buy it back. That is, buy our own gas. We saw it once during Yulia Timoshenko’s rule. And we are not afraid of it at all.


How are you going to settle this issue?


I do not know. What are they doing? We received a letter from the Minister of Agriculture at Ostchem (the holding, uniting all Firtash’s chemical plants – Glavcom) regarding the autumn. Will we provide fertilizers for agriculture? We said, “Yes, we will. Do not worry, we will solve this problem.”


How will you do it if the enterprises are not operating?


We will see. Everything is changeable. The point is that over these past years from 2010 and to 2014, the government did not even think about creating a state reserve of fertilizers because we did it on our own initiative. We used to form the stock and “keep” it for agriculture.

However, we have information that this is not just fighting against me and the plants. On the quiet it is being planned to abolish (import) duties for Russian chemicals. In Parliament there are already people with similar proposals. I am quite realistic. Put it this way, on the second day it is already becoming clear what’s happening there.

They want to let Russian chemicals into to the Ukrainian market. Why? Because they calculated that they can earn about 150-200 million dollars per season. Thanks to the fact that I (Ostchem facilities) will be out of business. If there is any significant deficit, they will abolish the duties and Russian saltpetre and chemicals will be competitive. This way they will agree with three or four Russian manufacturers, I will not name them. These companies will let them earn money via a “Plunder and Flee Inc.” company. That’s it. They don’t care whether the plants are operating or not, whether salaries are paid or not, that is not their concern. 


Do you seriously suggest that the topic of “opening the market for Russia” will be accepted in today’s Parliament?


If they are not self-destructive, then they shouldn’t do it. But they can. Perhaps they can justify this story by saying that it is necessary to save agriculture.


Then let us speak frankly. Who is lobbying for the abolishment of the duties?


I would not like to name names now. But we know who they are.


Could you give your assessment of the latest unfavorable changes on the gas market? Your regional gas companies show losses in the billions. Is it an attempt to corner you and start negotiating?


They are not getting me in a corner but they are destroying the whole system. We were cleaning up and getting these companies out of debt all time. We already had one hundred percent payments (from consumers - Glavcom) and everything was fine. Now over last year they created 2.5 billion hryvnias in losses in regional gas companies, and this year they are going to have 5.5 billion hryvnias in losses. In other words, when the government says that the rates rose and Firtash is to be blamed for that, these are complete lies, because our rates (for regional gas company services) have not been raised.


During the trial in Vienna you made a statement that last spring you, Poroshenko and Klichko agreed on the format of participating in the elections. At the same time you mentioned with pleasure that the outcome was favorable: “Poroshenko became the President and Klichko the mayor.” Poroshenko is vehemently denying these statements and says that you told lies under oath. So who is in fact telling lies? Did you speak to the President afterwards?


I will put it simply: I have not spoken to anybody, including the President, after the elections.


Then tell us more about that meeting. You version…


I will not answer this question. We have spoken about it so much that I just don’t want to.


And still, Dmitry, the President accused you of slander. In public. Have you received any formal claims from the President’s Office, or perhaps legal action has already been taken against you?


Nobody has sent anything to me yet.


Could you please give us at least some details. Otherwise, it looks as if your unspoken words can be used for blackmailing the authorities.


I do not need to offer excuses. Look, it was a court hearing, and it did not concern journalists or whoever. The court demanded publicity, and you heard it, that’s it.


During the hearing, Klichko’s court statements were not public. Tell us, did Klichko confirm the fact of the meeting?


If the hearing was not public, then how can I speak about it. What are expecting from me now?


At that meeting a certain agreement was reached and, indeed, Poroshenko, Klichko, and Yatseniuk received the power. And today both the President and the Prime Minister claim that deoligarchization is an important part of our reforms. Who will replace the Ukrainian oligarchs?


You know, generally speaking I consider it to be a big mistake. Any normal person must consolidate all the people around him or her, and not to fight on two fronts. I think we need rules. Over 20 years there were some rules of the game, and we followed them. Am I not right? Set new rules and say: from 1 January 2016 we are going to live this way. And then everything will be fair.

I am trying to say that today there is victory in the war, and sociology shows that the public is tired…


Does this the victory on the other front must be created?


If there is no other war (with oligarchs – Glavcom), then the question of who is to be blamed for what is happening will arise.


Do you keep in touch with Klichko? From Vienna can you see how the mayor manages Kiev?


Well, we have communicated, of course.


Can you evaluate the mayor’s work in the past year, since new elections are this autumn?


We will see the way people will vote.


Would you vote, do you have the right to vote?


I will vote. I live in Kiev and will vote for the mayor.


Do you consider yourself to be a disgraced oligarch, whose assets and business are under pressure?


In my opinion, oligarchs sit there in Grushevskogo Street. If I am not mistaken, oligarchization is related to the use of power, right? I do not have any power.


Do oligarchs sit in Grushevskogo Street only or in Bankova Street too?


They can definitely be in Bankova as well. Just now you are including me in a discussion with the government.


Could you name oligarchs in the Cabinet of Ministers?


The first one is likely Yatseniuk, and then on down the list. I would not like to go into detail, because then it is necessary to prove something to each other. But if we do go further, I will clearly show them: where, who and how. If they want to talk, we will do that. To say something in public is one thing but to consider the matter is completely different.


If we take the current situation – crisis, no reforms – do you not expect the reformatting of the coalition and the replacement of the Prime Minister? Your friend and companion Ivan Fursin (people’s deputy from Yeremeiev’s group “People’s Will”) says that reformatting is coming in the Verkhovna Rada.


I don’t know what is expected, but I am confident that this is something that must be done. Reformatting is required for the Cabinet of Ministers. Reloading is necessary – another coalition, which will be pro-Ukraine, and not for its separation. This is an important issue. This government has already shown that we can expect nothing from them.


Do you see an opportunity for reformatting in today’s parliament, or is new early elections necessary?


Certainly, it is better to take the easy way – without elections. But if it is not possible, then, surely, I would advise… my suggestion would be to have early elections. To take this challenge and get through this long and hard way again.


In Ukrainian mass media there has been information that you organized a meeting of Ukrainian oligarchs in Vienna. At that meeting you discussed the issue of the early elections. Did you hold that meeting and who came to you?


No, it is not true. This is a myth and nonsense. Why should anybody go anywhere if we, being the Federation, claim that this government must be changed. The question is how to do it. To organize a new government coalition is required. Your previous question was correct. Therefore, I say that if we can cope with it without spilling too much blood, and reformat the coalition using the people’s deputies who are already in the parliament, regardless of names, it will be better. If not, however, we’d rather go back to the voting booth.



Should Yatseniuk resign? He has immunity.


He will not resign. You know that he is the person who will not do it himself. I think that it will take a long time to get him out of office.


In addition a week ago the President also promised not to dismiss him. At least until the autumn.


You know, to my mind, everybody plays their game and expects the right moment. But in fact it is the country that suffers. It seems to me that now we should not speak about those with whom we work together. Today it is a must to contribute to history, eliminate enemies. To unite everybody for the sake of one thing – the future.


And to be more specific. Who, in your opinion, could become the Prime Minister and unite the country?


I would not like to comment on this question.


Is there such a person in Ukraine?


I can say only one thing. I definitely think that strangers are not our allies in that. We should build our house ourselves. I consider invitations to be an error.


In other words, is Saakashvili in Odessa an error?


Generally, this is not correct. We have 45 million-strong population, a highly educated country with bright people. It’s a miracle we managed to build the country somehow before now. We performed well. It means that we are not completely crazy. I do not know why we need to invite people from 2-million Georgia to be managers here. And one more point, I am sorry, but the situation is not yet so clear about those reforms in Georgia. However, I do not interfere with Georgian matters because I do not know them. One thing is clear for me. We should build the country ourselves.


But strangers are not limited to Saakashvili and Georgians, there is also Yaresko, who is also predicted to be the Prime Minister?


Of course. I am speaking about the situation on the whole.


Fine, are there in today’s coalition any people who could replace Yatseniuk?

Maybe there are. Firstly, we are speaking now about the people themselves. Secondly, whether the parliament will vote for the candidate and whether this person will be supported by the majority of people’s deputies. Thirdly, the political palette is strictly divided again. We are again, roughly speaking, the Party of Regions and Timoshenko’s Bloc. In fact we have found ourselves in the same position (as before the election of 2009 – Glavcom).


Do you see any attempts to create a wide coalition in the parliament, “without enemies”, as you said?


Not yet, because nobody wants to take the initiative and break the coalition.


Can you say that Yulia Timoshenko is your ally today, albeit an ad-hoc one?


Why do you consider her to be my ally? I would think of various people in that light, but her… (laughing)


She is criticizing governmental policy as much as you. Furthermore, she is a frequent guest on Inter [TV channel – Transl.].


Here everything is very simple: I do not influence Inter’s information policy at all. Generally speaking, I do not manage this channel. Then, for your understanding, it is very important for us to show and listen to everybody (on the channel).


It was announced yesterday that Inter had its license renewed for 7 years. Were there any risks that it would not be renewed?


You saw what was happening. Do you think that Inter should be replaced by Maliatko [children’s TV channel – Transl.]? And it was seriously considered… Just think about it. And what was it all about? It was not issuing a new license, it was renewing the existing license. At first there were plenty of unjustified warnings, then they were cancelled – it is obvious why it happened – since we took legal action. They realized that they would lose.


At the hearing you openly declared that you used Inter for political support of well-known presidential nominees. However, this goes against Ukrainian law.


Every matter has its legal aspect. The prosecutor’s office carried out its proceedings, but did not find anything. If there had been anything… Did we provide anybody with more advertising than paid for? We did not infringe anything.


The National Bank decided to wind down Nadra bank. How much were you ready to invest in it and how much was required by the NBU?


We fully met the NBU’s requirements. They did not adopt the program and we were informally told that the issue was with the IMF, due to evident reasons…


On 28 May Italian Intesa Sanpaolo reported on the cancellation of the sales contract for 100% shares of this bank, to the company you control. Why did this purchase fail?


What for? We withdrew ourselves. What is the purpose of this deal if we are deprived of Nadra? What for? We were planning… When Nadra operated, we had the expansion program and intended to buy Pravex too, and merge these two banks. When Nadra was taken away, the expediency of buying Pravex was also lost. Who needs it?


How do you see your future? Today you have a nice, new office and wonderful life here in Austria. At the same time the Ukrainian government does everything possible to prevent you from coming back to Ukraine.


The office is excellent and Vienna is a good city. If I wanted all this, I would have found numerous reasons to live here. But as you have noticed, I live in Ukraine. I do not have any other passport besides my Ukrainian one. My mother has been living in the country. It is possible to go there and check. My children have been studying in Kiev. Moreover, when my wife suggested taking the children here since we are here, I refused. Why? Because the personnel I work with started talking about getting a permanent residence permit somehow. At that time I felt that if I had taken my children, and would have told anyone about the need to live in a different way, it would not be sincere. Though, generally speaking, everybody understood that I have to stay here. And I said no, everybody must be in Kiev. I sent the children back home. And that’s it: they go to school. In other words, Ukraine is a vital place for me. I am not excited by beautiful offices and houses. I like to go somewhere, to relax, to socialize, like any other person, but I do feel comfortable at home. My philosophy has been to earn and dig everything in Ukraine.


When can we expect your arrival in Ukraine? Or we should wait for everything to settle down…


We are working on the criminal proceedings in Austria. For me it is vitally important. This is what I am fighting for. Let people speculate about my fear of coming home – all this is nonsense. Nobody is afraid of anybody. There is one issue: I need to win the case. I have not won it in full, we have just won the trial, but there will be an appeal.


But the judge said that you would be given your passport back and you could leave the country.


The passport was given to me and I can go. But there is one problem, lawyers believe that until we have received a written decision and studied what was written by the judge, we should not do anything.


Prosecutor General Shokin said that he would meet you with flowers.


I am pleased and grateful to him. Then I will take champagne with me and chocolate. If he meets me with flowers, I will come with champagne and chocolate.


You are probably in contact with the people surrounding the head of the Ministry of the Interior and the Prosecutor General. What do they say: “You should not come yet, Dmitry Vasilievich, in the next few years” or “Wait a little while”?


Nobody has said anything. Some ask to me come soon. But these are my associates and friends. They think I should go home. Others suppose that there is some danger…


And what are your feelings? What if you came to Borispol and…?


Frankly speaking, I do not think they expect me at home. Probably, for them… during the pre-trial period they behaved quite cautiously. And when they saw that there would not be any extradition, their eyes sparkled, and they became furious. Therefore, they do not want me to go home.



There is one more question to be asked. Supporters of Dynamo Kyiv are waiting for the answer. Will you continue supporting the team in these circumstances?


Yes, I will. I believe it is only right, why not? Dynamo has become the champion and won the Ukrainian Cup. This is a club with history, and it should be supported. Some people tried to destroy it, fought against it, I will not mention their names. When nobody was brave enough even to approach them, I said, “Yes, I will support you.”


Will you name the value of the sponsorship contract?


No. Thank you.