Privat Group
Encyclopedia
The Privat Group, or PrivatBank Group is a international business group
, based in Ukraine
and grouped around the Privatbank
. Privat Group controls dozens of companies of virtually every industry in Ukraine, Ghana
, Russia
, Romania
, United States
and other countries. Steel, oil
&gas
, chemical
, energy
and food industry
are sectors of the group's prime influence and expertise. None of the groups' capital is publicly traded on stock exchange
.
The group is controlled by the Ukrainian billionaire
businessmen Henadiy Boholyubov, Oleksiy Martynov, and Ihor Kolomoyskyi
(the latter is the richest, leading partner that is best known to the public).
Being a business oligarch
entity, Privat Group controls some prominent Ukrainian media, maintains close relations with politicians and sponsors professional sports.
Key businesses of the group (including Privatbank itself) are based in Dnipropetrovsk Oblast
, which is regarded as its “homeland”.
, and its top managers sometimes state that there is no such group at all. However, either PrivatBank or "Privat-Intertrading" company indirectly own all companies regarded as parts of the group. Typically, industrial companies are controlled through a complicated chain of offshore companies
. Despite this, the Ukrainian public has a clear understanding of what exactly belongs to the group. To describe such relations, the media use the wording “company X is controlled by the Privat Group" or "the business of the X company is being organized by the PrivatBank". The group never denies such statements.
. This oldest and most important part of the group is mostly located in and around Dnipropetrovsk
(location specified in parenthesises below).
and NPK Halychyna, controlling their business. Ukrnafta is the half-state-owned national oil company, dealing with extraction of petroleum
and gas condensate
, as well as retailing gasoline
through its large gas station network. NPK Halychyna owns and operates an oil refinery
in Drohobych
, Lviv Oblast
.
The group also recently acquired control over Illichivsk Fuel Terminal Company, operating the oil & petrol terminal in the Black Sea port of Illichivsk
.
The group may also control sugar beet
processing plants throughout Ukraine.
, Poltava
, Sumy
, Chernihiv
and Lviv Oblast
s. The names of these companies are the name of the respective oblast with the -oblenergo ending, e.g. “Poltavaoblenergo”.
, the core of the group, is one of the largest commercial bank
s of Ukraine.
in Dnipropetrovsk
. Ihor Kolomoyskyi, one of the group's co-owners, brought a court suit demanding the right to purchase a controlling stake in Channel 1+1, a popular nation-wide TV company. According to media, Privat Group also controls the UNIAN news agency and Kommersant-Ukrayina newspaper, the Ukrainian edition of the Russian Kommersant
business newspaper.
professional football
club as well as the HC Budivelnyk
hockey and BC Budivelnyk basketball teams.
and his Interpipe Group
. The groups are based in Dnipropetrovsk Oblast, sharing a long and complicated history of relations. Presently, the conflict focuses on the bilaterally owned Nikopol Ferroalloys Plant (Interpipe now controls the plant’s business). Both sides apply full-scale legal, public relations and political methods in the conflict. Ihor Kolomoyskyi (the main owner of Privat Group) and Pinchuk sometimes insult each other in their interviews.
Henadiy Korban, one of Privat Group's top managers, survived serious assassination
attempts in Dnipropetrovsk in March 2006, and again in September 2010.
Before the Orange Revolution
, Privat Group had been widely regarded as relatively uninvolved in politics, but loyal to the Leonid Kuchma
regime. After the government change, the group's owners, according to media, became close allies of Yulia Tymoshenko
(although she publicly denies this). Analysts agree that some of Tymoshenko's decisions as the Prime Minister of Ukraine
supported Privat side in conflicts.
Some sources state that Privat Group provided significant financial support for Viktor Yuschenko during his presidential campaign and subsequent revolution.
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
, based in Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
and grouped around the Privatbank
Privatbank
PrivatBank is the largest commercial bank in Ukraine, in terms of the number of clients, assets value, loan portfolio and taxes paid to the national budget. Unlike most other large Ukrainian banks, PrivatBank is not based in Kiev, the capital city, but is headquartered in Dnipropetrovsk, a smaller...
. Privat Group controls dozens of companies of virtually every industry in Ukraine, Ghana
Ghana
Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...
, Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
, United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and other countries. Steel, oil
Petroleum industry
The petroleum industry includes the global processes of exploration, extraction, refining, transporting , and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline...
&gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
, chemical
Chemical industry
The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials into more than 70,000 different products.-Products:...
, energy
Energy industry
The energy industry is the totality of all of the industries involved in the production and sale of energy, including fuel extraction, manufacturing, refining and distribution...
and food industry
Food industry
The food production is a complex, global collective of diverse businesses that together supply much of the food energy consumed by the world population...
are sectors of the group's prime influence and expertise. None of the groups' capital is publicly traded on stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
.
The group is controlled by the Ukrainian billionaire
Billionaire
A billionaire, in countries that use the short scale number naming system, is a person who has a net worth of at least one billion units of a given currency, usually the United States dollar, Euro, or Pound sterling. Forbes magazine updates a complete list of U.S. dollar billionaires around the...
businessmen Henadiy Boholyubov, Oleksiy Martynov, and Ihor Kolomoyskyi
Ihor Kolomoyskyi
Ihor Valeriyovych Kolomoyskyi , known commonly as Igor Kolomoisky is an Ukrainian business oligarch, he has Israeli and Ukrainian citizenship although dual citizenship is prohibited in Ukraine. Kolomoyskyi is the leading partner of the Privat Group and former chairman of FC Dnipro Dnipropetrovsk....
(the latter is the richest, leading partner that is best known to the public).
Being a business oligarch
Business oligarch
Business oligarch is a near-synonym of the term "business magnate", borrowed by the English speaking and western media from post-Soviet parlance to describe the huge, fast-acquired wealth of some businessmen of the former Soviet republics during the privatization in Russia and other post-Soviet...
entity, Privat Group controls some prominent Ukrainian media, maintains close relations with politicians and sponsors professional sports.
Key businesses of the group (including Privatbank itself) are based in Dnipropetrovsk Oblast
Dnipropetrovsk Oblast
Dnipropetrovsk Oblast is an oblast of central Ukraine, the most important industrial region of the country. Its administrative center is Dnipropetrovsk....
, which is regarded as its “homeland”.
Structure
The businesses of Privat Group are not formally included in a corporationCorporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
, and its top managers sometimes state that there is no such group at all. However, either PrivatBank or "Privat-Intertrading" company indirectly own all companies regarded as parts of the group. Typically, industrial companies are controlled through a complicated chain of offshore companies
Offshore company
The term offshore company is ambiguous. It may refer to either:# A company which is incorporated outside the jurisdiction of its primary operations regardless of whether that jurisdiction is an offshore financial centre i.e...
. Despite this, the Ukrainian public has a clear understanding of what exactly belongs to the group. To describe such relations, the media use the wording “company X is controlled by the Privat Group" or "the business of the X company is being organized by the PrivatBank". The group never denies such statements.
Steel industry
Various steel companies form the core of the Privat Group, presenting a full manufacturing chain of metallurgyMetallurgy
Metallurgy is a domain of materials science that studies the physical and chemical behavior of metallic elements, their intermetallic compounds, and their mixtures, which are called alloys. It is also the technology of metals: the way in which science is applied to their practical use...
. This oldest and most important part of the group is mostly located in and around Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk or Dnepropetrovsk formerly Yekaterinoslav is Ukraine's third largest city with one million inhabitants. It is located southeast of Ukraine's capital Kiev on the Dnieper River, in the south-central region of the country...
(location specified in parenthesises below).
Ore mining and processing companies
- Marhanets Mining&Processing Kombinat and Ordzhonikidze Mining&Processing Kombinat extract and enrich ferroalloyFerroalloyFerroalloy refers to various alloys of iron with a high proportion of one or more other element, manganese or silicon for example. It is used in the production of steels and alloys as a raw material.The main ferroalloys are:*FeAl – ferroaluminum...
oreOreAn ore is a type of rock that contains minerals with important elements including metals. The ores are extracted through mining; these are then refined to extract the valuable element....
s, controlling the domestic market of this raw material (cities of MarhanetsMarhanetsMarhanets is a mining city in Dnipropetrovsk Oblast of central Ukraine. It is located on the right bank of the Kakhovka Reservoir on the Dnieper River. City has about 50,000 inhabitants . Its geographic coordinates are .-2010 accident:...
and OrdzhonikidzeOrdzhonikidze, UkraineOrdzhonikidze is a city of oblast subordinance in Dnipropetrovsk Oblast of central Ukraine. It is located at around . The city is named afterSergo Ordzhonikidze....
, respectively) - “Suha Balka” JSC extracts iron ore (Kryvyi RihKryvyi RihKryvyi Rih or Krivoy Rog is a city in central Ukraine. It is situated in Dnipropetrovsk Oblast, to the southwest of the oblast's administrative center, Dnipropetrovsk, at the confluence of the Inhulets and Saksahan rivers...
) - Pivdennyi Mining&Processing Kombinat (co-owned with Vadim Novinskyi) extracts and enriches iron ore (also in Kryvyi Rih)
Ferroalloy mills
Apart from its ferroalloy-ore assets, Privat Group has stakes in all three of Ukraine's ferroalloy mills and controls two of them.- formerly Nikopol Ferroalloys Plant, the world's second ferroalloy manufacturer (co-owned and fiercely fought over with the Interpipe GroupInterpipe GroupInterpipe Group, or simply Interpipe is the influential Ukrainian business group founded and mostly owned by local business oligarch Viktor Pinchuk. The group focuses on steel industry , although indirectly controlling assets in various fields of industry, services and media...
) (Nikopol), the privatisation was declared illegal in 2006. - Stakhhanov Ferroalloys Plant (StakhanovStakhanov, UkraineStakhanov is a city in the Luhansk Oblast of eastern Ukraine. The city is designated as its own separate raion within the oblast.The current estimated population is around 90,152 .-History:...
, Luhansk OblastLuhansk OblastLuhansk Oblast ) is the easternmost oblast of Ukraine. Its administrative center is Luhansk. The oblast was established in 1938 and bore the name Voroshilovgrad Oblast in honor of Kliment Voroshilov....
of Ukraine) - Zaporizhzhia Ferroalloys Plant (Zaporizhzhia)
- Alapayevsk Metallurgy Plant (AlapayevskAlapayevskAlapayevsk is a town in Sverdlovsk Oblast, Russia, located at the confluence of the Neyva and Alapaikha Rivers. Population: 44,263 ; 50,060 ; 49,000 . The local church is named Saint Catherines....
, RussiaRussiaRussia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
) - Ferroalloys company in RomaniaRomaniaRomania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
(mentioned by the group co-owner but undisclosed as yet) - Highlanders Alloys LLC (New Haven, USA)
Oil industry
According to the media, Privat Group owns significant shares in UkrnaftaUkrnafta
Ukrnafta is a Ukrainian oil and natural gas extracting company, the largest producer of oil and gas in the country.The company produces around 3 million tonnes of oil and 4 billion m3 of natural gas per year, having oil proven reserves of nearly 180 million tonnes. Ukrnafta also ownes three natural...
and NPK Halychyna, controlling their business. Ukrnafta is the half-state-owned national oil company, dealing with extraction of petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
and gas condensate
Natural gas condensate
Natural-gas condensate is a low-density mixture of hydrocarbon liquids that are present as gaseous components in the raw natural gas produced from many natural gas fields....
, as well as retailing gasoline
Gasoline
Gasoline , or petrol , is a toxic, translucent, petroleum-derived liquid that is primarily used as a fuel in internal combustion engines. It consists mostly of organic compounds obtained by the fractional distillation of petroleum, enhanced with a variety of additives. Some gasolines also contain...
through its large gas station network. NPK Halychyna owns and operates an oil refinery
Oil refinery
An oil refinery or petroleum refinery is an industrial process plant where crude oil is processed and refined into more useful petroleum products, such as gasoline, diesel fuel, asphalt base, heating oil, kerosene, and liquefied petroleum gas...
in Drohobych
Drohobych
Drohobych is a city located at the confluence of the Tysmenytsia River and Seret, a tributary of the former, in the Lviv Oblast , in western Ukraine...
, Lviv Oblast
Lviv Oblast
Lviv Oblast is an oblast in western Ukraine. The administrative center of the oblast is the city of Lviv.-History:The oblast was created as part of the Ukrainian Soviet Socialist Republic on December 4, 1939...
.
The group also recently acquired control over Illichivsk Fuel Terminal Company, operating the oil & petrol terminal in the Black Sea port of Illichivsk
Illichivsk
Illichivsk is a port city in the Odessa Oblast of south-western Ukraine. The city is designated as its own separate raion within the oblast, and is located at around .-Geography:...
.
Food industry
Privat Group owns the Dnipropetrovsk-based “Biola” soft drinks company.The group may also control sugar beet
Sugar beet
Sugar beet, a cultivated plant of Beta vulgaris, is a plant whose tuber contains a high concentration of sucrose. It is grown commercially for sugar production. Sugar beets and other B...
processing plants throughout Ukraine.
Energy industry
In 2005, Privat Group bought controlling shares in five companies that fully control electricity distribution in Ivano-FrankivskIvano-Frankivsk Oblast
Ivano-Frankivsk Oblast is an oblast in western Ukraine. Its administrative center is the city of Ivano-Frankivsk. As is the case with most other oblasts of Ukraine this region has the same name as its administrative center – which was renamed by the Soviets after the Ukrainian writer, nationalist...
, Poltava
Poltava Oblast
Poltava Oblast is an oblast of central Ukraine. The administrative center of the oblast is the city of Poltava.Other important cities within the oblast include: Komsomolsk, Kremenchuk, Lubny and Myrhorod.-Geography:...
, Sumy
Sumy Oblast
Sumy Oblast is an oblast in the northeastern part of Ukraine. The administrative center of the oblast is the city of Sumy.Other important cities within the oblast include Konotop, Okhtyrka, Romny, and Shostka....
, Chernihiv
Chernihiv Oblast
Chernihiv Oblast is an oblast of northern Ukraine. The administrative center of the oblast is the city of Chernihiv.-Geography:The total area of the province is around 31,900 km²....
and Lviv Oblast
Lviv Oblast
Lviv Oblast is an oblast in western Ukraine. The administrative center of the oblast is the city of Lviv.-History:The oblast was created as part of the Ukrainian Soviet Socialist Republic on December 4, 1939...
s. The names of these companies are the name of the respective oblast with the -oblenergo ending, e.g. “Poltavaoblenergo”.
Banking
PrivatbankPrivatbank
PrivatBank is the largest commercial bank in Ukraine, in terms of the number of clients, assets value, loan portfolio and taxes paid to the national budget. Unlike most other large Ukrainian banks, PrivatBank is not based in Kiev, the capital city, but is headquartered in Dnipropetrovsk, a smaller...
, the core of the group, is one of the largest commercial bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s of Ukraine.
Media
Privat Group officially controls the Privat-TV regional television channelTelevision channel
A television channel is a physical or virtual channel over which a television station or television network is distributed. For example, in North America, "channel 2" refers to the broadcast or cable band of 54 to 60 MHz, with carrier frequencies of 55.25 MHz for NTSC analog video and...
in Dnipropetrovsk
Dnipropetrovsk
Dnipropetrovsk or Dnepropetrovsk formerly Yekaterinoslav is Ukraine's third largest city with one million inhabitants. It is located southeast of Ukraine's capital Kiev on the Dnieper River, in the south-central region of the country...
. Ihor Kolomoyskyi, one of the group's co-owners, brought a court suit demanding the right to purchase a controlling stake in Channel 1+1, a popular nation-wide TV company. According to media, Privat Group also controls the UNIAN news agency and Kommersant-Ukrayina newspaper, the Ukrainian edition of the Russian Kommersant
Kommersant
Kommersant is a commerce-oriented newspaper published in Russia. , the circulation was 131,000.- History :The newspaper was initially published in 1909, and it was closed down following the Bolshevik seizure of power and the introduction of censorship in 1917.In 1989, with the onset of press...
business newspaper.
Sports
Privat Group indirectly owns FC Dnipro DnipropetrovskFC Dnipro Dnipropetrovsk
Football Club Dnipro is a Ukrainian professional football club from the city of Dnipropetrovsk.-BRIT:The club's franchise traces its history all the way back when the first team that was formed in 1918 by the Petrovsky factory and was called as BRIT . The team participated in the regional competition...
professional football
Football (soccer)
Association football, more commonly known as football or soccer, is a sport played between two teams of eleven players with a spherical ball...
club as well as the HC Budivelnyk
HC Budivelnyk
HC Budivelnyk was a potential professional ice hockey team to based in Kiev, Ukraine. It planned to join the Kontinental Hockey League for the 2010-11 season. However on June 24, 2010 the team's management announced the postponement of the team's debut in the KHL...
hockey and BC Budivelnyk basketball teams.
Relations and controversies
Privat Group is involved in a permanent and fierce business conflict with Ukrainian oligarch Viktor PinchukViktor Pinchuk
Victor Pinchuk is a Jewish-Ukrainian businessman and philanthropist. Forbes ranked him # 336 on the list of the wealthiest people in the world, with a fortune of $3.3 billion...
and his Interpipe Group
Interpipe Group
Interpipe Group, or simply Interpipe is the influential Ukrainian business group founded and mostly owned by local business oligarch Viktor Pinchuk. The group focuses on steel industry , although indirectly controlling assets in various fields of industry, services and media...
. The groups are based in Dnipropetrovsk Oblast, sharing a long and complicated history of relations. Presently, the conflict focuses on the bilaterally owned Nikopol Ferroalloys Plant (Interpipe now controls the plant’s business). Both sides apply full-scale legal, public relations and political methods in the conflict. Ihor Kolomoyskyi (the main owner of Privat Group) and Pinchuk sometimes insult each other in their interviews.
Henadiy Korban, one of Privat Group's top managers, survived serious assassination
Assassination
To carry out an assassination is "to murder by a sudden and/or secret attack, often for political reasons." Alternatively, assassination may be defined as "the act of deliberately killing someone, especially a public figure, usually for hire or for political reasons."An assassination may be...
attempts in Dnipropetrovsk in March 2006, and again in September 2010.
Before the Orange Revolution
Orange Revolution
The Orange Revolution was a series of protests and political events that took place in Ukraine from late November 2004 to January 2005, in the immediate aftermath of the run-off vote of the 2004 Ukrainian presidential election which was claimed to be marred by massive corruption, voter...
, Privat Group had been widely regarded as relatively uninvolved in politics, but loyal to the Leonid Kuchma
Leonid Kuchma
Leonid Danylovych Kuchma was the second President of independent Ukraine from 19 July 1994, to 23 January 2005. Kuchma took office after winning the 1994 presidential election against his rival, incumbent Leonid Kravchuk...
regime. After the government change, the group's owners, according to media, became close allies of Yulia Tymoshenko
Yulia Tymoshenko
Yulia Volodymyrivna Tymoshenko , née Grigyan , born 27 November 1960, is a Ukrainian politician. She was the Prime Minister of Ukraine from 24 January to 8 September 2005, and again from 18 December 2007 to 4 March 2010. She placed third in Forbes Magazine's List of The World's 100 Most Powerful...
(although she publicly denies this). Analysts agree that some of Tymoshenko's decisions as the Prime Minister of Ukraine
Prime Minister of Ukraine
The Prime Minister of Ukraine is Ukraine's head of government presiding over the Cabinet of Ministers of Ukraine, which is the highest body of the executive branch of the Ukrainian government....
supported Privat side in conflicts.
Some sources state that Privat Group provided significant financial support for Viktor Yuschenko during his presidential campaign and subsequent revolution.