Document:British Interests in Ukraine

A forensic analysis of some of the British interests in Ukraine and - by inference, events leading up to and following the February 2014 coup

 file of unspecified type of unknown authorship

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Source: Golem XIV - Thoughts


Wikispooks Comment

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The author's characterisation of the political, commercial and SIS interests outlined in this article as "A very British clan" is an allusion to the 1982 Chris Mullin Novel A very British Coup' which has been adapted for television twice and syndicated to many countries. The article illustrates the comparatively restrained and carefully hidden nature of British establishment involvement in overseas shenanigans compared to the generally more bombastic Americans. Most of all it demonstrates the essentially Machiavellian commercial nature of British interference - in this case one of the prime movers is a member of both the British Ukrainian and British Syrian Societies. How's that for pure coincidence eh?

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Introduction

What are we doing in Ukraine, who is doing it, why are they doing it and for whose benefit? Simple questions but to answer them, even to begin to answer them, we have to take a step back from the official drivel of championing democracy, respecting the will of the people and protecting the integrity of established national borders. We are always told, these days, that our interventions in other countries are motivated by the purest of concerns. Sometimes mention might be made of ‘national interests’. But are the interests that we intervene to protect really ‘national’, that is pertaining to and benefiting us all as a nation? Or are they more likely to be the interests of a smaller group of people?

When we in the West look at other countries, especially those we assume are corrupt, such as Russia or Ukraine, we have no trouble seeing through the customary claims of ‘being democratic’ and ‘respecting the rule of law’, and clearly perceive that in reality it is the shady coalitions of wealthy men and their political allies who shape what goes on and for whose material benefit policies are formed, actions are taken, people are arrested and wars started. We all think we know an Oligarch when we see one. We understand that the sudden appearance of hugely wealthy men, out of the creaking bureaucracy of a dysfunctional country, is that special form of corruption that fosters the incest of power and wealth, such that the wealthy can buy the political favour that will guarantee they will become even wealthier, and those who bestow that political favour can then line their pockets with some of their lord’s money for as long as they remain in favour.

Such factions do, of course, exist in places like Russia and Ukraine. The question is, do they exist, perhaps in a slightly more nuanced form, in our countries? Can we ever catch sight of them at work? And if so, is this evidence that our countries are actually similarly dysfunctional? Are our ‘national’ policies and actions swayed by the interests of a coterie of the wealthy and the powerful in too close contact? Of course it is easy to proclaim that the answer is obvious. And sometimes it is obvious. Halliburton under the ‘W’ regime was a case in point and Cheney is, in my opinion at least, undoubtedly an American Oligarch. But generally, especially in Europe it is harder is to catch actual sight of them. Particularly because ours are less obvious, more litigious, and usually operate within the wonderfully permissive laws they have often had a hand in framing. What we are looking for are ‘unofficial groupings’ of wealthy people, in close association with those in political power, who together have access to money and either the official or the less official organs of State power. Such grouping are not illegal and to find them does not indicate any wrong doing. But I think it is always prudent to know about them because when power and wealth do associate too intimately it is always a danger.

Business Clans

One Russian analysis of Ukraine by Andrei Fursov of the Centre of Russian Studies at the Institute of Fundamental and Applied Research of Moscow University for the Humanities, described the coalitions in Ukraine as “Business clans”. I like the name. It suggests groupings which are more than purely business, there being some sort of ‘one-of-us’ -ness about them.

So do we too have Business Clans of wealth and political influence, and are their interests a hidden part of what decides what our State does?

It turns out Ukraine is not a bad place to look.

Let’s first briefly look at the Ukrainian clans. According to Fursov there are four – though confusingly he describes more than four. According to Fursov there are:

1. The Donetsk Clan. Wealthiest member is Rinat Akmetov worth $16 billion from Steel and heavy industry. Much of his empire involves European trade.
2. The Yanukovych Clan. A long time political clan whose main sponsors have been Rinat Ahkmetov (see no.1 above) and Dimtry Firtash ( See no. 4 below).
3. The Privat Clan whose ‘owner’ is Ihor Kolomoysky. Privat is Ukraine’s largest bank and Mr Kolomiosky is one of its two owners.
4. The Firtash Clan. The main man is Dmytro Firtash. He owns the Ukrainian half of RosUkrEnergo (which controls the flow of Russian gas to and through Ukraine to Europe) and Centragas as well as many, many other companies. He is very much more closely tied to Russia.

Fursov also mentions Victor Pinchuk. Pinchuk is another billionaire who, along with Firtash has come recently to support and fund Ukraine’s new president, Mr Yatsenyuk. (Although Fursov’s description of the clans and their political front men is more detailed, it does cross reference nicely with briefer, more Western based analyses from Germany’s Speigel and America’s Foreign Affairs. )

So these are the business clans to which the politicians we hear about on the news belong and the Godfather’s who run them. To give you an idea of the relationship between these oligarchs and their money on the one hand and the politicians and ‘political’ events in Ukraine on the other, let’s look at recent changes of government in Ukraine in relation to these men.

In 2007 Yulia Tymoshenko became Prime Minister of Ukraine for a second time, beating and replacing Firtash’s man, Yanukovych. As this article in Quartz relates,

When Tymoshenko came to power, she did away with Rosurkenergo’s sweetheart deal in a new natural gas arrangement with Russia. It is that transaction for which she was imprisoned—in a scripted trial, she was accused of cutting a bad deal for Ukraine. Once Yanukovych won the 2010 presidential election, Firtash was back in a powerful, behind-the-scenes role in charge of the country’s natural gas industry.

Did Firtash have an interest in what happened? Of course he did. Would elements within Russia have been interested and pleased? Most certainly. Did either have an actual hand in it? Who can say. It is certainly a striking a coincidence of interests.

More recently Yanukovych himself fell from power. Of course his fall was due to a popular uprising. and had nothing to do with the fact that he had just refused to sign an economic ‘association’ deal with the EU. Here is how that event was reported in the Telegraph:

European Union leaders have lashed out at Russia after missing a major opportunity to spread its influence deep into eastern Europe and bluntly accused Moscow of pressuring Ukraine from signing a landmark deal on closer association.

Even if the EU extended its geopolitical reach eastward by initialing association agreements with Georgia and Moldova, the belated refusal of Ukraine President Viktor Yanukovych to sign up to a similar deal largely spoiled the two-day summit with the EU’s eastern partners.

Most EU leaders accused Russia of using threats and bullying to keep Ukraine in step with Moscow.

The EU clearly saw the refusal, of the until then fairly compliant Mr Yanukovych, as a clear indication of Russian ‘meddling’. What about Mr Yanukovych’s sudden fall at the hands of a well organized uprising? Would that be European or American meddling. Or are we above that sort of thing? I personally think the meddling was primarily American. The Americans had the most to gain by Yanukovych’s departure and had the least invested – if you’ll pardon the expression – in his survival. The British had much more invested in Yanukovych and the clans which supported him, indeed had created him. Yanukovych was once a car mechanic who had been convicted of robbery and assault. But he met Mr Akhmetov and a little later Mr Firtash and those men made Yanukovych who and what he became.

The British position has therefore been a balancing act. They were well integrated with Yanukovych and his wealthy protectors and thus not keen to see him go, but when he seemed to back off from cooperation with Europe in favour of Putin’s Russia they might well have thought it better to look for a new man. And of course the American’s had already chosen one in Yatsenyuk. Among the Europeans the Germans and Austrians would have had to tread very carefully in any meddling that might upset Putin. My reasoning is the delicate position of German and Austrian banks in regards to Russian and Turkmenistan Oligarch money.

Nevertheless there has been a lot of meddling in Ukraine – from all sides. Within the Ukraine, the clan which Yanukovych’s refusal to sign tehe European accord, would have hurt most was the large, rich and powerful Donetsk/Akhmetov clan whose businesses are oriented towards Europe. Might Mr Akhmetov have helped or funded a popular uprising that his European and, I suspect, in particular his American friends, would have been delighted with? It would have been in his interests. But again we don’t know. It is another striking coincidence of interests.

It might be worth noting at this point that Mr Firtash has been arrested in Austria at the bidding of the Americans on grounds of all sorts of alleged economic ‘irregularlties’. While Mr Akhetov has remained at his ease. My oligarch is a business genius. Yours is a crook.

British interests in Ukraine – a very British clan?

It was with this picture of Ukrainian economics and politics in mind that I wondered what interests my country’s wealthy and powerful ‘clans’ might have in Ukraine. If indeed we could be said to have that sort of ‘clan’ at all. I leave it to you to decide the answer to that question. Here is what I found.

You might not know it, I didn’t, but there is a British Ukrainian Society (BUS). It’s aim, to “strengthen relations”.

Promotional graphic of the British-Ukrainian Society

It turns out that its board is just full of interesting people: Lord Risby, Lord Oxford , Robert Shelter-Jones, John Wittingdale MP, Baroness Smith of Gilmorehill and Mr Anthony Fisher.

Now before looking at any of these people in more depth it is perhaps worth noticing that Lord Risby has been a Conservative MP since 1992, till he joined the Lords in 2010, has served in the Treasury and the Ministry of Defense, and from 2005 to 2010 was Vice Chairman of the Conservative Party with special responsibility for business links to the City of London. John Wittingdale is a also very senior Conservative being vice chair of the key, 1922 committee. Robert Shelter-Jones is a Conservative Party donor via his company Sythian Ltd. As the Indepedent Newspaper reported,

The money from Mr Shetler-Jones has gone to the highest echelons of the party. Dame Pauline Neville Jones, the career diplomat who is now the shadow security minister, revealed in the latest Register of Members’ Interests that she receives £5,000 a quarter or £20,000-a-year from Mr Shetler-Jones.

Another senior Tory, the former armed services minister Nicholas Soames, also declares on the register that he receives an undisclosed sum as a strategic adviser to Scythian Limited, which has had listed assets of no more than £2 since 2006 and has given a total of more than £27,000 to Conservative Central Office.

When Lord Risby was at the ministry of Defense Nicholas Soames was the Minister.

The odd one out at the British Ukrainian Society is Baroness Smith (listed as a patron) who was married to the former leader of the Labour party. Despite her presence, having strong ties to the Conservative party does seem to be quite a common theme at the BUS. Just an inocent coincidence of course. But we do already seem to have quite a grouping of political power. Likewise it may be just a coincidence that another common theme among BUS board members is having close ties to Mr Firtash of RosUkrEnergo gas company. Robert Shetler-Jones was the former CEO of Group DF which is Mr Firtash’s main holding company. Mr Shelter-Jones is now on Group DF’s supervisory board. Lord Oxford is also on Group DF’s supervisory council. While Mr Anthony Fisher is a former director of the Firtash Foundation. And one more BUS board member, Vladimir Granovski, is also on the board of Mr Firtash’s television company.

So I think it is fair to say that the BUS is not a cultural organisation. It has no artists or poets on its board, nor any human rights activists either. It has mainly people who are interested in business (which businesses I will come to shortly), are closely associated with Mr Firtash, and many of whom are members of or donors to the Conservative party. There are two other things which link three of the BUS members which are not emphasized on the BUS web site.

Both Lord Risley and Lord Oxford are non-executive board members of Oil and Gas companies whose main interests lie in Ukraine. While both Lord Oxford and Richard Shetler-Jones have been reported as having links (in Lord Oxford’s case very senior links) with MI6.

So now we have a group of people who are linked by interests in Ukrainian gas, close ties to Ukrainian oligarch Mr Firtash as well as two other Ukrainian business clans, close and senior connections to the Conservative party, ditto for MI6 and they are members of the British Ukrainian Society. If this grouping were in Ukraine and the people were all members of the Ukrainain British Society, with business interests in the UK, ties to Ukrainian intelligence and many of them were senior members of one politcal party as well, would we have difficulty seeing them as on their way to being a business clan?

Gas companies

Lord Oxford, or as he is known to his friends, Raymond Benedict Bartholomew Michael Asquith, 3rd Earl of Oxford and Asquith, is an hereditary peer and was a senior British diplomat stationed at one time in Moscow. In fact, according to the Telegraph newspaper he was the MI6 Station Chief in Moscow. He is now a non-executive Director of JKX Oil and Gas which has large oil and gas rights in Ukraine.

According to its Wikipdia entry, {{QB JKX is the dominant private enterprise in exploration and production, accounting for over three-quarters of all oil and almost half of all gas produced by non-state-owned companies. }} So along side Mr Firtash’s RosUkrEnergo, JKX is a pretty big player in Ukraine. The Russian state bank VTB owns 6.4% of JKX while Ihor Kolomoyski (see clan no. 3 above) who is co-owner of Pivat Bank, which is Ukraine’s largest private bank, owns 27%. So JKX has ties to the Russian state, to Ukraine and one of its business clans, via Ukraine’s largest bank, and Lord Oxford is, as mentioned, also on the board of one of Mr Firtash’s ( Clan no.4, co-owner of RosUrkEnergo which handles all the state owned gas, and who was just arrested in Austria at the behest of the Americans on charges of corruption) companies.

Lord Risbey is also on the board of an oil and gas company operating in the Ukraine. He is a non-executive director of Hawkley Oil and Gas. Which is a very interesting company.

Hawkley Oil and Gas is small and relatively new. It’s birth was, in my opinion, rather odd and worth looking a little into. Back in 2010 an immunology company called Inceptive announced that:

While the Company [Inceptive] has historically focused on its science/ biotechnology business, the Company has reached an agreement to acquire a private BVI oil and gas exploration company, Hawkley.

An obvious development, I am sure you’ll agree, immunology to gas exploration. The three board members of Inceptive were replaced with new men.

The private BVI (British Virgin Island) company mentioned was Janita Global Ltd which was trading as Hawkley. And when Incitive said it was going to acquire, it was actually,

...an agreement to merge with Janita Global Limited (Janita), an oil and gas company, with assets in the Dnieper-Donets Basin in the Ukraine. The merger was treated as a reverse acquisition by Janita of the Company [Incitive] which results in Janita being the in substance acquirer.

So actually Incitive didn’t buy anything in the ordinary sense. But of course Janita now traded as Hawkley and so Hawkley emerged as a new company now based in Australia in the shell of what used to be Incitive minus everyone who ever worked for Incitive. The question is why? Why not simply create a new company rather than merge with and then gut an old one? Creating a new company costs pennies. The merger and creation of the new Hawkley, according to their own filings, created a loss for the company, for the twelve months ending 30th June 2010, of just over $6 million! The only person who is a constant in all this, from Janita and Incitive to Hawkley is a Mr Richard Reavley who is one of the founding members of Janita and then became and still is, the CEO of the new Hawkley Oil and Gas. Clear? Don’t worry these sorts of things, one gets the strong impression, are not meant to be clear.

As all these mergers and name changes were happening and a $6 million loss was being accumulated, nevertheless lots of shares were bought and sold from and between a whole nest of UK shell companies, and other private companies registered in BVI and the Bahamas. Why invest in a company earning little and with a large loss is not quite clear. However, names that pop up as investors included Ballure Trading Ltd which is a UK shell company that lists Darion Ltd as its sole director and Sultan Services Ltd as its secretary. Darion has previously appeared in filings for and resigned as director or secretary of other companies 23 times. Sultan services has also resigned from companies 23 previous times. If I have read the filings properly, and I am not an expert so I may have misunderstood, I think these companies and a host of others listed have even acted for each other as secretary or director in the past. The result is that no one, not even Companies House, the tax man nor the police know who is the actual beneficial owner of any of these companies.

Two other tax-haven companies also appear in the listings for Hawkley, which are Avenger Investment and Acetone Ltd, at one point owning nearly a quarter of Hawkley between them. These companies too don’t make it clear who owns them. But in what are called 601 filings the names of their directors do appear. On the filing for Avenger Investments we find the signatures of Claudio Buhler and Kin Chui Tang as directors.

Signatures on the Avenger Ltd Company Statutory form 603

The odd thing is that Claudio Buhler and Kin Chi Tang are also listed as the directors of Acetone Ltd and Avenger is listed as the named company on Acetone’s filing. Which suggested that perhaps Acetone and Avenger too are just shell companies for whoever Mr Buhler and Kin Chi Tang are representing.

Buhler and Tang were actually both partners in Caldwell & Partners. They are now both founder members of CKP fiduciaries along with Philip Caldwell which offers fiduciary services to high net worth individuals. Mr Buhler is, quite interestingly, also on the board of Georgia Oil and Gas Company Ltd. Another BVI company operating in the gas fields of the former Soviet Union. Kin Chui Tang is listed as a UK citizen but the listed address is in Zug in Switzerland.

So much for Hawkley’s murky origins. What about now? Well if you look at how it is doing now you find statements like this one from investment site MacroAxis

The company has return on total asset (ROA) of (68.02) % which means that it has lost $68.02 on every $100 spent on asset. This is way below average. Similarly, it shows return on equity (ROE) of (104.79) %meaning that it generated substantial loss on money invested by shareholders.

So we have a company whose origins were …odd, involved lots of shell companies and a multi million dollar loss and the company is now…making a loss. Though it is still solvent due to the money it raised from its investors. It does have assets but there is something distinctly…odd about the company. Nothing illegal – just odd.

Put together Lord Oxford’s interests and those of Lord Risley and between those interests in gas, the ties of various British Ukrainian Society members to Mr Firtash, to MI6 and to the Conservative party and is there anything we should be asking ourselves?

Oh one last thing – Lord Risley is not only a member of the British Ukrainian Society but also of the British Syrian Society. Two countries where we are involved in changes of regime and both central to struggles over gas and gas pipelines.